A "dry hole" is a drilled hole that produces no water, or too little to serve the house. Who pays for it is one of the most important and least discussed parts of a drilling agreement. The short version: your written contract decides, and many per-foot agreements charge you for the footage drilled whether or not it finds water. That is why this question belongs before you sign, not after the rig leaves.
Why don't well drillers guarantee water?
No contractor can see the aquifer before drilling. A Montana well-owner guide puts it plainly: various conditions make it impossible to guarantee that a well contractor will find an adequate supply of groundwater. Montana DNRC well-owner guide (revised 2007) [MT-DNRC source note]
Contractors estimate depth from what experience shows is typical in your area, and they cannot tell you exactly how deep they will need to go. Water Systems Council: Determining the Depth of a Well Because the outcome is uncertain, most pricing is built around the work performed (feet drilled, casing installed, time on site) rather than the result. [WSC-DEPTH source note]
Who pays for a dry hole? The contract decides
We have not found a national rule that assigns dry-hole costs to either party. Payment is set by the agreement, which is why industry guidance focuses on what the contract should say. The National Ground Water Association's contract guidelines recommend itemizing charges, including drilling per foot, casing per foot, drilling deeper and/or a second well to ensure an adequate supply, and abandonment and sealing should it prove necessary. NGWA: Guidelines for Written Contracts [NGWA-CONTRACT source note]
Read those items together and the dry-hole question answers itself: the contract should already say what deeper drilling costs, what a second attempt costs, and who pays to seal a hole that is not used.
Clauses to agree on before drilling
Use this list when you compare written offers. Record each contractor's answer.
| Clause | Question to ask | Why it matters |
|---|---|---|
| Maximum depth | "What depth will you stop at and call me?" | Caps the per-foot charges you can be billed without a new decision |
| Rate past the estimate | "Does the per-foot rate change in deeper bands?" | Deep footage can cost more than the headline rate |
| Dry or inadequate hole | "What do I owe if the hole doesn't produce enough?" | Defines your exposure in plain terms |
| Minimum yield | "What flow do you consider a usable well, and how will it be tested?" | Separates a dry hole from a low-yield well |
| Second attempt | "Is a second location priced differently, and is it offered while the rig is on site?" | Moving the rig is a cost in itself |
| Sealing an unused hole | "Who seals it, how, and at what price?" | Unused holes must be sealed properly |
| Casing already installed | "Is casing in a dry hole pulled, left, or charged?" | Materials can be a large share of the bill |
A Montana guide recommends setting a maximum depth the driller cannot exceed without your express agreement, with extra drilling agreed in writing. Montana DNRC well-owner guide (revised 2007) That one clause turns an open-ended risk into a decision point. [MT-DNRC source note]
What happens with a second attempt?
Some states treat an immediate second attempt differently from a new project. In Washington, a 2008 state fee guide said no added state fee applied to a second attempt after an unusable first hole if it was made immediately while the rig was still on site and the first hole was properly decommissioned before the driller left. Washington Ecology: FAQ about Well Drilling Fees (2008) That is one state's historical fee rule, not a national standard, but it shows why the timing of a second attempt is worth negotiating. [WA-ECY-FEES source note]
Who pays to seal a dry hole?
An unused hole can carry surface contamination down to groundwater, so states regulate how it is closed. In Montana, the well owner is responsible for abandoning a well that is discontinued or may be a health hazard, and must hire a licensed contractor to do it. Montana DNRC well-owner guide (revised 2007) Rules differ elsewhere, so ask the authority that licenses drillers in your state, and make sure the quote states whether sealing is included. [MT-DNRC source note]
Common dry-hole pricing structures
Contracts handle the risk in a few recognizable ways. Knowing them makes it easier to compare offers on more than the per-foot rate.
| Structure | How the dry-hole risk falls | What to watch for |
|---|---|---|
| Pure per-foot | You pay for every foot drilled, water or not | Insist on a written maximum depth and a stop-and-call point |
| Per-foot with a cap | You pay per foot up to an agreed depth, then decide | Confirm what the cap covers (drilling only, or casing too) |
| Reduced rate for a dry hole | A lower per-foot charge if no usable water is found | Ask what "usable" means and how it is tested |
| Second hole on agreed terms | A stated price or discount for a second location | Ask whether mobilization is charged again |
| Turnkey for a working well | The contractor prices a finished, producing well | Read the exclusions; turnkey prices often build the risk in |
None of these is standard everywhere, and none is better in every case. A slightly higher per-foot rate with clear dry-hole terms can cost less than a cheap rate with open-ended risk. Enter each structure into the well drilling cost calculator using its maximum depth to see the worst case side by side.
If it has already happened
If you already have a dry or weak hole, the decision is technical before it is financial: deepen, move, or improve storage. Read what happens if a new well has no water for the options, then compare them against the contract terms you signed. If the contract is silent or unclear, a local attorney can explain your position; this page is general information, not legal advice.
Before you sign a new agreement, put each bidder's answers side by side with the quote checklist, and vet each bidder with the driller vetting questions. When you are ready to look for contractors, start from the well driller directory.
Red flags in a dry-hole clause
- No maximum depth. Without one, every extra foot is billable without a new decision.
- "Usable water" undefined. A clause that refunds or discounts a dry hole means little if the contractor alone decides what counts as dry.
- Sealing left out. If abandonment and sealing aren't mentioned, ask; NGWA's contract guidance lists them among the items to itemize. NGWA: Guidelines for Written Contracts
- Verbal promises. "We always find water around here" is not a term. Get the dry-hole terms in the signed contract.
Common questions
Do you have to pay a well driller if they don't find water?
Usually yes, unless your contract says otherwise. Many drilling agreements charge for the work performed, measured in feet drilled, because the driller cannot control what the ground holds. Some contractors offer different terms, so ask before you sign and get the answer in writing.
What is a dry hole clause?
It is the part of a drilling contract that says what happens if the hole produces no water or not enough water: how far the driller will go, what each foot costs, whether a second location is offered on different terms, and who pays to seal the abandoned hole.
Is there a law that says who pays for a dry well?
We have not found any national rule that assigns dry-hole costs to the owner or the driller. State rules govern licensing, permits and how an unusable hole must be sealed, but payment is normally set by the contract between you and the contractor.
Who pays to plug a dry hole?
Whoever the contract says. Sealing an unused hole is typically required by state or local rules and must be done properly, so make sure the quote states whether abandonment and sealing are included, priced separately, or excluded.
Can I negotiate a cap on dry-hole costs?
You can ask. Common approaches include a written maximum depth, a stop-and-consult point at a set depth, a stated price for sealing, and terms for a second attempt. Whether a contractor agrees depends on them and your site.
What is a dry hole in well drilling?
A dry hole is a drilled hole that produces no water, or too little to supply the house. Contracts usually treat it separately from a low-yield well, so define both terms, and how they will be tested, before drilling.
Find a driller
Then see who serves your area.
The directory lists only source-checked provider records. Use it alongside the vetting questions, never instead of them.
Open the well driller directorySources & claim context
Citations mark where guidance is grounded. They are general resources dated on retrieval, not guarantees for any property, project, price, licensure, permit or yield. No expert, attorney or reviewer signoff is claimed by this site.
Montana DNRC well-owner guide (revised 2007) · MT-DNRC · accessed 2026-10-10
https://dnrc.mt.gov/_docs/water/waterwelldrillowner.pdf
Historical Montana document; do not nationalize its licensing, bond, permit, yield, pricing or legal clauses; refresh with current local authority
Water Systems Council: Determining the Depth of a Well · Water Systems Council (wellcare) · accessed 2026-10-10
Undated industry sheet; typical-range figures are not a prediction for any property
NGWA (Wellowner.org): Guidelines for Written Contracts · NGWA · accessed 2026-10-10
https://wellowner.org/basics/planning-for-a-water-well/guidelines-for-written-contracts/
Does not prescribe who pays for a dry hole
Washington Ecology: FAQ about Well Drilling Fees (2008) · Washington State Department of Ecology · accessed 2026-10-10
https://apps.ecology.wa.gov/publications/documents/981807wr.pdf
Historical Washington fee rules; fees may have changed
Claims are grounded in the dated source notes above; project-specific price, yield, licensure and permit answers require site-specific and local verification.