I am running into this same issue.  After reviewing the rules in the IRC section, it indicates:

"The term "passive activity" shall not include any working interest in any oil or gas property which the taxpayer holds directly or through an entity which does not limit the liability of the taxpayer with respect to such interest." 

So, if the ownership of the oil & gas interest is through an entity that limits the taxpayer's liability, they do not fall under this rule and the income is considered passive. Further research clarifies that "limited liability" for the purpose of this code section includes a taxpayer with ownership in the form of a limited partnership interest (i.e. is NOT a general partner). This is my taxpayer's situation, so I need to be able to mark this flow-through K-1 Royalty income on Schedule E, page 1, as passive.  However, the system is automatically marking it non-passive.  No material or active participation boxes are checked.  Is there a way to make this income passive on Schedule E, page 1?? This is for a trust (Form 1041), not sure if that makes a difference.