Just got an offer from EOG $500 3year lease @ 20%. New to all of this and I need to know if this is a good rate before I sign.
I'm no expert on the rates but if you keep on reading here, it LOOKS pretty good. But please continue to research! There is no substitute for due diligence.
Here's one thing you should know. There are several people here who have wells in production for over a year and have never been paid by EOG. I'm one of them. If I was going to sign with EOG, I would at least ASK for 18% interest if they fail to pay within 120 days of first sale. And I would tell them why. And direct them here to read for themselves. You might be able to help us.
No way to tell if they will even drill on your land. But if you at least ask, they will be aware they are getting some negative publicity for failing to pay promptly. Now don't get me wrong, I've never heard they are anything less than a reputable company. But it's also a fact they are seriously dragging their feet paying out in some cases. There are people here paying taxes on oil/gas that EOG produced on their land who have never seen a penny in royalties yet.
Just so you know! Best of luck!
I would ask for 25% royalty, and would only agree to a two year lease at $500 per acre. What you got appears to be a typical EOG boilerplate offer. If you are both a surface owner, a mineral owner and in an active or hot area of Montague County, depending on your acreage and ownership rights, you may have more leverage. Depending on your situation, I would also suggest a Pugh clause, and a production free royalty clause, among possible other clauses. You might want to consult a lawyer to review the actual leasing contract - it may be quite well worth your money.
The dollar figure is good, but the norm in that area seems to be 2year lease with 25% Royalty. A good attorney who has dealt with EOG in Montague county - very reasonable and worth every penny is Chuck Bartusch in Muenster, Texas. If you are new to this - it's a tough thing to negotiate on your own. We've all got our own experiences and our own advice, but what is right for us might not be right for you - One good piece of advice you can always trust is "Consult a good oil/gas attorney".