EOG wants to renew a three year lease,offering a lower royalty (from 22% to 20) also less money. Has anyone heard of them doing this in the area?
One thing I would surely hold out for is severe non-payment penalties!!!!!
EOG's major focus right now is in the Eagleford area in South Texas. They are getting better returns on their $$ spent in drilling down there right now. EOG continues to get new drilling permits in Montague County but it seems to be moving at a slower rate lately. They are most likely trying to maintain their acreage but for less compensation. They are getting more oil out of the Eagleford wells drilled than in the Barnett. However, you may want to consider reviewing your existing lease and evaluate whether you should strengthen the terms and send EOG a NEW lease! Just a thought!
Mike
I was in Montague Co yesterday and found more than one company drilling around and south of Stoneburg. My brother has minerals out around the Amon Carter Lake and they are trying to lease and drill there. The FW paper said there are 7 rigs running in the County now. There are more in Wise County also.
I have an interest at Salona around the cemetery and SE of there. We are leased up and have 5 wells so far.
Having trouble getting EOG to pay up on the royalties. They keep dragging out the title approvals. I know they are very busy but there is no excuse for not paying for production for back as far as March 2011.
I know of some atempts to lease offering 22% and $500. bonus for 3 years without an option. This is not bad but I would suggest not signing until they give you the bonus check.
Read and learn..... Insist on penalties far above and beyond for not paying within 120 days of first sale for ANY reason. They drag out payment for years with that title loophole. And BTW, Pioneer is doing the same thing. Don't feel bad about doing this...after all if they do their work and hold up their part of the deal, there's no penalty to them!
Patty, the only penalty that will really get their attention is lease termination. You are right that if they do what they are supposed, what they promised to do, there would be no penalty.
I think leases should have monthly delay rentals, and one missed payment and the lease is void. Payment of royalty within a specified period after first sales should be a condition of any lease and if the payment is missed, the lease terminates by it's own terms. Any company that refuses to allow language that if thus does not happen the lease terminates, is admitting that they can't or won't keep their word, can't be trusted and are not someone you should be dealing with anyway.
The operator should not be allowed to use any of the money from sales if they are not paying because of difficulty with title. If the oil companies title is based on a lease from you and your title isn't good enough, then the operators is surely not good enough. The operator should not have the use of proceeds that obviously they don't have title to. In other industries they put people in prison for using money that they can't show is theirs.
Wells don't spring up overnight, the operators spent years putting the unit together, scheduling a rig to drill it, scheduling someone to come and complete the well, bringing in surface equipment installing gathering lines. All title work should be done before the operator ever scratches dirt. operators say they are short handed, they have been short handed for more than a decade, probably longer. If they are allowed to use that excuse much longer they will have had time to RAISE and school people to do the work they claim they are short handed in.
I have looked and I have never found a statute that says the oil company has to pay someone they leased royalty. I have found some that say if payment is not made within a certain amount of time that the operator owes you interest. That is not quite the same as saying he must pay you.
The oil industry could do what other industries do on a daily basis but nobody requires them to do so, so they don't. I get tired of having to say it but that doesn't mean I am going to stop.
I want to thank you Patty, and I want you to know that I hear you!
patty laird said:
Read and learn..... Insist on penalties far above and beyond for not paying within 120 days of first sale for ANY reason. They drag out payment for years with that title loophole. And BTW, Pioneer is doing the same thing. Don't feel bad about doing this...after all if they do their work and hold up their part of the deal, there's no penalty to them!
I would do exactly what Mr Kennedy suggests. I have a lease with EOG and it's going on 16 months since my wells were drilled. I know these are producing wells. I have yet to receive a payment from my mineral rights. EOG is absolutely horrible about communicating with minerals owners. If I had known, I would have done what Mr Kennedy said. So as it is I keep on waiting. I've even paid Montague County taxes on my earnings from one of the wells and I've still no money.
I'm in the exact same position as Mr. Byrd with both Pioneer and EOG. They have been taking the oil and gas for YEARS and I have not seen one red penny. I call the Pioneer Landman once a month and ask about it. I don't even know who to talk to at EOG. It's always the same old story, the title loophole. Seriously, if they don't know who owns the minerals then how are they legally taking and using them? They knew enough to get the lease and if they know that much, they know enough to pay the mineral owner.
Mr. Kennedy is right. I wonder how different oil and gas leases are from any other kind of lease. Payment is one of the terms of the lease and Texas law says they are supposed to pay within 120 days of first sale. When they fail to pay, shouldn't I be able to re-possess my property? And sue them for what they took and didn't pay for? If I lease an apartment, car, or a TV I would lose my use of the property if I failed to pay as agreed. Are oil and gas leases all that different?
I have a sneaking suspicion this issue is pervasive in Montague County. I wish I lived in the area and had money. One of us has no power against an oil company with deep pockets. But a group of us would be another thing. And a group is probably something a law firm would take on a contingency basis. Of course that would lose a huge chunk of our money unless we included legal fees as part of the settlement penalty. And Texas is so pro big business who knows if we could be successful. I would probably start with an ad in the local newspapers looking for people who are owed money. Montague County might be interested in this too because they are most likely losing out on tax revenue.
I also have serious questions on the legality of Mr. Byrd's being required to pay taxes on money he has not received. And of course if they know how much Mr. Byrd owes in taxes, how can the oil company claim they don't know how much to pay him?
The oil companies have their money. What will it take for us to get our share?
Seriously, any lease I was negotiating would have spectacular penalties for non-payment!
Patty,
I have been fighting the same thing since Mar 2011 when our first wells were completed. The RRC has production reports so you may see what the wells are producing.
I and my family of between 60-70 heirs, scattered all over the US, have 204 acres from and SE of the Salona Cemetery. We now have 3 producing wells and two others that are not in production yet.
I have had much contact with EOG in Houston, Fort Worth and the Ex-Bowie office and Decatur office. The Bowie and Decatur are just contractor landmen who are only interested in leasing the minerals.
The Fort Worth Office has the title attorneys who approve everything before it goes to Houston.
I have two contacts in Houston. One is at 713-571-3800 or 713-651-7000 or 877-363-3647 or 713-651-8552, E-mail royalty_interest@eogresources.com. They call this the Land Administration Office and mail is PO Box 4362, Houston 77210-4362. Another is the Title Analysis at 713-651-6948 or 713-651-6949. There are others as each Title Analyst has their own numbers.
I think you now know that this all could have been prevented by following the information provided by Mr. Cotton or Kennedy on this forum. Its too late to change that after you sign the leases.
Don't give up and keep contacting them. I do not want to take up for them but I do know they are swamped with work. They always have called me back, sometimes after several days.
We have gotten many checks but not all.
patty laird said:
I'm in the exact same position as Mr. Byrd with both Pioneer and EOG. They have been taking the oil and gas for YEARS and I have not seen one red penny. I call the Pioneer Landman once a month and ask about it. I don't even know who to talk to at EOG. It's always the same old story, the title loophole. Seriously, if they don't know who owns the minerals then how are they legally taking and using them? They knew enough to get the lease and if they know that much, they know enough to pay the mineral owner.
Mr. Kennedy is right. I wonder how different oil and gas leases are from any other kind of lease. Payment is one of the terms of the lease and Texas law says they are supposed to pay within 120 days of first sale. When they fail to pay, shouldn't I be able to re-possess my property? And sue them for what they took and didn't pay for? If I lease an apartment, car, or a TV I would lose my use of the property if I failed to pay as agreed. Are oil and gas leases all that different?
I have a sneaking suspicion this issue is pervasive in Montague County. I wish I lived in the area and had money. One of us has no power against an oil company with deep pockets. But a group of us would be another thing. And a group is probably something a law firm would take on a contingency basis. Of course that would lose a huge chunk of our money unless we included legal fees as part of the settlement penalty. And Texas is so pro big business who knows if we could be successful. I would probably start with an ad in the local newspapers looking for people who are owed money. Montague County might be interested in this too because they are most likely losing out on tax revenue.
I also have serious questions on the legality of Mr. Byrd's being required to pay taxes on money he has not received. And of course if they know how much Mr. Byrd owes in taxes, how can the oil company claim they don't know how much to pay him?
The oil companies have their money. What will it take for us to get our share?
Seriously, any lease I was negotiating would have spectacular penalties for non-payment!
patty laird said:
One thing I would surely hold out for is severe non-payment penalties!!!!!
First, you want to delete all POST PRODUCTION EXPENSES.... AS HORIZONTAL WELLS DEPLETE, THOSE EXPENSE ARE ENORMOUS. Learn from the plays before you. many of my clients are losing 40% of their mineral income to those expenses as wells deplete which occurs rapidly. ...very rapidly. Within 18 months you income will dramatically be reduced as volumes are. Since many expenses are relatively fixed, your part is going down down down...I would readily take 20% with no post-production expenses. Your interest is supposed to be a ROYALTY. You did not sign on to be a partner in the production.
These shale plays die a rapid death as soon as the drill rigs stop drilling. The Bakken is worse perhaps but W. Texas and S. Texas is wasting (flaring) much gas - MAKE SURE YOU GET PAID FOR IT AND THAT THEY METER IT -
The result now is that if you are unable to transport oil from places like the Bakken and get $90 a bbl. then the small operators selling locally are getting $50 at best. They are being screwed for lack of transportation...
Texas needs to restore proration because mineral owners are wasting their resource be wasted by burning off the gas to get to the oil.