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.
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.
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.Individual Well Owners Surety Bond:
The bond amount is adjusted every three years based on the Wyoming consumer price index or actual plugging costs.Blanket Owners Surety Bond:
The Commission may impose additional bond amounts as it deems necessary.
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. 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. For bond amounts over $50,000, personal and business financial statements may be required. Contact our Surety Bond Specialists for a free quote.
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.
Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.
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