# Participating Interests
**URL:** https://www.mineralrightsforum.com/t/participating-interests/26320
**Category:** General Mineral Rights Discussion
**Created:** [November 28, 2017, 6:04pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320 "2017-11-28T18:04:18Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@Dan\_Newton](https://www.mineralrightsforum.com/u/Dan_Newton)
#### Post date: [November 28, 2017, 6:04pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/1 "2017-11-28T18:04:18Z")
Could anyone give me pros and cons on participating in the drilling of a well vs taking a bonus instead?
We have a very small acreage in one property (1.85 ac) and thought this might allow us to actually see what it is like to participate in a well without investing too much capital.
We have received the Authority for Expenditure thus far.
Interest is located in 18-12-13 in Caddo County. This is a multi-unit horizontal well. Approx depth is 15,583 TVD / 23,526 MD (not sure what the TVD / MD mean) and includes a 7,396 horizontal lateral. Estimated dry hole cost is $5,503,248 and total completed is $10,356,938.
I see nothing in this original letter that defines spacing. My understanding is that I would need to know that to determine our fractional interest.
Bonus offered is: 1/8 @ $1,300 3/16 @ $1,100 1/5 @ $500
I would appreciate any opinions.
Thank you, Dan
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### Author:  [@tim\_dowd](https://www.mineralrightsforum.com/u/tim_dowd)
#### Post date: [November 28, 2017, 8:16pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/2 "2017-11-28T20:16:07Z")
The spacing is going to be 640 acres, or even a multi-unit (1280), in all likelihood.
Let me address the dangers of participating, in general, not necessarily, this section. BTW, this was what I copied off of a prior post I posted as to someone else who wanted to know the downside of participating.
Several large dangers possibly loom:
1. The well runs into mechanical problem and the costs are 2-10 times of what was estimated;
2. a pollution problem occurs and you get named in a pollution suit;
3. the operator doesn’t market your gas and you have to threaten, cajole and deal with the marketing of your gas;
4. After the initial well is drilled, the operator proposes a six well package that you have to consent to or go non-consent. The cost of the six wells is fairly great. If you go non-consent, then you may have relinquished your interest;
5. the well gets shut-in. This means that you spent your money and continue to pay joint interest billings every month, but no revenue is coming in;
6. the well runs into mechanical problems, there are cost overruns, the well gets shut-in (so no revenue is coming in) and the operator proposes six more wells in which you have to elect to be in or out.
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### Author:  [@Dan\_Newton](https://www.mineralrightsforum.com/u/Dan_Newton)
#### Post date: [November 29, 2017, 3:37am UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/3 "2017-11-29T03:37:03Z")
Thank you, Tim. Greatly appreciate your response.
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### Author:  [@Robert\_P\_Malone](https://www.mineralrightsforum.com/u/Robert_P_Malone)
#### Post date: [November 29, 2017, 6:57pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/4 "2017-11-29T18:57:14Z")
Excellent, excellent reply from Tim Dowd!! Do not participate in drilling of any well. There are too many risks, e.g., you think you are in for only $1,000 and you get a bill for $1,000,000. You want the largest royalty interest % they will give you.
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### Author:  [@Andrew2](https://www.mineralrightsforum.com/u/Andrew2)
#### Post date: [November 30, 2017, 1:40pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/5 "2017-11-30T13:40:10Z")
I never put up any of my own money to participate in a well. If you have so much money that you have a hard time finding good ways to invest it, maybe participating makes sense. But generally taking on this extra financial risk is not in the best interest of 99% of mineral owners.
A lease is a much better way to go, especially if it is well-written and contains favorable provisions. Always go for the highest royalty you can get; a one-time bonus is chicken feed compared to royalty.
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### Author:  [@Dan\_Newton](https://www.mineralrightsforum.com/u/Dan_Newton)
#### Post date: [November 30, 2017, 3:57pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/6 "2017-11-30T15:57:18Z")
Thank you Robert
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### Author:  [@Dan\_Newton](https://www.mineralrightsforum.com/u/Dan_Newton)
#### Post date: [November 30, 2017, 3:57pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/7 "2017-11-30T15:57:34Z")
Thank you Andrew
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### Author:  [@MRFAdmin\_SV](https://www.mineralrightsforum.com/u/MRFAdmin_SV)
#### Post date: [January 11, 2025, 7:22pm UTC](https://www.mineralrightsforum.com/t/participating-interests/26320/8 "2025-01-11T19:22:03Z")