The well is a non-uprgradable feature of your campsite. In-game, it is actually located outside of your campsite, in the clearing before you reach the trees.

The cost of repairing the well is significant, as is the time required to perform the repair.

Repairing the well gives you access to a source of water very close to your camp. If you don't repair the well, the only other source of water in the game is the various ponds where you can fish.

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