PURPOSE: Bonding is required of an operator before commencing oil or gas drilling or operations to insure compliance with the provisions of the rules of the council, specifically with reference to the proper plugging for abandonment of a well(s). (1) Prior to commencement of oil or gas drilling or operations, the person, firm or corporation commencing drilling or operations shall make, or cause to be made, and file with the state geologist a good and sufficient bond for each well or hole and payable to the state of Missouri, conditioned for the performance of the duty to comply with all the provisions of the laws of the state of Missouri and the rules and orders of the Oil and Gas Council. This bond shall remain in force and effect until plugging of the well or hole is approved by the state geologist and is released by the state geologist, or a new bond is filed by a successor in interest and is released by the state geologist. Application for release of bond shall be made by letter to the state geologist who shall release the bond if the requirements of the law and regulations have been met. Bond will be required in the following amounts during the entire operation of the well:

SINGLE WELL BOND Depth of Well

From To Amount 0' 500' $1000 501' 1000' $2000 1001' 2000' $3000 2001' 5000' $4000 5001' _____ $5000 plus $1/ foot beyond 5001 feet

Refer to 10 CSR 50-2.070(1)(G) for noncommercial gas well bond amounts.

BLANKET WELL BOND Depth of Well Number of Unplugged

From To Amount Wells/bond 0' 800' $20,000 50 wells 801' 1200' $30,000 15 wells

1. (A) However, the blanket bond amount may be increased by the single well bond amount (which varies depending on the depth of the well—see Single Well Bond table) for every unplugged well in excess of the maximum allowable unplugged wells per blanket bond as shown in the Blanket Well Bond table.
2. (B) All wells permitted prior to the effective date of this regulation shall comply with these bonding requirements no later than January 1, 1990. All wells permitted on or after the effective date of this regulation shall comply with the previously mentioned bonding requirements prior to permit issuance. 10 CSR 50-2

1. (2) The bond shall be by a corporate surety authorized to do business in the state of Missouri and shall be submitted on form OGC-2. In lieu of a bond with a surety, an applicant may furnish to the council his/her own personal bond, secured by a certificate of deposit in an amount equal to that of the required surety bond. The personal bond shall be submitted on form OGC-2A. When the bond is filed, the state geologist shall immediately review the bond and if the bond is in proper form, the state geologist shall approve the bond with the conditions which may be required by the council or by rule. No drilling or operation shall commence or continue unless there is on file a bond approved by the state geologist.

2. (3) Personal bonds shall be subjected to the following conditions:

   1. (A) The institution issuing the certificate of deposit must be insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC);
   2. (B) Only automatically renewable certificates of deposit will be accepted; and
   3. (C) Any interest on the certificates of deposit shall be made payable to the permittee.

AUTHORITY: section 259.070, RSMo 1986.* Original rule filed Oct. 11, 1966, effective Oct. 21, 1966. Amended: Filed Sept. 12, 1973, effective Sept. 22, 1973. Amended: Filed Sept. 10, 1979, effective Feb. 1, 1980. Amended: Filed Sept. 13, 1983, effective Dec. 11, 1983. Amended: Filed May 18, 1987, effective July 24, 1987. Amended: Filed Dec. 20, 1988, effective May 25, 1989. *Original authority: 259.070, RSMo 1965, amended 1972, 1983, 1987.