West Virginia Oil, Gas or Waste Disposal Well Bond Guide
If you are applying to become a loan servicer in West Virginia, you'll need a surety bond. Learn how the bonding process works with this quick guide.
Bond Overview
- Purpose: To ensure oil and gas well operators comply with state lows and regulations
- Who Needs It: All oil and gas well operators in West Virginia
- Regulating Body: The West Virginia Department of Environmental Protection
- Required Coverage: $5,000 for single well, $50,000 for a blanket bond to cover multiple
- Premium Rates: Start at $50 and $100 respectively, credit-based
How much does an oil or gas well bond cost in West Virginia?
The West Virginia Department of Environmental Protection requires surety bonds from operators of oil or gas wells, liquid injection wells, and waste disposal wells.
Bond amounts for a single oil or gas well, liquid injection well, or waste disposal well are typically $5,000. Blanket bonds to cover multiple wells are usually $50,000.
Due to the nature of the work guaranteed by these bonds, applicants will be subject to an underwriter’s review prior to receiving a quote. Qualified individual well bonds, as well as blanket well bonds, are issued at a cost based on your credit history.
Why do I need this bond?
Oil and gas well bonds in West Virginia are put in place to ensure that principals (oil and gas well operators) perform all duties in accordance with all laws of the state. Under this bond, well workers must:
- Plug and abandon wells after the work has been completed in full in accordance with Chapter 22, Article 6 of the West Virginia Code
- Commence the reclamation of the area of land disturbed in siting, drilling, completing or producing the well
- Clear all waste and excess materials from the site after completion of the project
If the principal violates the terms of his or her bond agreement and the state or individual is harmed as a result, the bond will cover all financial losses up to the full penal sum of the bond. The principal must reimburse the surety for all damages paid out.
What’s the fine print?
West Virginia oil, gas or waste disposal well bonds run continuously unless otherwise canceled.
The applicant must indicate on the bond form if he or she is an individual, a partnership, a corporation or a limited liability company. A notary public must acknowledge the surety bond contract.
Additional Resources
- Office of Oil and Gas Handbook
- West Virginia Department of Environmental Protection, Office of Oil and Gas
- West Virginia Search Oil and Gas Database
- Title 35 Legislative Rules Department of Environmental Protection Oil and Gas Series 4 Oil and Gas Wells and Other Wells
- Chapter 22. Environmental Resources. Article 6. Office of Oil and Gas; Oil and Gas Wells; Administration; Enforcement
- West Virginia Code Chapter 22. Environmental Resources
- Gas and Oil Association of West Virginia
- West Virginia Department of Environmental Protection Oil and Gas Forms
