Surety Requirements for Oil and Gas Operators


All operators of oil and gas and/or service wells are required by State Statute to provide to the Oklahoma Corporation Commission (OCC) surety in the form of either a bond, letter of credit, certificate of deposit, cashier's check or other negotiable instrument in the amount of $25,000 in U.S. dollars.

The rules of the OCC state that "any person who drills or operates any well for the purpose of exploration, development or production of oil or gas, or as an injection or disposal well, within this State, shall furnish in writing, on forms approved by the OCC, an agreement to drill, operate and plug wells in compliance with the rules and regulations of the OCC and the laws of this state, together with evidence of financial ability to comply with the requirements for plugging, closure of surface impoundments, removal of trash and equipment as established by the rules of the OCC an by law."  [52 O.S. 318.1]  Any operator violating this Section shall be fined $500 and face having the entire operator's wells shut down without a hearing, notice or order of the OCC.  The wells of any such person violating these provisions shall remain shut-in for non-compliance until the required evidence of surety is obtained and verified by the OCC.  To establish evidence of financial ability, the OCC shall require one of the following for operator's with less than 3 years of registration with the OCC:

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  • BOND - Form 1006: $25,000 in U.S. dollars. The bond shall be issued for a minimum of one year in length and issuing agent must be recognized by the Oklahoma State Insurance Commission. This form must be accompanied by a Form 1006B.
  • Letter Of Credit - Form 1006C: $25,000 in U.S. dollars issued for a minimum of one year.  It can be issued for longer periods if so stated.  Issuing agent must be recognized by the Oklahoma Banking Association.  This form must be accompanied by a Form 1006B.
  • Certificate Of Deposit - (CD):   $25,000 in U.S. dollars issued for a minimum of one year, but can be for an indefinite period. Usually the CD is with an automatic renewal. The CD must be made out in the following manner: "(NAME OF THE OPERATOR AND OKLAHOMA CORPORATION OR OKLAHOMA CORPORATION COMMISSION". A copy of the CD and a Form 1006B must be provided to the OCC. Please setup your CD with the bank in such a way that the interest earned is diverted to a separate account accessible only to the operator. Issuing agent must be recognized by the Oklahoma Banking Association.
  • Cashier's Check:  $25,000 in U.S. dollars made out in favor of the OCC.  The cashier's check must be accompanied by the Form 1006B.
  • Negotiable Instruments:  For other types of negotiable instruments, please contact the Surety Department of the OCC.
  • Form 1006B - Operator's Agreement to Plug Oil, Gas and/or Service Wells within the State Of Oklahoma:  This form must be submitted along with any of the above mentioned types of surety.  This form must be submitted on an annual basis regardless of the type of surety being provided.  The operator shall furnish the names and addresses of all officers, board of directors and/or any other persons that are involved with the day to day operations of the entity.

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All forms submitted to the OCC concerning Surety must be delivered on OCC approved forms and must contain original signatures.  NO FAXED COPIES WILL BE ACCEPTED.  ALL FORMS MUST BE COMPLETED IN INK.

Upon receipt and approval of surety, an Operator's Number will be assigned.  This operator number will be used on all forms submitted to both the OCC and the Oklahoma Tax Commission.  All forms must show the operator's name exactly as it is on the filed documents (i.e.: "John Q. Public" not just "John Public").  Any changes in an operator's Federal Employer Identification Number may require an operator to receive a new operator number, questions concerning the change in an FEI number should be directed to either the OCC Surety Department or Taxpayer Assistants at the Oklahoma Tax Commission.

If the address of the Operator changes, it is required by the OCC rule OAC 165:10-1-16 to notify the OCC in writing on Company's Letterhead within 30 days after the change has occurred.

It is the responsibility of the operator to remember to renew their surety on an annual basis.

The OCC Rules Book is available for $20.00 for a hard copy or you can go to the OCC web site and download it for free.  We encourage all operators to obtain one and familiarize yourself with the rules.  This can be done in writing, and must include a check made out to:

Oklahoma Corporation Commission
Attn:  Well Records Department
PO Box 52000
Oklahoma City, OK  73152-2000

Requests for individual specific forms can be directed to the same above address in writing or by calling 405-521-2271 or 405-521-2275 or by visiting the OCC website.

The Well Records Department can also be of help with the Form 1073 "Transfer of Operatorship".  They may be reached at the above listed phone numbers or you can mail your completed forms to the above mentioned address.

The Surety Department can be reached at 405-521-2246 or 405-522-6196.

The UIC Department (concerning MIT Tests and/or Form 1073I) can be reached at 405-521-6296.

The Oklahoma Secretary of State can be reached at 405-521-3912.

The Oklahoma Tax Commission can be reached at 405-522-5883 or 405-522-5884.