FAQ’s Operator Expense Deduction Program
What is the Operator Expense Deduction Program?
A free service CountryMark offers to operators which allows them to collect operating expenses from working interest owner’s monthly crude oil payments.
What is required to qualify for the program?
You must be an operator that currently sells crude oil to CountryMark. The working interest owner(s) must consent to participate in the program.
How can I sign up for the program?
Contact us: Operator.Expense@countrymark.com or call 812.838.8509
A contract will be issued to the operator to be executed and returned to CountryMark. The contract allows you to include all or individual lease numbers that you sell crude oil.
How do I enroll working interest owners in the program?
New Operators: Contact Operator.Expense@countrymark.com and advise of lease number and owner names. Division Orders will be issued to the working interest owners directly that contain a special clause whereby they agree to participate in the program.
What if an operator does not want all lease numbers in the program?
Do not request new Division Orders on the lease numbers you do not want to participate. Also, do not send expenses for those specific lease number.
How do I report monthly expenses to CountryMark?
Operator must declare whether expenses will be reported by lease number or owner numbers. Most operators report by lease number and if an individual owner does not want to participate, the expenses will not be deducted for the owner.
Expense reports are due no later than 12:00 PM central time on the 2nd business day of the month to collect on prior month crude oil purchases.
What happens if I miss the reporting deadline?
Expenses will not be entered for current pay cycle and will be entered next month.
Can the operator expect to collect all expenses due for a working interest owner?
CountryMark can only collect/remit expenses from the owner’s individual payments from the specific lease number reported. Example: If owner owes $50 and the income for the lease number was $10, the operator can only collect $10. The remaining balance of $40 will continue to be collected in future payments.
Will the owner receive a statement of deductions paid to the operator for their account?
Yes. Information will be included on owner’s remittance advice.
Will the operator receive a statement of expenses collected/not collected monthly by lease number?
Yes. A monthly report will be sent to the operator called “Operator Expense Report”.
If a working interest owner will not consent to the program, can the operator force participation?
No. Participation in the program is voluntary.
How can I request that an owner/lease participate in the program if they are already setup with CountryMark and receiving payments?
A new Division Order will be issued for the owner(s) to execute with special verbiage that grants CountryMark the permission to collect on behalf of the operator. Division Order must be executed by the working interest owner before the operator can collect.
Since the operator is receiving the income for an owner’s account, will the income be reported to the Internal Revenue Service 1099 misc. income statement to the operator?
No. Operator expenses paid to the operator on behalf of the owner is still income to the owner and will be reported on the owner’s 1099.
Who is responsible to update the account for any balance forwards due for an owner to CountryMark?
The operator is responsible.
What if the working interest owner and the operator are in dispute of the amount due?
CountryMark will not participate in any dispute between the owner and operator regarding collected/uncollected amounts. Owner may rescind their Division Order to participate in the program at any time since it is a voluntary service. Operator may need to contact their Attorney and prepare an oil and gas lien to withhold future payments of the owner.
Do I need to send all my invoices to CountryMark to collect for expenses?
No. cWe do not manage any type of JIB or analyzation of invoices. CountryMark requires their own form to be completed with a total dollar amount due.
How does an operator report expenses due for unit wells?
Preferred: 1- Submit the expenses by individual lease number using unit allocations.
2- Submit 100% due by the actual unit number only.
Monthly Forms to Submit:
PDF version or Excel version
Operator Expense Form (Excel Version)
Operator Expense Form (PDF Version)
4.16.2020 Last Update