We own land and minerals in Garvin County with both horizontal and vertical wells. One of the old vertical wells has been producing little to nothing for years and we suspect that the driller is only pumping when absolutely necessary, in order to hold the lease, in which they are getting paid from the new horizontal wells. My question is simply how much production needs to be shown in order to hold a lease? Thank you, forum.
If you have a really old lease without the language “in paying quantities” then any production may hold the lease. If you have newer language, then the amount should be higher. “Paying quantities” means that the expenses of the lease are less than than the income of the lease.
If you have newer horizontal wells that were drilled under the terms of the lease, then the older wells do not matter. The newer horizontal wells will probably hold the lease as they may extend the lease for decades after the old vertical wells die.
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