Current through Register Vol. 35, No. 7, April 9, 2024
Section 19.15.8.9 - CATEGORIES AND AMOUNTS OF FINANCIAL ASSURANCE FOR WELL PLUGGINGA.Applicability. An operator who has drilled or acquired, is drilling or proposes to drill or acquire an oil, gas or injection or other service well within this state shall furnish a financial assurance acceptable to the division in accordance with 19.15.8.9 NMAC and in the form of an irrevocable letter of credit, plugging insurance policy or cash or surety bond running to the state of New Mexico conditioned that the well be plugged and abandoned and the location restored and remediated in compliance with commission rules, unless the well is covered by federally required financial assurance.B. A financial assurance shall be conditioned for well plugging and abandonment and location restoration and remediation only, and not to secure payment for damages to livestock, range, crops or tangible improvements or any other purpose.C.Active wells. An operator shall provide financial assurance for wells that are covered by Subsection A of 19.15.8.9 NMAC and are not subject to Subsection D of 19.15.8.9 NMAC in one of the following categories: (1) a one well financial assurance in the amount of $25,000 plus $2 per foot of the projected depth of a proposed well or the depth of an existing well; the depth of a well is the true vertical depth for vertical and horizontal wells and the measured depth for deviated and directional wells; or(2) a blanket plugging financial assurance in the following amounts covering all the wells of the operator subject to Subsection C of 19.15.8.9 NMAC: (a) $50,000 for one to 10 wells;(b) $75,000 for 11 to 50 wells;(c) $125,000 for 51 to 100 wells; and(d) $250,000 for more than 100 wells.D.Inactive wells. An operator shall provide financial assurance for wells that are covered by Subsection A of 19.15.8.9 NMAC that have been in temporarily abandoned status for more than two years or for which the operator is seeking approved temporary abandonment pursuant to 19.15.25.13 NMAC in one of the following categories:(1) a one well financial assurance in the amount of $25,000 plus $2 per foot of the projected depth of a proposed well or the depth of an existing well; the depth of a well is the true vertical depth for vertical and horizontal wells and the measured depth for deviated and directional wells; or(2) a blanket plugging financial assurance covering all wells of the operator subject to Subsection D of 19.15.8.9 NMAC: (a) $150,000 for one to five wells;(b) $300,000 for six to 10 wells;(c) $500,000 for 11 to 25 wells; and(d) $1,000,000 for more than 25 wells.E. Operators who have on file with the division a blanket financial assurance that does not cover additional wells shall file additional single well bond financial assurance for any wells not covered by the existing blanket bond or, in the alternative, may file a replacement blanket bond.19.15.8.9 NMAC - Rp, 19.15.3.101 NMAC, 12/1/08, Amended by New Mexico Register, Volume XXVI, Issue 12, June 30, 2015, eff. 6/30/2015, Amended by New Mexico Register, Volume XXX, Issue 01, January 15, 2019, eff. 1/15/2019