If you are receiving royalties from and Oil and Gas lease it is considered royalty income. It is reported on Schedule E as royalty income. So it sounds like it is being reported properly.
"Royalties from copyrights, patents, and oil, gas and mineral properties are taxable as ordinary income.
You generally report royalties in Part I of Schedule E (Form 1040 or Form 1040-SR), Supplemental Income and Loss." Taxable and Nontaxable Income
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