Corporation Commission

Article excerpt

(80779) NOTICE OF PROPOSED RULEMAKING Cause R.M. No. 000,005 Before the Corporation Commission of the State of Oklahoma.

In the Matter of an Order of the Commission Amending Rules 3-201.1 and 3-401 and Promulgating a New Rule 3-201.5 of the Commission's Oil and Gas Rules.

On July 1st, 1986, legislation became effective which authorized this Commission to accept, as evidence of financial ability to comply with the plugging requirements established by law and Commission rules, certificates of deposit or cash or other negotiable instruments. Pursuant to this authorization, it is proposed that OCC-OGR 3-201.1 be amended to conform to the present statutory authorization and a new rule 3-201.5 be promulgated. Further, present rule 3-201.5 should be renumbered as 3-201.6.

It is further proposed that OCC-OGR 3-401 be amended to permit the temporary plugging of stripper oil or stripper gas wells whether or not located on an otherwise producing lease or unit.

The following proposals are made, with deletions to present language denoted by hyphening through the language and new language denoted by underlining: (Deletions to present language in brackets; new language in bold face.)

OCC-OGR 3-201.1

(a) Any person who drills or operates any well for the exploration, development or production of oil or gas, or as an injection or disposal well, within this State, shall furnish on forms approved by the Corporation Commission, his agreement in writing to drill, operate and plug wells in compliance with the Rules of the Commission and the laws of this State, together with evidence of financial ability to comply with the plugging requirements established by the Rules of the Commission and by law. To establish evidence of financial ability, the Commission shall require:

1. A financial statement showing the net worth of the person to be not less than Fifty Thousand Dollars ($50,000.00); or

2. An irrevocable commercial letter of credit in an amount { not to exceed } of Twenty-five Thousand Dollars ($25,000.00); or

3. A blanket surety bond in an amount { not to exceed } of Twenty-five Thousand Dollars ($25,000.00); or

4. Cash, a cashier's check, a certificate of deposit, bank joint custody receipt, or other negotiable instrument in the amount of Twenty-five Thousand Dollars ($25,000.00).

(b) The Director of the Oil and Gas Conservation Division may recommend which of the { three } four evidences of financial ability shall be submitted. However, in the case of a protest asto the type of evidence of financial ability required, a hearing shall be required, upon the filing of a proper application by the Director, and upon at least fifteen (15) days' notice of the date of hearing published in every county where the operator conducts oil and gas operations and at least fifteen (15) days notice of the date of hearing in a newspaper of general circulation in Oklahoma County.

(c) same

(d) same

(e) The agreement provided for in subsection (a) of this section shall provide that if the Commission determines, after notice and hearing, that the person furnishing the agreement has neglected, failed, or refused to plug an abandoned, or cause to be plugged and abandoned, or replug any well in compliance with the Rules and Regulations of the Commission, that the person shall forfeit from his bond, or letter of credit, or negotiable instrument or shall pay to this State, through the Commission, for deposit in the State Treasury, a sum equal to the cost of plugging the well. …