The Oil and Gas Industry is Bigger in Texas

Oil pumps in Texas
Oil and gas drillers may need to be bonded.

First In Reserves, Production

When you think of Texas, one image that may come to mind is oil wells. Texas is the highest-producing state for both oil and gas. In 2013, Texas had around 10.5 billion barrels of oil in reserves, and produced another 1.2 billion barrels in 2014. This is a third of all crude oil produced in the US that year.

North Dakota comes in second, but with less than half as much oil, showing 5.7 billion in reserves, and 396 million barrels produced. Other top oil and gas producing states include Alaska, California, New Mexico, Oklahoma, Colorado, Wyoming, Utah and Louisiana.

The Railroad Commission of Texas

The Railroad Commission of Texas was established in1891 to regulate the railroad industry. Today’s Commission no longer handles railroads, but has expanded to other industries. These industries include:

  • Oil & Gas
  • Alternative Fuels – Liquefied Petroleum Gas, Compressed Natural Gas, Liquefied Natural Gas
  • Gas Services
  • Pipeline Safety
  • Mining & Exploration – Surface Coal and Uranium Mining, Reclamation

The Railroad Commission of Texas has two main goals: protect the environment and preserve individual property rights.

Surety Bonds

The Commission’s Oil and Gas Division regulates oil and gas wells in Texas. The Commission requires drillers to provide a form of financial security before issuing a permit to drill, recomplete or reenter a well. The security can be a surety bond, letter of credit, or cash deposit. A surety bond continues until the conditions of the bond have been met, or is released by the Commission or its authorized delegate.

There are two options available for the Texas P-5 surety bond requirement for operating and abandoning oil or gas wells:

Individual Bond: Form P-5PB(1) is only for well operators that have no other activity other than wells. The bond covers all permitted wells and all current wells. The amount of the bond is determined by the depth of the wells.

Blanket Bond: Form P-5PB(2) is available for all operators and covers all commission-regulated operations performed by a person, including all current wells.  The amount of the bond is determined by the total number of wells:

  • 1 to 10 wells = $25,000 bond
  • 11 to 99 wells = $50,000 bond
  • 100 or more wells = $250,000 bond

Operators without wells that are required to file financial assurance must have a $25,000 bond.

Bay and offshore wells are required to have additional security. A presumed plugging cost for a bay well is $60,000 and offshore well is $100,000.

Commercial facilities for storage, reclamation, treatment, disposal or recycling will use bond form CF01.


No matter if you have one well or thousands, can get you bonded.  We are licensed to write all bonds for the Railroad Commission of Texas and can deliver your bond quickly.

Call our Surety Bond Specialists at 844-432-6637, email, or apply online at – Your Online Bond Provider.

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