Bond amounts for oil and gas wells revised in Kentucky

well operators


On March 20, 2015, Kentucky Governor Steve Beshear passed Senate Bill 186 allowing for revisions to be made to the previously existing bond amounts for oil and gas wells. These new bond amounts will become effective beginning June 24, 2015 and can be read in full in the sections 353.500 to 353.720 of the Kentucky Revised Statutes.

Prior to the passing of this bill, the required bond amounts were not solidified at a hard number. Instead, they were to be determined by the Kentucky Oil and Gas Conservation Commission if the wells were any deeper than 4,000 feet. These amendments help solidify the required amount that principals who operate in the oil and gas well industry need to post.

The new adjusted bond amounts are as follows:

  • $5,000 for wells 4,001 – 4,500 feet deep
  • $6,000 for wells 4,501 – 5,000 feet deep
  • $7,000 for wells 5,001 – 5,500 feet deep
  • $8,000 for wells 5,501 – 6,000 feet deep
  • $25,000 for vertical deep wells
  • $40,000 for horizontal deep wells
  • $200,000 blanket bond for 1-10 vertical deep wells
  • $320,000 blanket bond for 1-10 horizontal deep wells

By posting this bond, principals are ensuring that all wells will be plugged upon completion of each project as well as the reclamation of all disturbed areas affected during digging. The Commission has the right to require a higher bond amount for vertical wells if the projected plugging and reclamation costs outweigh the minimum amount stated in the table above ($25,000).

Each bond posted must be in favor of the Department for Natural Resources and must remain in effect until the completion of plugging and reclamation has been finalized. An individual can post a blanket bond if he or she plans to contract multiple wells (up to ten.)

There are only a few weeks left before this bill becomes recognized as a law. If you know that you need to post a bond in one of the amended amounts in order to keep operating lawfully in Kentucky, contact at 1 (800) 308-4358 to speak to one of our bonding agents. You can also go online to request a free bond quote now. We are here to help!

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About the Author

Emily Jo Pahl
Emily attends the University of Wisconsin - Stevens Point and is pursuing a degree in media communications and creative writing. She is a member of the marketing department and outreach team for, a leading provider of online bonding for clients nationwide.