What is a Texas Oil and Gas Blanket Bond?
If you operate more than one well, this bond is for you! Get bonded today!
Just like the Texas Individual Performance Bond, the Blanket Bond is required by the Railroad Commission of Texas for operators who are:
- Active or inactive
- Operating more than one well at the time of filing
- Responsible for the renewal and filing of the organization report
Also, the operator filing for the Blanket Bond is:
- Operating 10 or fewer wells
- Operating more than 10, but fewer than 100 wells
- Operating 100 or more wells
Who will benefit from the Blanket Bond?
The benefit covers a wide range – from the public to you!
The bond is required by the Railroad Commission of Texas so that you, as an operator, will comply with the rules of the Commission such as the following:
- Inactive wells shall be plugged and restored to prevent disastrous incidents that might harm the public and the environment. This includes polluting the ground or surface water because of a leak where the well is located.
- Active wells, on the other hand, shall be properly maintained and monitored to prevent the aforementioned disastrous incident.
Through the bond, the operator will do its best to abide by the rules; rules that create a logical framework for your business and eventual success.
How much is the Blanket Bond amount?
The bond amount is dependent on the number of wells the operator has. The blanket amount starts at $25,000. That is for operators who have 10 or less inactive or active wells. For operators who have more than ten wells, but are fewer than 100, the blanket amount is $50,000. Lastly, an operator that has more than 100 wells shall file the blanket amount of $250,000.
How do I file for this bond?
As per Sec. 91.106 of the Natural Resource Code, the bond shall be executed by a surety that is authorized to do business in Texas such as us.
Just like any other bond, the first step will be an assessment. One of our trustworthy underwriters will check your credentials first. Once qualified, we can move on to securing that bond for you!
Is there any other information I need to know?
There are a lot more. One of which is the transfer of an active or inactive well. If one operator transfers the well to another operator, the commission requires that the latter shall secure a new bond.
Need more information? Ask one of our friendly professionals!