Cost of operating old vertical well

New Mexico Mineral Rights Eddy County, NM
1

Hey folks!

Hopefully, some of you more seasoned folks might be able to give me an idea of old legacy wells in New Mexico. Specifically, on NE/4 of 5-23S-28E API 30-015-23986.

This well was drilled in the early 1980s. So super old. I know a lot of companies’ strategies is to buy these old wells to hold leases in place until they are ready to drill modern wells. So, I’m curious about the following:

  • Approx how much per month would this well cost to operate?
  • New Mexico law states that leases need to be in “producing quantities.” I noticed this well produces nat gas under 2,000 MCF per month per the EMNRD. In my mind, that’s pretty low to be economically viable.
  • Have you seen anyone successfully argue their way out of a lease and get a new modern lease in its place?
2

It costs very little to operate a flowing gas well. Sub $1k/mo.

I don’t know what the terms of your lease are, but I would assume that the two horizontal Wolfcamp wells in the NE/4 of Section 5 likely hold most depths of interest.

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