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Oil/Gas/AFE payment


The Operator and I have split the working interest 50/50. The Operator gave me an AFE before I signed the contract with him. He has now spent over what was estimated in the AFE, and is demanding 50% more. Am I obligated to pay him?

Thank you

I wish to reiterate that working on the purchaser side of the business this is not my area of expertise. We have, however, been instructed to set up leins against working interest owners for non payment of their JIB (Joint Interest Billing) which seems a far lesser obligation than yours. Also my research has suggested that failure to pay AFEs can delay or even cancel a deal. I hope this helps somewhat.  


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Jason J. Alexander


I can answer oil and gas division order questions. I am most knowledgeable about as the purchaser side of the oil and condensate production. I can offer suggestions regarding probate and basic transfers of working, override, and royalty interests. DISCLAIMER: I am not a lawyer. I have seem and know what my company for instance accepts pertaining to these matters. Being from the purchasing end (and not the operator side) I do not have much experience with calculations or valuing property or minerals. I do not deal with acquisitions, exploration, or development of leases either.


I am a Division Order Analyst with a crude oil purchaser. I have worked in the division order and customer relations departments for the past 9 with a first purchaser. My company purchases and transports oil for operators and we make revenue distributions on their behalf. I analyze division order title opinions, prior purchaser pay sheets, probate, and other conveyances related to the set up and modification of pay decks (divisions of interest) in leases (wells) of oil around the county. I have been involved in the set-up of our contract pay leases in conjunction with our marketing and regulatory departments.

HADOA: Member, 2013-2014

HADOA: March, 2014 Seminar The Land Department: Division Order Analyst Training Course, 2011 & 2007 NADOA 2010 Conference Land Focus: Fundamentals of Leases & Title Ownership, 2006 Northwestern University, BS Communications

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