What is the lifetime of a oil and gas well?
How long does a well last?
Most wells last 15 to 30 years. However, strong oil and gas prices increase the lifetime of a well while large operating costs reduce the lifetime of a well. There is an underlying belief in the oil and gas business that oil and gas prices will increase in the future. Consequently, most well operators are willing to operate “in the red” for awhile.
Who determines when a well is plugged?
The Well Owner. However, if the well is shut in for a year or more, then ODNR may issue a “produce or plug order” for the well to the Well Owner. Well plugging conditions may also be included in the original oil and gas lease language.
When is a well plugged?
When the Well Owner and well operator believe that the well will no longer be profitable in the long run.
How much does it cost to plug a well?
There are many variables that affect the cost to plug a well. Shallow and/or easy wells can cost between $10,000 and $20,000 to plug. Deep and/or difficult wells can cost more than $100,000.
Who pays for the cost of the plug job?
The Well Owner is responsible for plugging the well and the cost should be paid by
Is there any salvage value for the old well equipment?
Not very much. The new, deeper shale wells use casing and tubing that are different sizes than the older wells in Ohio. Same for the wellheads and tank batteries. Consequently, most old and weathered equipment is only worth scrap value.
What happens to the pipelines for the well (the flow line and the sales line)?
There is a pipeline that connects the wellhead to the tank battery that is called the Flow Line. ODNR requires that the Flow Line be removed. However, with the written permission of the surface owner on ODNR Form 5 “Landowner Waiver”, the Flow Line can be filled with cement and left in place. Often pipelines are left in place due to the damage that would be caused by a track-hoe excavating their removal. Also, the original oil and gas lease may have language that addresses pipeline removal.
There is another pipeline that runs from the tank battery to the gas gathering pipeline. It is called the Sales Line. ODNR does not regulate Sales Lines. However, ODNR may request that the Sales Line be flushed with fresh water if it is to be left in place after the well is plugged.
What about the lease road that goes back to the well?
The Well Owner is required to return the lease road area to its original state before the well was put in. However, the lease road is often the best way to access remote fields and the surface landowner often prefers to allow (by written waiver) the lease road to remain in place.