A: Bi-Petro, Inc. is a company that purchases crude oil from wells located in the Illinois Basin, which are operated by various companies and individuals. Bi-Petro remits payment to the interest owners for the oil it purchases.
A: No. The payments you receive from Bi-Petro are for your share of oil produced from an oil well, or wells, in which you own an interest or from which you have a right to receive payments. This is an interest in real property and payments are made in accordance with the terms of a lease or other agreement regarding production of oil from the property. These agreements may have originated years ago through your ancestors or previous owners.
A: Revenue checks are mailed on the 18th day of each month for oil purchased during the preceding month. When the 18th falls on a Saturday, checks will be mailed on the preceding Friday. When the 18th falls on a Sunday or a holiday, checks will be mailed on the next business day.
A: There are several reasons why you may not receive a check. In order for a check to be issued:
Proceeds which accrue during the time an account is suspended are accumulated and released once the pertinent issues are resolved. Please contact our Division Order department with any concerns about the status of your account
A: Please contact our office at 217/535-0181 Ext. 8006 for Tessa Hudson or Ext. 8018 for Linda White to obtain an Affidavit form for verification that a check has been lost or stolen, and for additional information regarding a replacement check. You should allow 10 business days after payment date to receive your check before contacting us for a replacement. You may also visit our Owner Relations section for additional information regarding replacement checks.
A: Yes. Refer to Owner Relations section of this website for additional information, requirements and forms to have proceeds payable to you deposited directly into your bank account.
A: A Division Order is a document issued by the crude oil purchasing company (Bi-Petro) to an interest owner that initiates the payment process for the payment of proceeds accruing from an interest in oil or gas production. The Division Order identifies the lease/property from which the oil is being produced, the operator of the lease, the name of the owner to whom payment will be made, the share of the oil being credited to the owner, the effective date that payment will begin, and any special circumstances affecting the owner's interest or payment.
The Division Order is to be completed by the owner who must provide the proper tax identification number or social security number, the mailing address to which checks should be mailed, daytime contact information and signature. By signing the Division Order, the owner certifies that he owns the interest set forth in the Division Order (or has the right to receive payment for the interest). Signed division orders must be returned to the purchasing company for processing.
A: You should expect to receive a new division order any time a lease has been switched by the operator of the lease from one purchasing company to another purchasing company. While, generally, the lease or property NAME will not change, the new company will assign their own Lease/Property/Farm Number and owner numbers. If the division order is correct, it should be executed and returned to the purchasing company in a timely manner to ensure continued payment.
A: The Internal Revenue Service requires us to have a valid Tax Identification Number or Social Security Number on file for payees. If we do not have this number, the Internal Revenue Service requires we withhold a percentage of all revenues until the information is provided. The current withholding rate is twenty-eight percent (28%).
A: Each purchasing company assigns a number to identify each lease within its records. This number may be identified as a lease number, property number or farm number and is assigned to each well or group of wells within a specified drilling unit on which payment is or will be made. Bi-Petro's lease or property number consists of either a four digit number or a seven digit number beginning with "99". You will find this number on your division order and check detail. Please be aware, whenever a lease is switched from one purchaser to another purchasing company, the new company will assign its own Lease/Property/Farm Number.
A: Each purchasing company assigns an Owner Number to identify each owner within its records. Bi-Petro's Owner Numbers consist of six digits. More than one Owner Number will be assigned if your name is listed in more than one manner, i.e. individually, as a joint tenant or as Trustee. Also, if initials are used on one interest but your full name is used on another interest, multiple numbers may be assigned. These numbers may be combined in some instances. Please feel free to contact us regarding the combination of interests under multiple numbers. Please be aware, whenever a lease is switched from one purchaser to another purchasing company, the new company will assign their own Owner Numbers.
A: All change requests must be in writing and accompanied by supporting documentation. Please refer to the Owner Relations section of this website for detailed information and forms regarding various types of account changes.
A: Many factors can be considered in determining the value of oil interests and therefore we do not provide formal valuations.
A: Before Bi-Petro can make payment, we must first be provided with verification of the ownership of the mineral and leasehold interests in the oil that is being produced. This title process may take time and your patience is appreciated. Generally, an Abstract will need to be obtained and brought up to date by an abstractor. The Abstract will then be reviewed and a determination made as to whether your title is complete and ownership verified. If your title is not approved for payment at that time, requests will be made for additional documentation that will allow your interest to be approved for payment. Once any requirements are satisfied and your title has been approved, we will issue a division order to initiate the payment process. If you have Abstracts of Title in your possession, we encourage you to contact the operator/producer of the well or Bi-Petro, as this could greatly expedite the process.
A: 1099-Misc forms are issued for owners whose gross working interest is over $600.00 and for owners whose overriding royalty and/or royalty interest is over $10.00. Bi-Petro mails 1099 forms by January 31st of each year. Note that 1099 forms are mailed to the same address to which checks are mailed. If your checks are mailed directly to a bank or other person or entity for handling, you should contact them to ensure they provide the forms to you.
A: Pursuant to the Internal Revenue Service instructions, oil and gas payments for a working interest are to be included in Box 7. The IRS has held in Rev. Rul. 58-166 that income received from a working interest would be included in determining the taxpayer's "net earnings from self-employment" under Code Sec. 1402 for purposes of the self-employment tax. If you have any questions concerning this issue, you should contact a tax professional.
A: If you are a participant in our YES program or the Bi-Petro JIBS expense program and your operating expenses have exceeded your revenue, the result will be a net zero balance. We issue a check reflecting this detail and void the check. You should retain this information for tax purposes.
A: In Illinois, the Oil and Gas Lien Act (82 ILCS 501, et. seq.) provides for liens on oil and gas wells for labor performed, materials used or services employed for, or preliminary to the drilling, completing, equipping or operating of an oil or gas well. Upon receipt of a copy of a recorded claim for lien that meets the requirements of the statutes, we will withhold payment for oil proceeds to the extent of the lien amount claimed. Proceeds will be held until we are provided a recorded release of lien from the claimant, an order or judgment from a court of proper jurisdiction directing payment of the proceeds or the filing of a bond as provided for in the statutes.
Other states provide similar statues and we will hold proceeds in the same manner upon being provided with a copy of the recorded claim for lien.
Some operating agreements provide that the operator may, at his option, collect expenses directly from the purchaser. In this event, we should be provided with a copy of the operating agreement along with a request for payment.