Payout
A condition that occurs when revenues to a given interest in a well equal all land, acquisition, drilling, completing and operating costs allocated to that interest.
How it’s important to us
It is important to realize the role that payouts play in determining the division of interest in a well. A well will typically have a payout date that reflects the point in time at which the above condition is met. Often, this will result in a change to the well’s division of interest, and the parties involved will see their GWI and NRI modified. These are agreed to in advance, and when looking at a well’s DOI, you will often see BPO (before payout) and APO (after payout) interest splits.
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