Wyoming Oil and Gas Well Owners Permit Surety Bond

The Wyoming Oil and Gas Conservation Commission, Office of State Oil and Gas (the Commission) regulates drilling, re-drilling, repairing, operating, deepening, plugging and abandoning of wells, and is responsible for the issuing of permits and operator compliance, well plugging, drilling, and production. The Commission collects and tracks active and inactive well data and maintains a well mapping system, conducts inspections for new wells, plugging of wells and site remediation of well sites, and provides a security element in the event an operator fails to perform the duties to meet the state requirements.

Obligee and Bond Conditions

The obligee is the entity that requires the bond. The Wyoming Oil & Gas Conservation Commission requires a form of security before any drilling of new wells, deepening, repairing, re-drilling, or plugging and abandoning of an existing well. The bond ensures compliance of regulations and state laws. Failure to comply or perform by the state laws and regulations 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. Other forms of security are forfeited when a valid claim has been made.

The Commission allows for several options to meet the security requirement which includes a surety bond, certificate of deposit, letter of credit, or a cashier’s check.

The surety bond must be in place from the time of the initial permit up to the plugging 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 or replace a bond will result in a claim by the Commission.

The surety bond also ensures the well is properly plugged and surface remediation has been completed. The plugged well must pass through an inspection process and the surface reclaimed 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. Operators must choose between an individual owner’s surety bond for each well location or a blanket owner’s surety bond covering multiple wells.

The bond amount is adjusted every three years based on the Wyoming consumer price index or actual plugging costs.

The Commission may impose additional bond amounts as it deems necessary.

Permit Requirements:

1. Complete the permit application and pay the application fee.
2. The application requires the well name and number, proposed well details including the location, reservoir or pool, and operator information. The application also includes a well location map to complete.
3. Provide a copy(ies) of the notification- Affidavit of Mailing, to all owners that are within one half mile of the proposed well site. If there are no uncommitted tracts within one half mile of the proposed well site, complete the Affidavit of Sole Mineral Ownership.

How Much Will This Bond Cost?

The premium that you pay for a Wyoming Oil and Gas Well Surety Bond is dependent on credit and depth and the number of wells. Contact our Surety Bond Specialists for a referral to an agency that writes these bonds.

Did You Know?

The Commission must be notified at least 30 days in advance of a change in ownership of a well. The notification must include a list of all wells pending transfer with well name, API number, and the legal description and well status.

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