Once a well is determined to be uneconomic for production, the oil company is required by law to plug and abandon the well and reclaim the drill site in accordance with the requirements of the ND Industrial Commission. After this has occurred and is approved by the NDIC, the operator's bond will be released on that specific well.
Does the lease get broken? That depends. If the leased lands are only included in one spacing unit and that well is plugged and abandoned and the lease is beyond the primary term, yes. The lease is terminated and the mineral owner can lease again. However, if a lease covers multiple sections of land where the mineral owner has more than one producing well, the plugging and abandonment of one well does not have an effect on the lease if there is another producing well holding the lease. There is an exception if the lease has a “pugh clause” requiring the release of non-producing lands after the primary term.
Currently, about 20% is recycled into the next frac job and the remaining 80% is hauled to a permitted disposal site where it is pumped into the already saline Dakota Formation via a class II underground injection well.
Proximity to producing wells, highways, railroads, electrical power, and workers are all important factors that have to be considered.
The operator has to post a cash or surety bond with the state prior to drilling any wells. There are various options to bonding as follows:
$20,000 for one well
$50,000 for two to ten wells
$100,000 for more than ten wells
Bakken wells drilled in calendar year 2007 had an average initial production rate of 240 barrels of oil per day during the first 30 days.