Summary State Oil and Gas Bonding Requirements

Single Well:

Land-Based Wells–

$5,000 (under 5,000 feet depth)

$10,000 (5,001 – 10,000 feet)

$15,000 (10,001 – 15,000 feet)

$30,000 (15,001 – 20,000 feet)

$50,000 (over 20,000 feet)

Offshore/Submerged Wells –

$100,000 (up to 6,000 feet depth)

$500,000 (over 6,000 feet)

Blanket/Statewide:

Land-Based Wells –

$100,000

Offshore/Submerged Wells –

$1,000,000

Oil and Gas Board of Alabama Administrative Code 400-1-1-.01 thru 400-7-1-.23 defines the regulations process for oil and gas permits.

Surety bonds must be executed by the operator and a surety approved by the Oil and Gas Board/Supervisor. Bond amounts for land-based wells are different than for offshore wells.

Single Well:

$400,000 (1-5 wells)

$2,000,000 plus 250,000 each (6-20 wells)

$6,000,000 (21-40 wells)

$10,000,000 (41-100 wells)

$20,000,000 (101-1,000 wells)

$30,000,000 (over 1,000 wells)

20 AA 25.025 - Bonding

For 6-20 wells, an operator of 10 wells would pay a $2 million bond (the total for the first 5 wells) plus $250,000 per well between 6 and 10, for a total of $3.25 million for 10 wells.

Bonds may be in the form of a surety bond by an authorized insurer, personal bond in the form of a CD or irrevocable letter of credit, or other form the Commission deems acceptable.

Single Well:

$10,000 (10,000 feet or less)

$20,000 (over 10,000 feet)

Blanket/Statewide:

$25,000 (up to 10 wells)

$50,000 (10 – 50 wells)

$250,000 (over 50 wells)

Arizona Department of Environmental Quality, Oil and Gas Conservation Commission (the Commission) is responsible for the issuing of permits and operator compliance.

Bond must be in the form of a surety bond, a certified check, or a CD.

Single Well:

$3,000

Blanket:

$25,000 (1-25 wells)

$50,000 (26-100 wells)

$100,000 (over 100 wells)

Arkansas Oil and Gas Commission General Rules, Rule B-2.

A surety bond, irrevocable letter of credit, CDs, cash, corporate check, or cashiers check may be accepted as a bond.

Other wells, such as disposal wells, are subject to different bonding amounts than oil/gas production wells. See regulations for more details.

Single Well:

$25,000 (less than 10,000 feet)

$40,000 (over 10,000 feet)

Blanket/Statewide:

$200,000 (up to 50 wells)

$400,000 (50-500 wells)

$2,000,000 (500-10,000 wells)

$3,000,000 (over 10,000 wells)

Offshore/Submerged Wells:

$1,000,000 (blanket)

California Public Resources Code Division 3, Chapter 1, Article 4 requires a surety bond executed by the operator and an authorized surety company.

Offshore/underwater wells are subject to a $1 million blanket surety bond. In addition, submerged well owners must provide an additional amount, determined by the Oil and Gas Supervisor, based on estimated plugging costs. This additional security can be revised periodically to reflect cost changes, and may be self-insured if the operator demonstrates sufficient financial resources.

Single Well:

$10,000 (less than 3,000 feet)

$20,000 (over 3,000 feet)

Blanket/Statewide:

$60,000 (up to 100 wells)

$100,000 (over 100 wells)

State Land Board Bonds:

$25,000 each (1-3 wells)

$100,000 (4 or more wells)

Colorado OGCC Rules and Regulations, March 16, 2016 rule 706.a and 706.b. (Western Org. of Resource Councils)

Bonds required by the state land board are separate from those required of COGCC.

The COGCC is in the process of updating these bond requirements as of 1/17/2021.

Single Well:

$25,000

Connecticut Code of Regulations Sec. 22a-472-1.

The Oil and Gas Commissioner may increase the amount required at any time based on potential pollution caused by the activity and potential costs of abandonment over the established bond amount.

Royalties (see description):

12.5% of gross production of oil and gas. Reduction of up to $0.05 per barrel may be given to account for the cost of oil treatment.

The Commission may lease state lands, including tidal and submerged lands. Specific bond requirements were not found, but royalties required of well operators on lands leased from the state are found in DE Admin. Code Title 7, section 7503.

N/A

D.C. has no crude oil reserves or refineries, and petroleum products are brought into the district via truck (EIA). Oil and gas bonding requirements were not found.

Single Well:

$50,000 (under 9,000 feet)

$100,000 (over 9,000 feet)

Blanket:

$1,000,000 (covers up to 10 wells)

Annual Fee in Lieu of Bond:

$4,000 (first year)

$1,500 per year thereafter

Max $30,000 annual fee.

Oil and gas bond details can be found in Chapter 377 of the Florida Statutes and Rules 62C-26 of the Florida Administrative Code.

Cash, surety bonds, or an irrevocable letter of credit may be also accepted in lieu of a bond.

Operators may also pay an annual fee in lieu of a bond.

Single Well:

Up to $100,000

Georgia Department of Natural Resources, Environmental Protection Division requires a surety bond before any drilling of wells, plugging, or deepening of an existing well. Bond amounts may vary up to a maximum of $100,000.

N/A

Despite using significant amounts of oil for fuel and other products, including an oil refinery, Hawaii has no proven crude oil reserves or production, according to the Energy Information Administration.

Single Well:

$10,000 plus $1/foot

Blanket/Statewide:

$50,000 (up to 10 wells)

$100,000 (11 to 30 wells)

$150,000 (over 30 wells)

Inactive Wells:

$10,000 plus $8/foot

Idaho Administrative Procedures Act 20.07.02, Subchapter C, 220.01 and 220.02

Inactive wells cannot be covered by blanket bonds. Cash may be used in lieu of a corporate surety bond, with any interest from the cash going to the state general fund.

Single Well:

$1,500 (under 2,000 feet)

$3,000 (over 2,000 feet)

Blanket/Statewide:

$25,000 (up to 25 wells)

$50,000 (up to 50 wells)

$100,000 (all wells)

Test Holes:

$2,500 per well or $25,000 blanket

Bonds are further described in the Illinois Oil and Gas Act rules.

Bonds may be surety bonds, CDs, or irrevocable letters of credit.

Single Well:

$2,500

Blanket/Statewide:

$45,000

Indiana Dept. of Natural Resources

Surety or cash bonds are accepted.

Single Well:

$15,000

Blanket/Statewide:

$30,000

Iowa Admin. Code 561 – 17.5(458A)

Surety bond required.

Blanket/Statewide:

Wells under 2,000 feet –

$7,500 (1-5 wells)

$15,000 (6-25 wells)

$30,000 (over 25 wells)

Wells over 2,000 feet –

$15,000 (1-5 wells)

$30,000 (6-25 wells)

$45,000 (over 25 wells)

The Kansas Corporation Commission, Conservation Division (the Commission) regulates oil and gas production.

A single performance bond totaling $0.75 times the total aggregate depth of all wells, including inactive and disposal wells, may also be paid in lieu of those listed.

A $100 annual fee may be paid by operators under certain conditions, including longstanding record of compliance, in lieu of a bond.

Single Well:

$2 per foot of depth

$25,000 (vertical deep well)

$40,000 (horizontal deep well)

Blanket/Statewide:

$20,000 (1 to 25 wells)

$50,000 (26 to 100 wells)

$200,000 (101 to 500)

$300,000 (501 to 1000)

Individual or single well bond amounts are determined by the depth of the well. For operators of over 1000 wells, bonds are tiered starting from $320,000 up to $1.5 million for 4,500-5,000 wells. KRS 353.590

The Kentucky Oil & Gas Commission may increase the surety bond amount for any individual well based on projected costs to plug and reclaim the well site.

Single Well:

Land-Based Wells –

$2 per foot of depth (under 3,000 ft.)

$5 per foot (3,001-10,000 ft.)

$4 per foot (over 10,000 ft.)

Coastal –

$8 per foot (all depths)

Offshore –

$12 per foot (all depths)

Blanket/Statewide:

Land-Based Wells –

$50,000 (up to 10 wells)

$250,000 (11-99 wells)

$500,000 (100+ wells)

Coastal –

$250,000 (up to 10 wells)

$1,250,000 (11-99 wells)

$2,500,000 (100+ wells)

Offshore –

$500,000 (up to 10 wells)

$2,500,000 (11-99 wells)

$5,000,000 (100+ wells)

The bond amount is based on the depth of the wells, the number of wells, and whether the well is on land, coastal waters or offshore waters. Certain land-based wells are grandfathered into lower blanket bond amounts.

Bonds may be performance bonds, letters of credit, or CDs, or plugging credits received from plugging orphan or inactive wells.

N/A

Maine oil and gas bonding requirements not found. Maine does not have any proven oil and gas reserves, according to the Energy Information Administration, and does not have associated bonding requirements for oil and gas wells.

Single Well:

$100,000 maximum per well

Blanket/Statewide:

$500,000 maximum

Maryland Dept. of Environment, Land Management Administration, Minerals, Oil and Gas Division. A bond in the form of either a surety bond or irrevocable letter of credit must be included in an application for a new drilling and operating permit.

N/A

The Massachusetts Geological survey has noted that there have not been any companies seeking to drill in the state’s two shale plays.

Bonding requirements were not found. However, oil and gas wells used for conventional or enhanced hydrocarbon recovery are defined as Class 2 wells under the Massachusetts Underground Injection Control Regulations (310 CMR 27.00). Class 2 wells are currently prohibited in Massachusetts.

Single Well:

$20,000 (up to 2,000 feet)

$40,000 (2,000-4,000 feet)

$50,000 (4,000-7,500 feet)

$60,000 (over 7,500 feet)

Blanket/Statewide:

$100,000 (up to 2,000 feet)

$200,000 (2,000-4,000 feet)

$250,000 (over 4,000 feet)

The Michigan Department of Environmental Quality, Oil, Gas and Minerals Division requires a “conformance bond.” A maximum of 100 wells may be under a blanket bond. Any additional wells require a single well bond or another blanket bond.

Cash bonds, CDs, letters of credit, surety bonds, or a statement of financial responsibility are accepted.

N/A

Minnesota has “no indigenous fossil fuel resources,” according to a 2018 legislative report, and no oil and gas bonding requirements.

Single Well:

$20,000 (0 – 10,000 feet)

$30,000 (10,001 – 16,000 feet)

$60,000 (16,001+ feet)

$100,000 (Submerged Offshore)

Blanket/Statewide:

$100,000

$200,000 (Submerged Offshore)

Mississippi Oil & Gas Rule Book

Mississippi Oil and Gas Board (the Board) regulates oil and gas production in the state.

Single Well:

$1,100 (up to 500 feet deep)

$2,200 (501 – 1,000 feet)

$3,300 (1,001 – 2,000 feet)

$4,400 (2,001 – 5,000 feet)

$5,500 plus $2/foot (over 5,001 feet)

Blanket/Statewide:

$22,000 (up to 800 feet, up to 40 wells)

$25,000 (801 – 1,500 feet, up to 10 wells)

10 CSR 50-2: Department of Natural Resources, Oil and Gas Council.

Bonds may be in the form of surety bonds, certificates of deposit, and irrevocable letters of credit.

Single Well:

$1,500 (up to 2,000 feet)

$5,000 (2,001 - 3500 feet)

$10,000 (over 3500 feet)

Blanket/Statewide:

$50,000

Administrative Rules of Montana 36.22.1308 (1)(a) through 1(c).

For blanket bonds, if a well is already covered by a previous bond amount of $10,000, operators must increase the bond to $25,000

Single Well:

$10,000

Blanket/Statewide:

$100,000

Nebraska Oil and Gas Conservation Commission (the Commission) regulates oil and gas production. Chapter 3, 004 Form 3A.

Cash or CDs may be accepted under certain conditions.

Single Well:

$10,000

Blanket/Statewide:

$50,000

Nevada Admin. Code 522.230

Operators drilling on federal lands with a bond on file with the Bureau of Land Management are not required to have a bond with the state.

N/A

New Hampshire does not have oil and gas reserves, according to the Energy Information Administration, and therefore does not have associated bonding requirements for oil and gas wells.

N/A

New Jersey does not have significant current oil and gas drilling activity, with previous exploration finding insufficient reserves, according to the state Dept. of Environmental Protection Division of Water Supply and Geoscience.

Single Well:

$25,000 plus $2/foot

Inactive Wells –

$25,000 plus $2/foot

Blanket/Statewide:

$50,000 (1-10 wells)

$75,000 (11-50 wells)

$125,000 (51-100 wells)

$250,000 (over 100 wells)

Inactive Wells –

$150,000 (1-5 wells)

$300,000 (6 to 10 wells)

$500,000 (11 to 25 wells)

$1,000,000 (over 25 wells)

New Mexico Administrative Code 19.15.8.9.C. and D.

Bonds must be in the form of an irrevocable letter of credit, plugging insurance policy, or cash or surety bond.

Inactive well bonds apply to those in temporarily abandoned status for over two years and for which the operator is seeking “approved abandoned” status.

Single Well:

$2,500 (up to 2,500 feet, 1-9 wells)

$5,000 (2,500 – 6,000 feet, 1-7 wells)

Blanket/Statewide:

Up to 2,500 feet deep –

$25,000 (10-25 wells)

$40,000 (32-50 wells)

$70,000 (63-100 wells)

$100,000 (over 112 wells)

2,500 to 6,000 feet deep –

$40,000 (8-25 wells)

$60,000 (29-50 wells)

$100,000 (58-100 wells)

$150,000 (over 109 wells)

For wells up to 2,500 feet in depth, intermediate ranges (e.g. 26-31, 51-62 wells) are subject to a bond of $2,500 per well.

For wells 2,500-6,000 feet, intermediate ranges (e.g. 26-28, 51-57 wells) are subject to a $5,000 bond per well on top of the base amount. The NY Department of Environmental Conservation includes more information, including a calculator, on their website.

Bonds for wells over 6,000 feet deep are calculated individually by regulators based on projected plugging cost.

Single Well:

$5,000 plus $1/foot depth

Environmental Damage Bond:

$1,000,000 per permit

North Carolina Oil and Gas Regulations

Operators also must pay a “Disturbed Land Bond” calculated through a cost table; and an “Environmental Damage Bond” of $1 million. The “single well bond may be submitted as a combined bond with the Environmental Damage Bond. Surety bonds are accepted; other forms may be allowed but are not defined.

Blanket Bonds do not appear in the regulations.

Single Well:

$50,000

Blanket/Statewide:

$100,000

North Dakota Administrative Code 43-02- 03-15.

Wells under 2,000 feet in depth may be approved for lower bond amounts.

Blanket Bonds are subject to a 6 well limit.

Single Well:

$5,000

Blanket/Statewide:

$15,000

Ohio Division of Oil and Gas Resources Management

Bonds may be in the form of a cash bond, CD, irrevocable letter of credit, or surety bond.

Blanket:

$25,000

Oklahoma Admin. Code § 165:10-1-12

A surety bond is required. A bond totaling the estimated plugging and abandoning cost of each well is allowed, if less than $25,000.

Single Well:

$25,000 (under 10,000 feet)

$50,000 (over 10,000 feet)

Blanket/Statewide:

$150,000

Oregon Administrative Rules 632-010-0205 (1)(a)

Surety bonds are required. Blanket bonds may be adjusted depending on the wells involved. See regulations for detailed explanation.

Single Well:

Under 6,000 feet depth –

$4,000 per well (up to 50 wells)

$35,000 (51 – 150 wells)

$60,000 (151 – 250 wells)

$100,000 (over 250 wells) plus $4,000 each well over 250

Over 6,000 feet depth –

$10,000 (up to 25 wells)

$140,000 (26 – 50 wells)

$290,000 (51 – 150 wells)

$430,000 (over 150 wells) plus $10,000 each well over 150

58 Pa. C.S.A. Section 3225 lays out specific bonding requirements for oil and gas wells.

An alternative payment of $50 annual fee per well, or $1,000 annually for more than 20 wells, may also be paid for each year a bond is not filed. Operators of under 200 wells may also pay their bonds in annual deposits.

Bond maximum of $250,000 for wells under 6,000 feet, $600,000 for those over 6,000.

N/A

Rhode Island oil and gas bonding requirements not found. According to the Energy Information Administration, Rhode Island does not have significant oil reserves.

Single Well:

$20,000 (up to 10,000 feet)

$30,000 (10,000-15,000 feet)

$40,000 (15,000-20,000 feet)

$50,000 (over 20,000 feet)

Submerged Lands –

$100,000 per well

Blanket/Statewide:

$100,000 (Land-based only)

Regulation 121-8.6: Oil and Gas Exploration, Drilling, and Production

Single Well:

$50,000 (over 5,500 feet)

Blanket/Statewide:

$100,000 (over 5,500 feet)

South Dakota Legislature, Codified Laws, Title 45, Chapter 9-15

Surety bond required. An additional bond of $20,000 applies to non-producing wells or those that have been unused for over 6 months.

Single Well:

$2,000 (up to 2,500 feet)

$3,000 (2,500-5,000 feet)

$3,000 plus $1/foot (over 5,000 feet)

Blanket/Statewide:

$20,000 (up to 10 wells, 5,000 ft.)

$30,000 (up to 10 wells, 10,000 ft.)

The Tennessee Department of Environment and Conservation, Division of Water Resources, Oil and Gas Program is responsible for the issuing of permits.

If a well exceeds 10,000 feet in depth, it is ineligible to be included in a blanket bond.

Single Well:

$2/foot of depth

Bay Wells –

$60,000

Offshore Wells –

$100,000

Blanket/Statewide:

$25,000 (10 or fewer wells)

$50,000 (11-99 wells)

$250,000 (100+ wells)

Texas Administrative Code, Title 16, Part 1, Chapter 3, Rule Sec. 3.78

Performance bonds, letters of credit or cash deposits may be accepted.

Single Well:

$1,500 (under 1,000 feet)

$15,000 (1,000 - 3,000 feet)

$30,000 (3,000 - 10,000 feet)

$60,000 (over 10,000 feet)

Blanket/Statewide:

$15,000 (under 1000 feet)

$120,000 (over 1000 feet)

Utah Administrative Code R649-3-1.5 and 1.6

Bond amounts may be lowered upon request and with a show of good cause, or raised based on updated cost projections from the Oil and Gas Division.

Surety bonds, collateral bonds (including cash), or a combination may be accepted.

N/A

Six exploration wells were drilled between 1957 and 1984, but Vermont currently has no producing oil or gas wells.

Single Well:

$10,000 plus $2,000/acre

Blanket/Statewide:

$25,000 (up to 10 wells)

$50,000 (11 – 50 wells)

$100,000 (51 – 200 wells)

$200,000 (over 200 wells)

S. 1271 (2019)/Chapter 351

In addition to the bond, a fee of $2,000 per acre of disturbed land is assessed, up to five acres and calculated to the nearest tenth of an acre. Those obtaining blanket bonds must also give $50 annually per permit to the Gas and Oil Plugging and Restoration Fund.

Surety or cash bonds may be accepted.

Single Well:

$50,000 minimum

Blanket/Statewide

$250,000 minimum (2 or more wells)

Shallow well for geologic info only:

$20,000

Washington Oil & Gas Blanket Drilling and Production Permit Bond amounts are set by the Oil and Gas Supervisor. In lieu of a bond, the applicant may submit a cash deposit, assignment of a savings account, or a certificate of deposit in a Washington bank.

Single Well:

$5,000

Blanket:

$50,000

West Virginia Department of Environmental Protection, Office of Oil and Gas: Chapter 22, Art. 6 – 26

Surety bonds, collateral bonds (including cash and securities), letters of credit, establishment of an escrow account, self-bonding or a combination of these methods may be accepted.

N/A

As of 2015, Wisconsin does not have oil and gas reserves, according to the Energy Information Administration, and does not have associated bonding requirements for oil and gas wells.

Single Well:

$10 per foot of depth

Blanket/Statewide:

$100,000

Wyoming Oil and Gas Conservation Commission, Operational Rules, Drilling Rules, Chapter 3, Section 4, Subsection b (i) (A) and (i) (B) https://www.law.cornell.edu/regulations/wyoming/055-3-Wyo-Code-R-SS-3-4

Acceptable forms of security include surety bonds, cashiers check, CD, letters of credit. Blanket bonds cover all wells regardless of depth. $10/ft. amount may be adjusted every three years based on changes in plugging costs or inflation.

The supervisor may require an additional bond amount up to $10 per foot for each idle (non-producing) well, taking into account the existing level of bond in place. Split Estate bonds (i.e. different surface land/subsurface mineral ownership) are set at a minimum of $10,000 per well site. Disposal wells and pits receiving water waste are bonded separately.