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Idaho Oil and Gas Well Surety Bonds

The Idaho Department of Lands, Oil & Gas Conservation Commission (the Commission) regulates drilling, explorations, and production of oil and gas wells. It is also responsible for the issuing of permits and operator compliance, well completion, drilling, and production. The Commission conducts inspections for new well permitting, plugging and restoration of well sites, compiles and tracks active and inactive well data and mapping, 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 Idaho Department of Lands, Oil &Gas Conservation Commission requires a surety bond before any drilling of new wells, plug back, or deepening of an existing well. The bond ensures compliance of regulations and state laws. Failure to comply or perform the regulations and state laws may result in a claim filed against the bond by the Commission. In the instance of a surety bond, if the Commission 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 does not have the option to be canceled. The premium will renew on the bond on an annual basis for the life of the well. If the well transfers to new ownership, a new bond is required to fulfill the permit conditions. Failure to maintain a bond will result in a claim by the Commission.

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 Commission will release the bond when the plugged well passes inspection and the premium for the bond will no longer be required.

Surety Bond Requirements:

A surety bond is required based on the number of wells and/or depth of the wells for surface restoration, plugging, and abandoning when complete. Operators must choose between an individual well surety bond for each well location, or a blanket surety bond covering multiple wells.

Individual Well Surety Bond:

$10,000 plus $1 for each foot of well length

Blanket Surety Bond:

$50,000 for 10 or fewer wells
$100,000 11 to 30 wells
$150,000 more than 30 wells

The Commission may impose additional bond amounts if the operator is in non-compliance, performing horizontal drilling, or any other sufficient reason that may pose additional risk.

Permit Requirements:

Complete the permit application and pay the application fees. The application fee may be paid online by credit card or echeck.
The application requires the type of permit, description of well including the location, lease, depth of well, casing and tubing types, and operator information.
Provide a well completion including the final reclamation, plugging and abandonment of the well.
Provide a certified plat or map- preferably on a scale of one inch equals one thousand feet.
Provide a management plan for erosion and sediment control.
Additional requirements include- estimated depth to the top of the important geologic markers, information on the type of tools to be used, proposed casing program, the estimated depth to the top of target formations, proposed logging program, type and amount of cement to be used, a drilling plan, and a schematic diagram of the BOP and head assemblies.

How Much will This Bond Cost?

The premium that you pay for an Idaho Oil and Gas Well Surety Bond is dependent on credit and depth and the number of wells. Our rates start at 1% of the bond amount with good credit. Contact our Surety Bond Specialists for a free quote. For bond amounts over $50,000, personal and business financial statements may be required.

Did you Know?

Mineral rights in Idaho are legally considered the dominant estate over rights associated with owning the surface.