For Texas developers, few surprises are more costly than discovering an old, abandoned oil or gas well on newly acquired land. While many of these wells haven’t produced in decades, they can create significant legal, environmental, and financial problems if not properly identified and addressed.
Before breaking ground, it’s essential to understand the potential liabilities, and how to protect your project from them.
Why Developers Should Be Concerned
Old wells can pose serious risks to construction and future property use:
- Environmental contamination – Leaks from old wells can release hydrocarbons or brine into the soil or groundwater. Cleanup can delay projects and cost hundreds of thousands of dollars.
- Regulatory obligations – The Texas Railroad Commission (RRC) requires operators to properly plug inactive wells. But if the original operator is gone, the state may look to the current surface owner or developer to ensure compliance.
- Construction hazards – Forgotten or poorly plugged wells can lead to ground instability, methane seepage, or even collapses under structures, parking lots, and utilities.
- Title complications – Historic mineral rights, easements, and surface-use agreements may restrict development or limit how the land can be used.
These risks are especially common in areas where oil and gas activity was once widespread, even if the land has been quiet for years.
Due Diligence for Development Projects
Developers can reduce exposure through careful planning and investigation. Key steps include:
- Regulatory and record searches – Review Texas Railroad Commission records for well locations, plugging history, and production data.
- Environmental assessments – A Phase I Environmental Site Assessment should identify potential wells or contamination. If red flags appear, a Phase II investigation with soil or groundwater testing may be necessary.
- Title and easement review – Check for existing oil, gas, or mineral reservations that could limit construction.
- Engineering and surveying – Confirm the location and integrity of any known wells before site grading or infrastructure installation.
Taking these steps before purchasing or developing land helps avoid future liability and construction delays.
Managing Risk and Liability
When old wells are discovered, liability often depends on how contracts are written. Developers should work with counsel to ensure:
- Sellers disclose all known wells and provide supporting documentation.
- Purchase agreements include representations, warranties, and indemnities for environmental issues.
- Funds are held in escrow to address future plugging or cleanup needs.
- Insurance coverage includes pollution and subsurface risks — which are often excluded from standard property policies.
A well-structured agreement can mean the difference between a manageable issue and a major financial setback.
How The Jones Law Firm Supports Developers
At The Jones Law Firm, we regularly assist developers across Texas with identifying and managing oil and gas well risks. Our team combines deep knowledge of real estate law, environmental regulation, and title issues to help clients:
- Conduct due diligence and title analysis before acquisition.
- Navigate Texas Railroad Commission requirements.
- Negotiate contracts that properly allocate risk and liability.
- Resolve disputes involving contamination, access, or indemnity.
By addressing potential well issues early, developers can move forward with confidence — knowing their projects are legally and financially protected.
Contact The Jones Law Firm to discuss how we can help you evaluate and mitigate real estate risks related to old oil and gas wells.