1. (a) This section is applicable for the following types of wells:

   1. (1) Oil and gas production wells;
   2. (2) Water supply wells used in enhanced oil and gas recovery projects;
   3. (3) UIC Class II disposal and Class II commercial disposal wells; and
   4. (4) UIC Class II water injection wells used in enhanced oil and gas recovery projects.

2. (b) Definitions.

   1. (1) “Abandoned well” means:

      1. (A) An oil and gas production well which has not produced for over two (2) years;
      2. (B) A UIC Class II saltwater disposal or UIC Class II water injection well which is no longer used due to the plugging of all the wells on the lease or unit or for which an agreement to continue use of the well has not been granted by the lease holder;
      3. (C) A well for which the underlying lease has been released in writing by the lessee or has been declared forfeited or invalid by a court order, and such order is final and the appeal period has lapsed, and the lessor states in writing that the lessor has not leased out the oil and gas working interest to any other person and does not intend to so lease, and that the lessor does not intend to operate the well, and that the lessor desires that the well be plugged;
      4. (D) A well owned or operated by a permit holder who has made no payment by March 1 of a current annual well fee assessment in accordance with Arkansas Code § 15-71-116;
      5. (E) A well that has been ordered to be plugged by the Oil and Gas Commission and the permit holder has failed to do so within the time frame specified in the Oil and Gas Commission order; or
      6. (F) A well site which has not been properly restored following the completion of well plugging activities;
   2. (2) “Director” means the Oil and Gas Commission Director of Production and Conservation;
   3. (3) “Leaking well” means a well drilled for the exploration, development, storage or production of oil or gas, or for injection, saltwater disposal, saltwater source, observation, and geological or structure test which is leaking saltwater, oil, gas, or other deleterious substance into any freshwater formation or onto the surface of the land in the vicinity of the well;
   4. (4) “Well site” means the area around and near the well, including any associated pits, crude oil or produced water storage tanks, or other related production facility equipment, such as injection pumps, compressors, or gas processing equipment;
   5. (5) “Well site equipment” means the equipment, including but not limited to an associated tank battery, production and injection facility equipment, hydrocarbons from the well that are stored in tanks located on the lease, and hydrocarbons recovered during the plugging operation; and

   6. (6) “Well site restoration" means remediation of a well site, including but not limited to the following activities:

      1. (A) An emergency cleanup of spilled crude oil or saltwater;
      2. (B) Remediation of conditions endangering the public health or safety, or contaminating or potentially contaminating:

3. (i) Surface waters;

   1. (ii) Groundwater; or

      1. (iii) The surface of the land;

      2. (C) Work to repair or contain leaks of produced fluids from wells, production or injection equipment, pits or other containment structures, which are contaminating or potentially contaminating:

         1. (i) Surface waters;
         2. (ii) Groundwater; or
         3. (iii) The surface of the land; or

      3. (D) Repairing a well leaking natural gas or hydrogen sulfide gas endangering or potentially endangering public safety or creating a potential fire hazard.

         1. (c) If the Director of Production and Conservation finds, upon inspection and/or review of Oil and Gas Commission records, that a well drilled for the exploration, development, storage or production of oil or gas, or for injection, saltwater disposal, saltwater source, observation, and geological or structure test, may be abandoned, well site restoration has not been completed, is a leaking well, or the well or well site creates an imminent danger to the health or safety of the public, the director may schedule a hearing in accordance with established procedures.
         2. (d) If after notice and a hearing, the commission finds that a well drilled for the exploration, development, storage, or production of oil or gas, or for injection, saltwater disposal, saltwater source, observation, a geological or structure test, may be abandoned, well site restoration has not completed, is a leaking well, or the well or well site creates an imminent danger to the health or safety of the public, the commission shall issue an order requiring the permit holder to properly plug, replug, repair, or restore so as to remedy the situation.
4. (e) If the permit holder fails to properly plug, replug, repair, or restore so as to remedy the situation within thirty (30) days from the time frame prescribed by the commission order, the abandoned well or well site, leaking well, a well or well site that creates an imminent danger to the health or safety of the public, or a well site restoration has not been completed, the well or well site shall be subject to the provisions of this section.

5. (f)

   1. (1) The director may then authorize any person to enter upon the land and properly plug, replug, repair, or restore so as to remedy the situation.
   2. (2) The director may dispose of all well site equipment and hydrocarbons to offset the costs of properly plugging, replugging, repairing, or restoring so as to remedy the situation.
   3. (3) Proceeds from any public sale, auction, or private sale of all well site equipment or hydrocarbons shall be deposited into the Abandoned and Orphaned Well Plugging Fund or used to offset plugging costs.
   4. (4) All work completed under this section shall be paid with funds from the Abandoned and Orphan Well Plugging Fund.

6. (g)

   1. (1) The permit holder shall reimburse the commission for all costs expended to remedy the situation.

   2. (2) All payments shall be:

      1. (A) By cashier’s check or money order; and
      2. (B) Deposited into the Abandoned and Orphaned Well Plugging Fund.
   3. (3) Failure to reimburse the commission will result in the initiation of commission enforcement action to recover the expended funds.
   4. (4) Prior to repayment of all expended funds, the permit holder shall not be permitted to operate any other existing wells in the permit holder’s name.
   5. (5) Upon repayment and prior to being permitted to operate any wells, the permit holder may be required to post additional bond as determined by the director in accordance with 15 CAR § 275-202, to ensure against the plugging of future abandoned wells not plugged by the permit holder.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Source: new rule April 13, 2008; amended November 26, 2009)"