Participants in oil deal
Idea person: Someone, typically a geologist, who believes a specific location has oil or natural gas in commercial quantities. Usually paid $5,000-$10,000 plus a royalty (a percent of revenue from the well's production).
Land man: Obtains mineral rights leases from landowners. Typically paid $300-$400 a day.
Operator: Oversees and subcontracts drilling a new well or re-entry to an old well, and typically brings in partners. If the well is economically productive, hires a pumper to bring the oil out of the ground. Takes care of paperwork such as completion of regulatory forms and required permits. Looks after the well while it is economically productive. Typically receives a quarter of the revenue, but doesn't start paying a quarter of the costs until the casing point. This term signifies the point of deciding whether the well's prospects justify proceeding to production by laying casing, or vertical pipe, into the drilled hole.
Partners: Brought into the venture to help finance it and to and share profits. Typically finance the venture 100 percent to the casing point. Shares are negotiated, typically in 32nds, 16ths and eigths.
Landowner: Signs lease to allow drilling and production of oil or gas on his or her land. Typically paid a one-time bonus per acre, plus a royalty of an eighth to a quarter of the gross revenue from production.
Driller: Brings the rig that drills for oil or gas. Typically is paid $12-18 per foot of vertical depth or $3,000-$7,000 per day.
Pumper: Hired to take care of the pumpjack installed to pump oil from the ground. Takes care of maintenance on pumpjack, makes sure it continues to run, summons tank truck when tank at the well site fills. Typically paid $150 a month per well, and usually tends to several.
Petroleum engineer: Often hired to complete well after partners decide it's economically viable. Installs pumpjack.
Typical daily pay $400