TeachMeFinance.com - explain Net profits interest
Net profits interest The term 'Net profits interest' as it applies to the area of energy can be defined as ' A contractual arrangement under which the beneficiary, in exchange for consideration paid, receives a stated percentage of the net profits. That type of arrangement is considered a nonoperating interest, as distinguished from a working interest, because it does not involve the rights and obligations of operating a mineral property (costs of exploration, development, and operation). The net profits interest does not bear any part of net losses'.
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