NEWS BULLETIN

October 23, 2018 --- Vol. 24, No.29October 2018

AOGCC issues revision of proposed new well bonding regulations

Following a public hearing over proposed new regulations for the surety bonding of oil and gas wells in Alaska, the Alaska Oil and Gas Conservation Commission has published a revised version of its proposal. The bonding is designed to ensure that a well operator has the financial resources to plug and abandon a defunct well.

The new proposal sets a minimum bond level of $400,000 per well for one to 10 wells; a $6 million bond for 11 to 40 wells; a $10 million bond for 41 to 100 wells; a $20 million bond for 101 to 1,000 wells; and a $30 million bond for more than 1,000 wells.

At the request of the well operator, the commission can increase or decrease the bonding amount, if there is evidence that warrants an adjustment.

The previous version proposed by AOGCC had set a minimum bond of $500,000 for one or two wells, $800,000 for three or four wells, $1.1 million for five or six wells, with the bonding amount steadily increasing through multiple steps to a maximum of $30 million for 3,500 to 3,999 wells.

Comments on the new proposal need to be filed with the commission by 4:30 pm on Nov. 27.

- ALAN BAILEY

See story in Oct. 28 issue, available online Friday, Oct. 26 at www.PetroleumNews.com

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