Are there any standards that must be met for a well to be held by production?
Got to look at lease… Depending on locations and area production and how long or if well is shut in, it might be possible to break… Not sure about Texas laws… Mine was a Oklahoma well…
ldt
Mr Pritchard is right on. Sometimes operations hold a lease and production being defined as operations. The devil is in the details. The language that you would like to see is XXX years and as long thereafter as production is obtained in paying quantities, with no cessation of more than XX days.
The general Texas rule is that the production must pay its overhead on a moving average basis. Say over the past 10 months. The there is the reasonably prudent operator rule. It can get messy and most people have a hard time getting a lease released on that basis. One barrel per day at today's prices is a gross revenue of $3000 per month. And there is a big tax break on stripper well production (less than an average of 10 BOPD).
I appreciate the replys.
I will have to dig up the original lease, it's on a well that was originally owned by my parents.
There have been no royalties paid in the last 3 years and when I looked at the production of the well for that span (starting Sept. 2011), it showed there was a total of 8 barrels of oil produced up until Nov. 2012, around 50 barrels produced in Nov. 2012 (doesn't really make sense), and no production since.
There is some new drilling in the area and I was just wondering about HBP or maybe new lease.
Thanks again for the replys.
I wish you luck… depending on shut in clause it sounds like you may have a case… but it is going to depend on the fine print. …
Idt,
If it is oil production, then there is no shut in - typically. So, what you are looking at is the cessation of production or operations clause. You would also be looking for another well. Perhaps you can work out something with the operator, such as release of everything but the wellbore.