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Oil and gas well bond cost

The California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources requires operators that drill, deepen or alter wells in the state to post a surety bond for each well being worked on. For wells that are less than 10,000 feet deep, the required bond amount is $25,000. For wells that are 10,000 feet or deeper, the bond requirement is $40,000.

Applicants should verify their required bond amount with the state prior to bonding. The premium price you’ll pay for your California surety bond depends not only on your required bond amount but also on a review of your personal credit report.

Why this bond

By posting a California individual oil and gas well surety bond, principals (oil and gas well professionals) pledge to fully comply with the provisions of Division 3 of the Public Resources Code and all rules and regulations of the State Oil and Gas Supervisor or the district deputy or deputies.

Violations of these terms include:

  • Failing to keep an accurate log of the drilling
  • Causing harmful substances to penetrate underground or surface water
  • Causing unnecessary damage to the environment
  • And more

If the principal fails to conduct business in accordance with the letter of the law and the terms of the surety bond contract, the bond protects harmed parties from financial loss up to the full penal sum of the bond.

Become an operator

According to the California Department of Conservation, operators planning to redrill and rework existing oil wells in the state must post a surety bond. Individual oil and gas well bonds in California remain in full force and effect as long as the principal remains in compliance with the terms of the surety bond agreement.

The surety can cancel the bond according to the provisions of Section 3207 of the Public Resources Code. The bond is valid until the work on the well is completed to the satisfaction of the project’s supervisor.

Licensing requirements

Operators planning to work on existing oil and gas wells in California must obtain a permit from the Department of Conservation before they can begin work. To receive a Permit to Rework/Redrill Well, applicants must submit a Notice of Intention to Rework/Redrill Well. Required information includes:

  • Depth of the well
  • Casing record of the well
  • Present and anticipated zone pressure
  • Present and anticipated completion zone
  • Operator’s name, address & telephone number

Applicants planning to plug or abandon a well must submit a Notice to Abandon/Re-Abandon Well to the department.In addition to a permit, you need a surety bond to perform work on an oil or gas well in California. Take a few minutes to fill out our online bond form to begin our fast and easy bonding process!

Apply for your surety bond

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Additional information