Oil and Gas Partnerships

When producable oil was discovered below the surface of the Mallet, it permanently changed the overall financial success of the ranch. Oil companies pay a price to lease our land and bring their own equipment to drill for and extract the oil, and then they pay ranch owners a percentage of their profits from the oil they sell. We as surface managers have responsibility to watch their operations and make sure they are following correct procedures and to bill them for all equipment and necessary damages for production inflicted on the surface.

The first oil well on the ranch was drilled in 1933 in our West Draw pasture, part of the Slaughter Oil Field. Although unsuccessful, oil was eventually discovered on the ranch in 1938.

The oil and gas production on the Mallet Ranch is predominately from the San Andres formation below ground, which is situated on the Northwest Shelf of the larger Permian Basin Provence. Some of the production also occurs from the

Clearfork Formation and the Abo Formation that are positioned a bit deeper than the

San Andres.

The production on the Mallet Ranch is divided into 45 separate leases operated by

20 lessees. Currently, there are over 2,000 producing and injection wells on the ranch. When the initial wells were drilled on the Mallet, the oil production was considerably more than it is today. At one time there were approximately 6000 producing oil and gas wells on the ranch. Oil production from Mallet leases was approximately two million barrels in 2023.

Pictured: Christine DeVitt on the left, Robert Gaston, and Anne Snyder. 1962.

Oil production on the ranch has undergone several changes since 1938. As underground stores of oil are depleted, the pressure underground becomes low enough that oil will no longer be pushed to the surface. To combat this, oil lessees began pumping water back into the ground, with some added chemicals to help. Though this increased the pressure underground, it requires a special process to separate the produced oil from the produced water afterwards.

As time went on, the water was replaced with carbon dioxide gas, a more effective and cheaper option. Like water, CO2 will need to be separated from the oil, post production. Oxy (Occidental Petroleum Corporation) built a CO2 recovery plant on the ranch off of highway 301 for this separation process and to reuse the cleaned recovered CO2.

Below are examples of what we watch for and how we respond in each case

Roads

For the clearing of all new roads we charge a certain fee per foot of road as a payment for destruction of our asset: grass. Oil companies may choose whether to make caliche roads (layering a gravel like substrate called caliche on top) or to leave them as dirt. In some spots, roads that are left dirt turn to soft mud after a rain, which make them nearly impassible to vehicles until they dry. We often find tracks etched into the pasture next to the designated road where they drove around the mud hole, and we bill them for these as well; considering it as new road where they killed vegetation with repeated use.

Oil or Produced Water Spills

For various reasons older pipes and equipment can split and leak oil or "produced water" the byproduct of the water injection process described above. When these spills occur, they are supposed to be reported to us for assessment of damages to the pasture and cleaned up as well. We often find, in our searches, un-reported spills or uncleaned spills, for which we notify the company. For all spills we bill by the acres affected.

Right of Ways

These settlements are used for processes like burying oil or gas pipelines and come with a signed agreement and a bill. They are allotted a certain amount of space for the damages, which we inspect to make sure they uphold the agreement.

New Drilling and Workovers

For the drilling of new wells we again bill a set amount and give them an allotted space for surface damages. We also inspect workovers (where they bring in a rig to work on and repair/convert existing wells) for any additional damage to the pasture and its vegetation. Those damages also, of course, come with a bill.

Plugged and Abandoned Wells

When a well is no longer producing oil or no longer needed for injection, all the equipment is removed from the surface, the piping and cement in the ground are pulled, and the well is abandoned. There are guidelines to plug a well, laid out by the Rail Road Commission (a regulatory agency for safe conduct of oil and gas operations), which we ensure they adhere to. Once plugged, we also require they clean all caliche off the old work pad and disk the compacted soil to help vegetation regrow and the pasture slowly recover.