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Georgia Oil and Gas Well Surety Bonds

The Georgia Department of Natural Resources, Environmental Protection Division (Division) regulates drilling, explorations, and production of oil and gas wells, is responsible for the issuing of permits and operator compliance, drilling, production and well completion. The Department conducts inspections for new well permitting, plugging and restoration of well sites; compiles and provides a process in the event an operator fails to perform the duties to meet the surety bond requirement.

Obligee and Bond Conditions:

The obligee is the entity that requires the bond. The Georgia Department of Natural Resources, Environmental Protection Division requires a surety bond before any drilling of wells, pluging, or deepening of an existing well. The bond ensures compliance of regulations and state laws, and protects the state and public from injury due to improper drilling. Failure to comply or perform the regulations and state laws may result in a claim filed against the bond by the Division. In the instance of a surety bond, if the Division files a claim against the surety bond, the owner and/or operator (named as the principal on the bond form) will be responsible for repayment of the claimed amount if the claim is paid out by the surety.

The surety bond must be in place from the time of the initial permit up to completion of the well and cannot be canceled. The premium will renew on the bond yearly for the life of the well. If the well transfers to new owners, a new bond is required to fulfill the permit conditions. Failure to maintain a bond will result in a claim against the bond by the Division.

The surety bond also ensures the well is properly plugged and the surface restored to its natural space. The plugged well must pass through an inspection process and the surface restored to meet state standards. The Division will release the bond after two years of the well inspection. After the surety is in receipt of the release, the premium for the bond will no longer be required.

Surety Bond Requirements:

Up to a $100,000 surety bond is required.

Permit Requirements:

Applicants must apply with the Division for a permit and pay the $500 permit fee (for each permit).
The Division will have a 30-day window from the date of public notice for public comments.
Property owners within one half mile of the well site must be notified of the permit request within 10 days of the public notice. The public notice must also be posted along the road closest to the proposed well site and at a publicly owned location.
After the 30 day public notice has been posted, the Division will decide whether or not it will issue the permit. The final permit decision will be issued on the Division website and will also be sent by mail or email to the interested parties.
If the Division decides to issue the permit, the permit will include specific requirements that must be met for well casings, maintenance and repair of roadways from well operations, buffers and setbacks and any other requirements.

How Much Will This Bond Cost?

The premium that you pay for an Georgia Oil and Natural Gas Well Surety Bond is dependent on credit and business and personal financial statements. Our rates start at $100 for bond amounts $10,000 and under with good credit. Bond amounts over $10,000 start at 1% of the bond amount with good credit. Contact SuretyGroup.com for a free quote based on your specific situation.

Did You Know?

House Bill 205 was passed by the House and Senate in 2018 which amends Article 2 of Chapter 4 of Title 12 of the Code of Georgia annotated.