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​Bond Information

The Division of Oil and Gas requires a performance bond be on file before a well is drilled or acquired from another operator per KRS 353.590.  This bond is posted to ensure the proper plugging and abandonment of wells and to ensure the filing of well records with the division.  If an operator fails to correct a violation, the bond may be seized by the Commonwealth of Kentucky.

Effective June 27, 2019, the bonding regulations changed.  For a quick overview, please click here.  For more detailed information, refer to KRS353.590.

Bond Release

Plugging Bonds are required to remain in effect until the plugging of the well and requirements of a reclamation plan, if applicable to that permit, have been fulfilled; or until the well is successfully transferred to another operator.

  1. If the well bond was posted prior to June 27, 2019, the operator may submit a written bond release request to the Division immediately after plugging and site closure; with submission of all required records.
  2. If the well bond was posted after June 27, 2019:
    • Upon plugging and submission of all required records, the operator must also submit a written notification to the Division stating the date the disturbed area was reclaimed in accordance to the Operations and Reclamation Plan (OG-10).
    • After a one-year period has lapsed, the operator may submit a written request to have the bond released.
    • According to 805 KAR 1.170:  The bond … shall not be released until a division inspector has: (a) Made an inspection of the well site one (1) year after the date of the letter of notification from the operator of final reclamation and plugging; and (b) Filed a report to the director documenting that the following have occurred: 1. All areas disturbed by the operator have been secured in a manner to prevent runoff, sedimentation, settlement of the roadway, or sliding of cut slopes or any fill material; 2. A diverse and effective permanent vegetative cover has been established; and 3. Any matters relating to settlement, inadequate vegetative cover, or erosion have been corrected.

Bonds can only be released by a written request from the operator or from the surety bond company.

Well Transfers

To transfer a well, an operator must complete the Well Transfer form.  The form must be signed by both the selling party and the buying party.  The original signed form must be forwarded to our office along with appropriate transfer fee(s).  As of June 27, 2019, a fee of $50 payable to the Kentucky State Treasurer will be assessed for each well transferred.  Upon receipt of the Well Transfer form and appropriate fees, our office will review the items shown on the Buying Party Checklist and Selling Party Checklist. Please ensure the items shown on the checklist(s) have been reviewed and/or filed with this office prior to submitting the Well Transfer form.

Kentucky Energy and Environment Cabinet
300 Sower Blvd
Frankfort, KY 40601

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