The Division of Oil and Gas requires a performance bond be on file before a well is drilled or acquired from another operator per KRS 353.590. This bond is posted to ensure the proper plugging and abandonment of wells and to ensure the filing of well records with the division. If an operator fails to correct a violation, the bond may be seized by the Commonwealth of Kentucky.
A bond shall be released after a well has been properly plugged with all required records submitted to the Division of Oil and Gas. A bond shall also be released if the well(s) have been officially transferred to a successor operator. Bonds can only be released by a written request from the operator or from the surety bond company.
To transfer a well, an operator must complete the Well Transfer form. The form must be signed by both the selling party and the buying party. The original signed form must be forwarded to our office along with appropriate transfer fee(s). A fee of $25 payable to the Kentucky State Treasurer will be assessed for each well transferred. Upon receipt of the Well Transfer form and appropriate fees, our office will review the items shown on the Buying Party Checklist and Selling Party Checklist. Please ensure the items shown on the checklist(s) have been reviewed and/or filed with this office prior to submitting the Well Transfer form.