EOG - 3000 leases in Gaines and Dawson County, Texas

Can anyone help here? My son was recently in touch with a landman that send the below picture. He claims that this is evidence that CGS Operating is really EOG Resources. He said that EOG (dba CGS) has taken 3000 oil and gas leases in Gaines and Dawson Countys and that’s the most leases anyone has taken in west Texas in 2019. and plans to drill a whole bunch of wells. He offered me $6,250 per net mineral acre for half of my mineral rights leased to CGS in Gaines County. Does anyone know if that’s a fair price? It’s the highest we;ve seen. I feel like if it really is EOG then maytbe wait for a higher offer?

That does not mean that CSG is EOG, but that CSG assigned that particular lease or leases described in the Exhibit A to EOG. Those sorts of assignments happen all the time. Cannot comment on a fair price. Most offers I have had have been lower than the value of the royalties that were pending on upcoming wells.

The rumors circulating are that CGS is brokering on behalf of EOG, or a relationship of that nature. CGS is run by a lawyer out of Tyler. While they did permit a couple of wells, a permit doesn’t mean they’ll actually drill it. So, even if your minerals were in the permitted section, I’d still recommend waiting a little bit longer to see if EOG ends up taking it over. If your minerals are not in that particular section, then I think it is best to wait and see what happens. As for a price, I don’t think there is a strong market right now as that part of the County where CGS has been leasing is pretty undeveloped. That may be a good number today, but in hindsight it could end up looking painfully low.

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$6,250 is a crazy high price for that area right now. I’ve known some real buyers who didn’t even want to entertain the idea of buying in that area for $2,000 and that was in 2019. So $6,250 kind of blows my mind.

Does it have a permit on it? That’s the only way I can see that price making sense.

Could EOG’s track excellent track record be part of the premium? Any idea what Oxy was/is planning with its leasing in Gaines?

Two permits have been pulled under the North Winds Unit lease. Time will tell what, if anything, these produce but I have been told they expect to spud these wells in the first half of this year. I don’t know if recent price pressure will change that. I assume these are test wells for EOG for the large number of leases they have signed in Gaines and Dawson Counties.

Thanks for everyones help and info. I think we will wait and see how ths all plays out. Ive never really wanted to sell so holding them a while longer to see what happnes wont hurt i hope. Please let me know if you hear of anything else about this CGS Eog relationship. The landman who offered to buy my mineral rights has been really nice but i trust everyone here more i think since this seems to be a good group

The Landman (David Power) I dealt with from CGS has proven to be trustworthy. The two permitted locations in Gaines will hopefully spud soon and then we will probably find out more what EOG plans. Maybe, I should say.

Ok so my son told me the landman said their are now 2 more CGS permits not far from us but on the Dawson County side. hopefully this means that CGS EOG or whoever they are knows something about the area and will drill a lot of wells.

Yep. I imagine we’ll know more before long. These two permits are on the Santorini Unit lease while the ones in Gaines were under North Winds.