Requiring payment up front is standard practice for a well that is drilled on behalf of an investor of any type. I know that in order for an individual investor to take advantage of certain tangible/intangible tax benefits the SEC says they must be "at-risk" (Pay for drilling and related activities prior to drilling taking place). Also if you just think about it on a common sense level, if a well is drilled and is either dry or not otherwise productive, where's the incentive to pay the driller for services rendered?
As for price, it depends on depth of well, type of formation being fracked and of course how many hands are in the cookie jar. When dealing with a public company like XNRG there are lost of hands but your risk is greatly reduced because of the due diligence on the project and the disclosure requirements of the company Vs dealing with Bob's drilling in Podunk PA where you will pay less but could loose your entire investment and have little to no recourse. It's basic risk/reward philosophy.
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