Law on when wells must be completed

We have three new wells Operated by Centennial that have yet to be fracked in Reeves County, TX. Also have three in Lea County Operated by Marathon that have yet to be fracked. All the wells in Reeves were drilled in 2020 before the onslaught of the pandemic. The wells in Lea were drilled in 2019, the fourth quarter.

Is there a law or rules on when these wells have to be completed? There are producing wells on both properties other than those described above. These minerals are mineral interests (MI) as well not ORI. I’ve asked our attorney and received his answer. I was wondering what a land man or someone involved in Oil and Gas Operations would have to say. Like a 2nd opinion. The Lea County wells are located in section 34 t19s, r33e Lea county and the Reeves County wells are all the three new e, f, and g, Barracuda wells in section 38.


Legally, the lease language would be the most likely deciding factor, but with the other wells producing in paying amounts there’s likely nothing that would force their hand to complete the wells.

The other issue they may have, since they’re both public companies, is the SEC starts to not let them take financial “credit” of sorts for uncompleted wells unless they’re in the planned budget to complete in a reasonable timeframe. This will cause them to write off reserves (if they currently have the reserves booked as “proved” right now, which they may not), which will start to have a trickle down effect on their financing and metrics. This may or may not be enough to inspire them to complete the wells, but is a factor that would be weighing on the company’s decision.

Keep in mind completing a well can cost $2-6 million dollars, depending on the well and completion. It can also hurt existing production if there are wells nearby or other wells being drilled nearby, which needs to be properly coordinated an considered. All of these things are being weighed against commodity prices and budgets to determine if/when to complete the well.

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