JIB Expenses - Legit or Not?

Accounting and Taxes
2

Is there a Joint Operating Agreement (JOA)? If so that will give you some answers. If you don’t know then ask the Operator for it. They should comply. Typically your options are:

  1. Keep paying.
  2. Stop paying and Operator files a lien against your interest (Operator might sue you FYI).
  3. Assign your interest to Operator.
  4. Send a plugging proposal to Operator.

The JOA will usually give you options. Absent a JOA, your options are typically more limited.

Many Operators treat COPAS as income to feed other parts of their operations. It isn’t right. But it doesn’t stop them.