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How Do I Get Alabama Multiple Well and Single Well Methane Gas Bonds?

Methane Gas Plant
Photo by Tony Bennett

Obtaining a Surety Bond is a part of the licensing process for Coalbed Methane Gas Operations.

The State Oil and Gas Board of Alabama is a regulatory agency that promotes conservation and protection of the environment.

The board enforces the state rules and regulations through oversight of oil and gas exploration, drilling, operation, and production, Class II injection wells, and underground storage of gas in reservoirs in Alabama.

The 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.

The following is required for the Coalbed Methane Gas Operations Blanket Bond Permits and Single Well Bond Permits for the purpose of commencement of “drilling, competing, converting operating, or producing any coalbed methane gas well or Class II injection well, including production facilities, injection facilities, pipelines, and other equipment associated with such wells “(400-3-2-.03):

1. Completion of the permit application and payment of the permit fee
2. Submit with the permit application a “Certified Plat” (in triplicate). The certified plat must meet the conditions and requirements for the applicable operation (offshore, onshore, CBM, etc)
3. Complete an affidavit of ownership or control (Form OGB-2)
4. Complete an organization report (Form OG-5)
5. Maintain drilling records, if cores are taken, obtain samples of the drill cuttings and cores . Submit applicable drilling records and cores (if any) to the board.
6. Obtain a surety bond in the amount as follows for:

Multiple Wells: Measured Depth (ft) - Amount of bond required
 0 - 5,000 $100,000
 5,001 – 10,000 $100,000
 10,001 – 15,000 $100,000
 15,001 – 20,000 $100,000
 Greater than 20,000 - $100,000

Single Wells: Measured Depth (ft) - Amount of bond required
 0 - 5,000 $5,000
 5,001 – 10,000 $10,000
 10,001 – 15,000 $15,000
 15,001 – 20,000 $30,000
 Greater than 20,000 - $50,000

What Does This Bond Cost?

The premium that you pay for an Alabama Coalbed Methane Gas Operations Blanket Bond or a Single Well Bond is dependent on credit and the depth of the well(s).

Did You Know?

The first traces of natural gas were discovered in the counties of Morgan and Blount Alabama during the late 1880’s.

The cities of Huntsville and Hazel Green used natural gas in 1902.

Related Links:

Alabama Drilling State Regulations
Coalbed Methane Association of Alabama

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