Unfunded Well Plugging and Abandonment Liabilities Leading to Massive State and Federal Cleanup Costs

$10-80 billion (Appalachia region); $280 billion nationally across 2.6M wells; per-well costs $38,000-$415,000; median $76,000 per well; underfunded bond reserves average $115M vs. $79-153B required liability • $1M-20M annually from joint venture billing disputes, delayed cost allocation, and inaccurate partner liability statements; potential breach of JOA (Joint Operating Agreement) terms leading to litigation; failed audits of inter-company accounts • $2M-50M annual regulatory penalties and fines per operator for inadequate financial assurance; forced bonding increases costing $5M-100M+ depending on well count; operational shutdown orders costing millions daily

Manual Excel pivot tables reconciling well-by-well P&A liability calculations; email disputes with joint venture partners over liability allocation; paper-based well records matched against cost databases; back-of-the-envelope calculations for reserve adequacy • Manual monitoring of state regulatory announcements; WhatsApp/Slack alerts between regulatory team members; handwritten notes on cost estimate changes; ad-hoc spreadsheets comparing cost estimates across different state methodologies • Manual reconciliation of well-level costs against royalty databases; spreadsheet-based calculation of operator P&A expense and reserve adequacy; incomplete tracking of abandonment costs against revenue accruals