Hello..3 years ago, my siblings and I signed a lease agreement with EOG for 15 acres of mineral rights. My Father had sold this land but kept the mineral rights, which we later inherited.
Our original lease was for 3 years, with the option to renew, which we just did. Now, if and when they drill - how does that work? I know there is something about a Division Order. Supposedly that comes before they drill? Is that the first notification that you get that they will be drilling? If so, what's next after the division order? How long does it usually take, once you get the order - do they start drilling, and once they start drilling - what's the average amount of time you wait before you start seeing any royalties? I read somewhere that it can be a year or more - after they've drilled. And how can you verify that your royalties are correct?
Unless there is a notice requirement in the lease, the first word you usually get is when you get a division order. They are issued after a well has been completed. The time depends on what is in your lease, but state law requires payment within 120 days roughly…
Hi Wade, 120 days from a division order is the normal time to wait for royalties? It has been a little over 4 months since I signed my Leese. I have not received a division order yet. (BLL A37 Gonzales). I'm just waiting...
Wade Caldwell said:
Unless there is a notice requirement in the lease, the first word you usually get is when you get a division order. They are issued after a well has been completed. The time depends on what is in your lease, but state law requires payment within 120 days roughly..
Another question - I notice that no one ever posts about what kind of payments people are getting from all this. I realize it will vary - depending on the amount of land you have, etc... But are we talking $50 per month - $500 per month - $50,000 a month? And on average - how long will a well produce? In other words, are people getting payments every month for years and years, or several months???
every well is different. some lucky ones do produce for years but most do not. The horizontal drilled multi stage fracked wells produce a lot in the first few months and then decline to 10 - 20% afterwards. So if you have a shale well remember that those first checks are a windfall and you wont keep getting that amount for very long. how long high production will last and what the ultimate long term production will be is a big controversy in the industry right now.
As for division orders if the well turns out to be a dry hole it gets plugged and abandoned (P&A) then there is no division order, since there is nothing to divide
Thank you. Any thoughts on royalty check amounts, though? We have a very small piece of land in the shale, so we aren't expecting to retire off of it. But just curious what the monthly amounts have been for some people.