A "working interest" in an oil operation is reported on Schedule C and is subject to self-employment tax (Schedule SE). Form 1099-MISC in this case should be entered in the Business Income section.
The easiest way to to find Schedule C in TurboTax is to use the Find/Search box at the top right side of the TurboTax header. Enter "schedule c", hit Enter, then click "jump to schedule c". This will take you directly to the start of this section.
Follow the interview process to set up your oil well business, then enter Form 1099-MISC and any related expenses.
Note that when filing Schedule C to report income and deductions from an oil or gas well in which you own a working interest directly or through an entity that does not limit your liability, check the “Yes” box regarding active participation. The activity of owning a working interest is not a passive activity, regardless of your participation.
See IRS Sch C Line G: Exception for oil and gas
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