An Application for Permit shall be filed with the Division of Oil and Gas before a well is drilled, deepened or re-opened for the production of natural gas, crude oil, water supply for enhanced recovery, or injection into a reservoir for the purpose of enhanced recovery. A permit is also required to drill stratigraphic test hole or operate any well under violation in which the previous operator's bond has been forfeited. The permit application is to include a fee of $350 made payable to the Kentucky State Treasurer; three copies of the well plat and appropriate bonding.
The Division of Oil and Gas requires well operators to post DANGER signs in a prominent location on all storage facilities and tank batteries that are active or abandoned. An approved sign may be obtained from the Kentucky Oil and Gas Association.
Oil and gas annual production information shall be supplied to the Division of Oil and Gas on or before April 15 for the previous calendar year's production.
Typically a well will have three records that need to be submitted to the Division of Oil and Gas. The Affidavit of Well Log and Completion Report (Form ED-3), the Affidavit to Time and Manner of Plugging and Filling Well (Form ED-38), and if applicable a copy of the electric log. These documents will be reviewed by the Kentucky Division of Oil and Gas staff, entered into the Oil and Gas RBDMS database and forwarded to imaging for scanning and digital storage. Copies will also be forwarded to the Kentucky Geological Survey for incorporation into the KGS publically available database.
Approximately 7,000 known abandoned wells are found in Kentucky's oil and gas fields. Many more "unknown" oil and gas wells are present. The Testing Permit Program (KRS 353.730) allows an operator to acquire a Testing Permit ($25 fee) to enter a well for 60 days to determine the well's ability to produce gas, oil and/or water. After testing, the operator reports to the Division of Oil and Gas with a Report of Investigation on the results of the testing. If the operator elects not to place the well under his bond, due to, for example, mechanical issues or unfavorable economics the well is returned to the State Plugging List for eventual plugging. If the operator wants to have the well placed under his bond, he will check the appropriate box on Page 2 of the Report of Investigation, establish a bond, and the well will be transferred to his bond. This program provides a very inexpensive vehicle for testing potentially economic abandoned wells, for finding previously unknown abandoned wells, and for getting abandoned wells either back in operation or properly plugged.
A vacuum permit is available if an operator wants to apply this technology to a well (805 KAR 1:040 Vacuums; use of). No fee is required. If another operator has a well within 1,000 feet of the applicant's well the offset operator needs to be notified by registered mail of the intent to apply vacuum in correlative strata. The Kentucky Division of Oil and Gas will hold the permit for a period of 10 days to receive and consider any objections. If no objections are received, the applicant will receive a letter from the Division of Oil and Gas granting an exemption from the vacuum prohibition.
Well Site Reclamation on Severed Mineral Tracts
Well site reclamation is required on all severed mineral leases after the well has been properly plugged and shall be performed in accordance with the plan submitted at the time of the permit application. An inspector will make an on-site inspection of the reclaimed location approximately one year after the area is restored to allow ample time for vegetation to be established.