Current through Register Vol. XLI, No. 50, December 13, 2024
Section 35-4-10 - Separate Bonds; Blanket Bonds; Financial Responsibility; Registration; Designation of Agent; Transfer of Title and Operator Status; Transfer Procedures; Periodical Circular; Hearings; Ineffective Bonds; and Financial Responsibility from Competing Interests10.1. Separate Bonds.10.1.a. Each permit application filed after the effective date of this rule shall be accompanied by a separate bond with corporate surety or cash or other collateral security in compliance with W. Va. Code § 22-6-26 and shall be submitted with form OP-7, "Bond for Single Oil or Gas Well, Single Liquid Injection Well or Single Waste Disposal Well," except where: (a) a blanket bond is being furnished pursuant to W. Va. Code § 22-6-26(c); or (b) the permit application is for a permit to plug a well that is already subject to corporate surety, cash or collateral security that satisfied applicable requirements at the time such corporate surety, cash or collateral security was furnished. 10.1.b. The demonstration of financial responsibility for individual wells after the effective date of this rule shall be accompanied by a separate bond with corporate surety or cash or other collateral security in the amount of five thousand dollars ($5000) in compliance with W. Va. Code §§ 22-6-26, 22-10-4 and 22-10-5, except where a blanket bond is being furnished pursuant to W. Va. Code § 22-6-26(c), and shall be submitted with Form OP-7, "Bond for Single Oil and Gas Wells, Single Liquid Injection Wells, or Single Waste Disposal Wells." Any corporate surety bond, cash or collateral security furnished prior to the effective date of this rule shall remain in effect for the Office until such time as the well operator is issued any new determination of financial responsibility as may be required by this rule.10.1.c. A well currently subject to a bond of less than five thousand dollars ($5,000) or for which no bond exists for the determination of financial responsibility shall be transferred to an existing or new five thousand dollar ($5,000) bond in compliance with W. Va. Code § 22-6-26 by filing form OP-77.10.2. Blanket Bonds. 10.2.a. Any blanket bond furnished after the effective date of this rule shall have corporate surety or cash or other collateral security and shall be submitted with Form OP-8, "Blanket Bond for Oil and Gas Wells, Liquid Injection Wells, and Waste Disposal Wells." Any blanket bond with corporate surety, cash or collateral security furnished in connection with any permit or permits issued prior to July 11, 1985 shall remain in effect for the benefit of the Office until such time as the well operator is issued any additional permit and such well operator has furnished new or additional corporate surety, cash or collateral security complying with the statute; Provided, that if a blanket bond furnished prior to July 11, 1985 complies with the requirements of the statute, a new blanket bond shall not be required to be submitted with a permit application; Provided further, that if a permit application is for a permit to plug a well that is already subject to corporate surety, cash or collateral security that satisfied applicable requirements at the time such corporate surety, cash or collateral security was furnished, no additional corporate security, cash or collateral security shall be required.10.2.b. The demonstration of financial responsibility for multiple wells after the effective date of this rule shall be accompanied by corporate surety or cash or other collateral security in compliance with W. Va. Code §§ 22-6-26, 22-10-4 and 22-10-5 and shall be submitted with Form OP-8, "Blanket Bond for Oil and Gas Wells, Liquid Injection Wells, and Waste Disposal Wells." Any corporate surety bond, cash or collateral security furnished prior to the effective date of this rule shall remain in effect for the Office until such time as the well operator is issued any new determination of financial responsibility as may be required by this rule.10.2.c. Wells currently subject to a blanket bond of less than fifty thousand dollars ($50,000), or for which no bond exists, or for which a new blanket bond is desired for the determination of financial responsibility shall be transferred to an existing or new fifty thousand dollar ($50,000) blanket bond in compliance with W. Va. Code § 22-6-26 by filing form OP-77.10.3. Registration; Designated Agent; Transfer of Title and Operator Status.10.3.a. All persons owning or operating or proposing to own or operate any well in West Virginia shall register with the Chief. In all cases, an agent or attorney in fact shall be designated on Form OP-1, "Designation of Agent by Well Owner or Operator" by and for each well or operator upon whom process, notices, orders, and other communications issued pursuant to W. Va. Code §22 may also be served; but the designation shall not be effective until it has been accepted in writing by the designee and approved by the Office. Every well owner or operator who has designated such agent or attorney in fact shall, within five (5) days after termination of such designation, notify the Office of such termination and designate a new agent on Form OP-1. This rule applies to all well operators, not merely those whom W. Va. Code § 22-6-6 specifically requires to designate an agent; Provided, that a well operator who is a natural person and a resident of the State of West Virginia may list himself instead of an agent for service of all papers.10.3.a.1. When title to a well or the right to operate a well is transferred from one (1) well operator to another, the Chief shall be notified in writing within five (5) days by the transferor well operator or, if he no longer exists, by one or more of the owners of the well, the name and address of the transferee well operator. A copy of such notification shall be delivered to the transferee well operator. Failure to notify the Chief of such transfer shall be a violation of this rule by said transferor and shall be punishable under W. Va. Code § 22-6-34, and in addition, all bonds of such transferor under W. Va. Code §22-6 shall be forfeited.10.3.a.2. The transferee well operator shall forthwith register with the Office if he has not previously registered. In any event, said transferee shall forthwith notify the Office of his designated agent or attorney in fact pursuant to subsection 10.3, unless a designation has already been made and approved. The transferee well operator shall file with the Office on form OP-77 the well name and the permit number of the subject well, the county and district in which the subject well is located, the names and addresses of the transferor well owners or operators and the transferee well operators, a copy of the instrument of assignment or transfer, or a certification of such assignment or transfer acceptable to the Chief, and the applicable bond, cash, or collateral security described in W. Va. Code § 22-6-26.10.3.a.3. No assignment or transfer by the transferor owner shall relieve the transferor well owner of any obligation and liabilities pursuant to this rule or W. Va. Code §22, unless and until the Office of Oil and Gas accepts and then notifies the transferee and transferor as outlined in subsection 10.4 below that they have complied with the provision of section 10.10.4. Filing Requirements and Procedure for the Transfer of Operator and Declaration of Operator Status.10.4.a. General requirements.10.4.a.1. No transfer of operator or declaration of operator status under this rule will be approved until such time as a copy of Form OP-1, "Operator Registration Form and Designation Form," has been filed.10.4.a.2. All forms promulgated by the Office of Oil and Gas and required by this rule may be replaced by copies of any applicable successor forms promulgated by the Office of Oil and Gas.10.4.a.3. A separate application must be submitted for each well for which a transfer is desired.10.4.a.4. Each application must be accompanied by a filing fee of fifty dollars ($50). Where an operator is submitting several applications at one time, a single check may be submitted for a sum equal to the number of applications multiplied by fifty dollars ($50). Such fee should be paid by the transferor, but in no case will any well be transferred without the fee.10.4.a.5. Each application shall be on Form OP-77.10.5 Transfer Procedures.10.5.a. Initial Action by the Office of Oil and Gas -- Upon receipt of an application to transfer a well from one operator to another or to transfer a well by a single operator to another bond, the Office of Oil and Gas will conduct a review of the submitted data along with other information available to it within sixty (60) days.10.5.b. Periodical circular. 10.5.b.1. The Office of Oil and Gas will publish from time to time, but not less often than monthly, a circular indicating the status of various applications filed under this rule.10.5.b.2. The circular will identify each well by applicant and by a file number which will indicate: 10.5.b.2.A. The date received by the Office of Oil and Gas;10.5.b.2.B. The API county and permit number;10.5.b.2.C. The name of the transferee and transferor; and10.5.b.2.D. The date on which the determination order was final.10.5.c. Notice of Hearing -- Notice of all filings for applications for transfer and designation of operator status under this rule and 35 CSR 5 §3.1 ("Procedure for Designation of Bona Fide Future Use") will be published by the Office of Oil and Gas, indicating that interested persons may intervene in the application by filing written comments with the Office of Oil and Gas within fifteen (15) days from the date that the circular is published. If objections are made by any interested person or by the Office of Oil and Gas or if the Chief determines that other information may be necessary in order to make a determination, a public hearing may be held. On the hearing date, the applicant and all persons who have timely filed objections on or before the date of the hearing will be given an opportunity to present additional evidence.10.5.d. Determination -- After a hearing has been held, a determination as to whether the well qualifies to be transferred to the transferee will be made by the Chief. If no objection is made within the time prescribed by subdivision 10.5.c above, the Chief will make a determination as to whether the well qualifies to be transferred. Notice will be given of the Chief's approval of the transfer by publication in the circular, and the Chief shall give written notice of release to the transferor well owner of any bond and return to the transferor well owner any cash or collateral securities deposited pursuant to W. Va. Code §§ 22-6-12, 22-6-14 or 22-6-26.10.6. If for any reason the bond or other proof of financial responsibility on a well is rendered invalid or ineffective, the operator shall have sixty (60) days in which to replace such bond or other proof of financial responsibility. In the event such bond or other proof of financial responsibility is not replaced, then the Chief shall order the well to be shut in and may order the well to be plugged.10.7. Nothing in this section shall prohibit the Chief from accepting and holding bonds or other forms of financial responsibility from more than one competing interest.