Montana

Oil and Gas Well Bond

How much does an oil and gas well bond cost in Montana?

The Montana Board of Oil and Gas Conservation requires those who own or operate oil and/or gas wells to post a surety bond to legally work within the state. The required bond amounts vary depending on depth of the wells and how many wells are owned by the principal (well operator).

For operators who own a single existing or soon-to-be acquired well, the required bond amounts are:

• $1,500 if the depth of the well is 2,000 feet deep or less
• $5,000 if the depth of the well is 2,001-3,500 feet deep
• $10,000 if the depth of the well is 3,501 feet deep or more

For operators who own or operate multiple wells, the required bond amount is $50,000.

The Board can increase the required bond amount if it sees fit. Applicants should verify their required bond amount with the state prior to bonding.

These bonds are subject to underwriting, so the best way to find out exactly how much you’ll pay for your surety bond is to request a free surety bond quote now!

Call 1 (800) 308-4358, or submit a bond request, to connect with our team of experts. We can typically provide you with a free, no-obligation surety bond quote within one business day of submitting your application.

Why do I need a Montana oil and gas well bond?

Montana oil and gas well surety bonds ensure that principals (well operators) propose to drill a well or wells for oil, gas, underground injection, or stratigraphic purposes and operate these wells in compliance with the provisions of the laws of the state and the rules, regulations, and orders of the Board of Oil and Gas Conservation. The bond also covers the proper plugging of said well or wells, the restoration of the surfaces of the locations of said well or wells, and the filing of all required notices and records with the board.

All rules, laws, and regulations involving these bonds can be found in the Montana Administrative Rules and the Montana Code Annotated.

Don’t fall out of compliance with the laws of your state and industry! Begin the simple bonding process now.

Considerations for Montana oil and gas well bonds

Montana oil and gas well bonds are released, upon request, after all liabilities are properly removed from the bond.

When filling out the bond form, it is imperative to understand which license/bond type you’re applying for. The following license/bond types are listed on the bond form:

• blanket bond to cover all wells drilled or acquired in the state
• limited bond to cover all wells drilled or acquired subject to limitations, if any
• individual well bond to cover one well
• UIC bond to cover salt water disposal or enhanced recovery injection wells
• replacement bond to supersede and assume all wells covered by the bond

How to obtain an oil and gas well permit in Montana

Companies interested in performing oil and gas well work in Montana must register with the Secretary of State’s office; registration information is available at sosmt.gov.

After registering, applicants must do the following:

1. Submit an organization report (Form 1) with the Board of Oil and Gas Conservation Office.
   This can be sent to 2535 St. Johns Avenue, Billings, Montana 59102.
2. Provide a plugging and reclamation surety bond; the form can be found here.
   This bond must be obtained before a drilling permit is issued or wells are acquired (if located on private or state lands).
   Bonds are available as single or multiple well bonds. Bond amounts can be doubled or the number of wells on a multiple well bond may be limited if the Board determines that additional surety is required.
3. Submit an Application for Permit to Drill (Form 22).
   All information requested on the front and back of the form is necessary, including identifying any additional permits that might be required by state or federal agencies.
   The application must include a well location plat prepared by a registered land surveyor. The land surveyor must give 15 days’ notice to conduct a survey (§ 70-16-111, MCA).

NOTE: The Montana Department of Revenue collects production taxes. For additional information about taxation, visit mtrevenue.gov.

NOTE: Producing wells may also require registration with the Montana Department of Environmental Quality. Facilities with potential emissions of greater than 25 tons per year require a Montana Air Quality Permit or Registration in place of a permit.

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Additional Resources

Montana Board of Oil and Gas Conservation Surety Bond Form

Montana’s Official State Website Montana Board of Oil & Gas Conservation

Montana Secretary of State Montana Administrative Code Rule 36, Chapter 22 Oil and Gas Conservation

Montana Code Annotated 2013 Title 82 . Minerals, Oil, And Gas Chapter 11. Oil and Gas Conservation

Montana Department of Natural Resources & Conservation: For Current and New Operators

Montana Department of Natural Resources & Conservation Forms