OAR 632-010-0205: Drilling Surety Bond

(1)(a) Every person who engages in the drilling, redrilling, or reworking of any well or disposal well must file and maintain with the department, on a form provided by the department a bond or alternative form of financial security in the sum of $25,000 for each well drilled, redrilled, deepened, or reworked to a depth less than 10,000 feet, or $50,000 for each well to a depth greater than 10,000 feet. The security must be filed with the department prior to the approval of an application to drill, redrill, deepen, or rework as required in OAR 632-010-0010. A security may be submitted individually for each well, or a blanket security may be filed as described in (b) below. (b) In multi-well operations, a blanket bond or alternative form of security in the minimum amount of $150,000 may be filed in lieu of individual bonds or securities. The blanket amount must be computed as the sum of the applicable individual bond or security amounts required for each well. The department may exclude the following wells from the blanket bond or security computation: (A) Any well that has a gross annual wellhead production in dollars during the past twelve months that is greater than the amount of the required individual well bond. It is the responsibility of the well permittee to file for exclusions annually prior to the permit anniversary date. (c) The bond or security must be executed by the permittee, as principal, and by a company authorized to do business as a surety insurer in the State of Oregon, as surety, and be conditioned upon the faithful compliance by the principal with the statutes, rules, and orders of the department and the board. (2) Any bond or security submitted as required by this section may, with the consent of the department, be terminated and cancelled and the surety relieved of all obligations thereunder. However, the department will not consent to termination and cancellation of any bond until the well or wells covered by such bond have been properly plugged and decommissioned including site reclamation, with the approval of the department, or another valid bond has been submitted and approved.