These seven oil wells are located in two separate fields near Vernal, Utah. These oil well leases have decades of proven production, along with the upside opportunity to add additional wells.
The leases sit on a total of approximately 760 acres that are authorized for 22 additional wells. These black wax oil wells have averaged a combined 13,000 barrels of annual production over the last ten years. Net revenue interest for the wells averages 80% and the net working interests are 100%.
All of the production is currently handled by the seller and his son, so operating costs are comparably low. However due to other business interests, they have not realized the full production capacities of the existing wells, nor have they drilled new ones. The current owner's leases are termed ''held by production,'' meaning that as long the production continues, the leases have indefinite terms.
At the one site, production depths are at approximately 10,000 feet. In the other, depths range between 7,200 and 7,500 feet. Other wells are currently being drilled near these wells and are not having to be drilled any deeper. Production volumes are solid in these neighboring wells and producers have not had to use any fracking.
Each of the seller's wells also produce small amounts of natural gas that the owner, at one time, sold to the marketplace. They ceased this practice a number of years ago as the third-party pipeline owners at the time provided inconsistent service and the price per MCF averaged $1.00. With current pricing being around the $3.00 per MCF, new owners could resume selling the gas. With current volumes, this would add an additional $2,000 per month of income. Asking price is $3.5 million and some seller financing is negotiable for a qualified buyer.