{"data":{"id":"us-ok/okla.-stat.-tit.-52-52-318.1","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 52, § 52-318.1","heading":"Agreement as to compliance with drilling and plugging","body":"regulations - Evidence of financial responsibility - Bond - Cost of\n\nplugging - Notice - Remedial operations.\n\nA. Any person who drills or operates any well for the\n\nexploration, development or production of oil or gas, or as an\n\ninjection or disposal well, within this state, shall furnish in\n\nwriting, on forms approved by the Corporation Commission, his or her\n\nagreement to drill, operate and plug wells in compliance with the\n\nrules of the Commission and the laws of this state, together with\n\nevidence of financial ability to comply with the requirements for\n\nplugging, closure of surface impoundments, removal of trash and\n\nequipment as established by the rules of the Commission and by law.\n\nTo establish evidence of financial ability, the Commission shall\n\nrequire:\n\n1. Category A surety which shall include a financial statement\n\nlisting assets and liabilities and including a general release that\n\nthe information may be verified with banks and other financial\n\ninstitutions. The statement shall prove a net worth of not less\n\nthan Fifty Thousand Dollars ($50,000.00). Category A surety will no\n\nlonger be accepted as valid form of surety for new operators to\n\nselect beginning November 1, 2025. All current operators who have\n\nvalid Category A surety and are in good standing with the Commission\n\nwill be able to retain their Category A surety for the time they are\n\na valid operator in the State of Oklahoma; or\n\n2. Category B surety which shall include an irrevocable\n\ncommercial letter of credit, cash, a cashier's check, a Certificate\n\nof Deposit, other negotiable instrument, or a blanket surety bond.\n\nExcept as provided in paragraph 1 of subsection B or subsection C of\n\nthis section, amount of such letter of credit, cash, cashier's\n\ncheck, certificate, bond, receipt or other negotiable instrument\n\nshall be based on the number of wells that the person operates as\n\nfollows:\n\na. for one to ten wells, Twenty-five Thousand Dollars\n\n($25,000.00),\n\nb. for eleven to fifty wells, Fifty Thousand Dollars\n\n($50,000.00),\n\nc. for fifty-one to one hundred wells, One Hundred\n\nThousand Dollars ($100,000.00), and\n\nd. for more than one hundred wells, One Hundred Fifty\n\nThousand Dollars ($150,000.00).\n\nThe Commission is authorized to determine a higher amount of\n\nCategory B surety based upon the past performance of the operator\n\nand its insiders and affiliates regarding compliance with the laws\n\nof this state, and any rules promulgated thereto including but not\n\nlimited to the drilling, operation and plugging of wells, closure of\n\nsurface impoundments or removal of trash and equipment, provided\n\nthat such higher amount shall not exceed One Hundred Fifty Thousand\n\nDollars ($150,000.00). Any instrument shall constitute an\n\nunconditional promise to pay and be in a form negotiable by the\n\nCommission.\n\nB. 1. The Commission upon certification by any operator\n\nsubject to Category B surety that its plugging liability statewide\n\nis less than the amount based on the number of wells operated as\n\nspecified in this section may allow said operator to provide\n\nCategory B type surety in an amount less than the amount required by\n\nthis section, but at least sufficient to cover the estimated cost of\n\nall plugging, closure, and removal operations currently the\n\nresponsibility of that operator. The liability certification\n\nreferred to in this subsection shall take the form of an affidavit\n\nfrom a licensed well plugger estimating the costs of all plugging,\n\nclosure, and removal operations of the operator requesting such\n\nrelief. This alternative amount shall be modified upward upon the\n\nassumption of additional operations by such operator, the maximum\n\namount of Category B surety to be posted not to exceed One Hundred\n\nFifty Thousand Dollars ($150,000.00).\n\n2. New operators, operators who have outstanding fines or\n\ncontempt citations and operators whose insiders or affiliates have\nof the operator requesting such\n\nrelief. This alternative amount shall be modified upward upon the\n\nassumption of additional operations by such operator, the maximum\n\namount of Category B surety to be posted not to exceed One Hundred\n\nFifty Thousand Dollars ($150,000.00).\n\n2. New operators, operators who have outstanding fines or\n\ncontempt citations and operators whose insiders or affiliates have\n\noutstanding contempt citations or fines as of June 7, 1989, shall be\n\nrequired to post Category B surety.\n\n3. Operators using Category A surety who are assessed a fine of\n\nTwo Thousand Dollars ($2,000.00) or more and who do not pay the fine\n\nwithin the specified time shall be required to post a Category B\n\nsurety within thirty (30) days of notification by the Commission.\n\nC. For good cause shown concerning pollution or improper\n\nplugging of wells by the operator posting either Category A or B\n\nsurety or by an insider or affiliate of such operator, the\n\nCommission, upon application of the Director of the Oil and Gas\n\nConservation Division, after notice and hearing, may require the\n\nfiling of additional Category B surety in an amount greater than\n\nTwenty-five Thousand Dollars ($25,000.00) but not to exceed One\n\nHundred Fifty Thousand Dollars ($150,000.00).\n\nD. If the Commission determines that a blanket surety bond is\n\nrequired, the bond shall be conditioned on the fact that the\n\noperator shall cause the wells to be plugged and abandoned surface\n\nimpoundments to be closed, and trash and equipment to be removed in\n\naccordance with the laws of this state and the rules of the\n\nCommission. Each bond shall be executed by a corporate surety\n\nauthorized to do business in this state and shall be renewed and\n\ncontinued in effect until the conditions have been met or release of\n\nthe bond is authorized by the Commission.\n\nE. The agreement provided for in subsection A of this section\n\nshall provide that if the Commission determines that the person\n\nfurnishing the agreement has neglected, failed, or refused to plug\n\nand abandon, or cause to be plugged and abandoned, or replug any\n\nwell or has neglected, failed or refused to close any surface\n\nimpoundment or removed or cause to be removed trash and equipment in\n\ncompliance with the rules of the Commission, then the person shall\n\nforfeit from his or her bond, letter of credit or negotiable\n\ninstrument or shall pay to this state, through the Commission, for\n\ndeposit in the State Treasury, a sum equal to the cost of plugging\n\nthe well, closure of any surface impoundment or removal of trash and\n\nequipment. The Commission may cause the remedial work to be done,\n\nissuing a warrant in payment of the cost thereof drawn against the\n\nmonies accruing in the State Treasury from the forfeiture or\n\npayment. Any monies accruing in the State Treasury by reason of a\n\ndetermination that there has been a noncompliance with the\n\nprovisions of the agreement or the rules of the Commission, in\n\nexcess of the cost of remedial action ordered by the Commission,\n\nshall be credited to the Oil and Gas Revolving Fund. The Commission\n\nshall also recover any costs arising from litigation to enforce this\n\nprovision. Provided, before a person is required to forfeit or pay\n\nany monies to the state pursuant to this section, the Commission\n\nshall notify the person at his or her last-known address of the\n\ndetermination of neglect, failure or refusal to plug or replug any\n\nwell, or close any surface impoundment or remove trash and equipment\n\nand said person shall have ten (10) days from the date of\n\nnotification within which to commence remedial operations. Failure\n\nto commence remedial operations shall result in forfeiture or\n\npayment as provided in this subsection.\n\nF. It shall be unlawful for any person to drill or operate any\n\noil or gas well subject to the provisions of this section, without\n\nthe evidence of financial ability required by this section. The\nten (10) days from the date of\n\nnotification within which to commence remedial operations. Failure\n\nto commence remedial operations shall result in forfeiture or\n\npayment as provided in this subsection.\n\nF. It shall be unlawful for any person to drill or operate any\n\noil or gas well subject to the provisions of this section, without\n\nthe evidence of financial ability required by this section. The\n\nCommission shall shut in, without notice, hearing or order of the\n\nCommission, the wells of any such person violating the provisions of\n\nthis subsection and such wells shall remain shut in for\n\nnoncompliance until the required evidence of Category B surety is\n\nobtained and verified by the Commission.\n\nG. If title to property or a well is transferred, the\n\ntransferee shall furnish the evidence of financial ability to plug\n\nthe well and close surface impoundments required by the provisions\n\nof this section, prior to the transfer.\n\nH. As used in this section:\n\n1. \"Affiliate\" means an entity that owns twenty percent (20%)\n\nor more of the operator, or an entity of which twenty percent (20%)\n\nor more is owned by the operator; and\n\n2. \"Insider\" means officer, director, or person in control of\n\nthe operator; general partners of or in the operator; general or\n\nlimited partnership in which the operator is a general partner;\n\nspouse of an officer, director, or person in control of the\n\noperator; spouse of a general partner of or in the operator;\n\ncorporation of which the operator is a director, officer, or person\n\nin control; affiliate, or insider of an affiliate as if such\n\naffiliate were the operator; or managing agent of the operator.","path":["OK Code","Title 52"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os52.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"fc9a3995fc1ee8db5b04fe41593446f6b1da1177a7f664f29230d3a9c68b690f","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-52-52-318","next":"us-ok/okla.-stat.-tit.-52-52-318.10"},"notice":"GroundRules: Original legal text. Not legal advice."}