Mississippi Administrative Code › Title 26 - Oil and Gas › Part 2 - WIDE RULES AND REGULATIONS (Order No. 201-51) › Chapter 1 › Rule 26-2-1.4 - APPLICATION TO DRILL

Current through June 25, 2024
(a) Before any
				person shall commence the drilling of any well in search of oil or gas, such
				person shall file in duplicate with the Board on Form 2 his application for a
				permit to drill, accompanied by a certified plat and by a fee of six hundred
				dollars ($600), payable to the State Oil and Gas Board. When two (2) or more
				separately owned tracts of land are embraced within the unit for which the
				permit is sought, the application shall affirmatively state whether or not
				there are separately owned tracts in the drilling unit for which the permit is
				sought, and if so, whether or not the person owning the drilling rights therein
				and the rights to share in the production therefrom have agreed to develop
				their lands as a drilling unit and to the drilling of the well, as contemplated
				by Section  53-3-7, Mississippi Code of 1972. If drilling operations have not
				commenced within twelve (12) months after date of issuance, the permit shall
				become void. If the application complies in all respects with the rules and
				regulations of the Board relating thereto, a permit shall be issued promptly by
				the Supervisor. The issuance of said permit shall constitute the establishment
				of the drilling unit as designated in said application and shall likewise
				constitute the approval of the well location set out in said permit. On good
				cause shown, the unit may be altered by the Board after notice and hearing.
If the application for permit does not comply in all respects
				  with the rules and regulations of the Board relating thereto, said application
				  shall be disallowed, and the Supervisor shall promptly notify the applicant of
				  the reason or reasons for said disallowance.
(b) The operator of each well that has been
				permitted and drilled but not plugged and reported as plugged as required by
				Rule 28(B)(3)(d) shall, for each such well, pay an annual fee of $100.00 to the
				Emergency Plugging Fund of the Mississippi State Oil & Gas Board. The per
				well annual fee is due and payable by the operator of the well on July
				1st of each year for each well which is then
				permitted and drilled but not plugged and reported as plugged as required by
				Rule 28(B)(3)(d). Any such payment of the annual fee provided for herein shall
				be accompanied by an attachment listing the field name, API #, and well name of
				each well covered by said payment.
In the event of non-payment of said annual fees by August
				  15th of any given year, the Board may, in addition
				  to any other means of enforcement allowed under the statutes, rules and
				  regulations of the Board, suspend the permit, suspend the Form 8 (Authorization
				  to Transport Oil or Gas) and/or suspend the Form 9-A (Inactive Well Status) on
				  the subject well and/or any other wells operated by the subject operator. Any
				  such suspension may be carried out by the Supervisor without further action
				  from the Board. After such suspension, reinstatement shall require payment by
				  the subject operator of the delinquent fee plus five percent (5%) penalty per
				  month for each month or portion of a month after July that the fee remains
				  unpaid.
(c) FINANCIAL
				RESPONSIBILITY.
(1) As a prerequisite to any
				person or persons hereafter being issued a permit to drill under the provisions
				of this Rule, or upon filing of an Oil & Gas Board Form 2 requesting Change
				of Operator of any well, said person(s) shall file with the Board proof of
				financial responsibility in such form as is acceptable to the Supervisor in an
				amount as hereinafter set forth, in accordance with the rules, regulations, and
				orders of the Board and with the laws of the State of Mississippi. Likewise,
				the Operator of each unplugged well permitted by this Board prior to August 1,
				1998 shall file with the Board such proof of financial responsibility. The
				amount of the financial responsibility instrument for these wells permitted
				prior to August 1, 1998 shall be in the amount required in this Rule 4. Failure
				to provide such proof of financial responsibility on or before January 1, 2009
				for unplugged wells permitted prior to August 1, 1998, may subject such wells
				to immediate plugging. Such financial responsibility instrument shall be
				payable to the Emergency Plugging Fund of the Mississippi State Oil & Gas
				Board, for each such well, and shall be executed by such person(s) as
				principal, and by some surety approved by the Board or by the Supervisor. Each
				such financial responsibility instrument shall be conditioned that, if such
				well is drilled, such person(s) shall properly plug and abandon such well in
				accordance with the provisions of Rule 28 of the Statewide Rules &
				Regulations, all other statutes, rules, regulations, permits and orders of the
				Board.
(2) The amount of such
				financial responsibility instrument shall be in accordance with the following
				relationship of footage:
Depth in feet
Amount required
________________
________________
Zero to 10,000
$20,000
10,001 to 16,000
$30,000
16,001 or more
$60,000
Provided, further, the Board, in its reasonable discretion
				  for good cause, after notice and hearing, on its own motion or on motion of any
				  interested party, may require proof of a different amount of surety because of
				  environmentally sensitive conditions at the drill site or for other justifiable
				  reasons and may determine any existing financial responsibility instrument to
				  be inadequate and may require the filing of a new and different instrument or
				  an appropriate amendment to a previously filed instrument. The amount of such
				  instrument required may be more or less than hereinabove set forth, the hearing
				  upon such matter shall be conducted in the same manner as any other hearing
				  before the Board.
Any such financial responsibility instrument filed with the
				  Board, including any amendment thereto, must set forth the correct legal name
				  and address of the principal and the surety thereto and must be countersigned
				  by a Mississippi agent of such surety, setting forth the correct legal name of
				  such agent and such agent's company affiliation and correct business
				  address.
(3) Provided
				further, however, the Board may allow the filing of a blanket financial
				responsibility instrument by an operator in the amount of One Hundred Thousand
				Dollars ($100,000.00) in a form acceptable to the Supervisor. Such application
				for blanket coverage shall be accompanied by an attachment listing field name,
				API# and well name for each well covered by said blanket bond. The Board, after
				notice and hearing, may in its reasonable discretion for justifiable and good
				cause, require the filing of a blanket financial responsibility instrument of a
				different amount superseding any previous order by the Board. Any such blanket
				financial responsibility instrument shall have the same requirement as set
				forth hereinabove for single wells except that blanket financial responsibility
				instruments may apply to more than one well and the amount of such blanket
				coverage may not be required to be in accordance with the aforesaid
				relationship of footage.