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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
SENATE BILL 1418 By: Boren
AS INTRODUCED
An Act relating to oil and gas operations; defining
terms; establishing certain liability; requiring
certain actions prior to transfer; authorizing
promulgation of rules; authorizing certain disclosure
upon written request; authorizing certain petition;
authorizing civil action and recovery of certain
fees; prohibiting retaliation; requiring certain
approval by the Corporation Commission; requiring
certain notice; construing provisions; providing for
codification; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 318.11 of Title 52, unless there
is created a duplication in numbering, reads as follows:
A. For the purposes of this section:
1. “Operator” means the person authorized by the Corporation
Commission to drill, complete, and operate a well for the intended
development and production of oil, gas, or other hydrocarbons,
regardless of whether the well is completed or produces any;
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2. “Plugging and site-restoration obligations” include all
duties to plug, re-plug, repair, remediate, or reclaim a well or
associated site;
3. “Successor” means any person or entity that acquires,
whether directly or indirectly, assets or operating interests from a
transferring operator; and
4. “Transfer” means any sale, assignment, conveyance, merger,
division, or other transaction by which an operator or its assets,
leases, wells, or operating interests are transferred to another
person or entity.
B. A successor shall be jointly and severally liable with the
transferring operator for all plugging and site-restoration
obligations associated with any well, lease, or operating interest
acquired through a transfer unless the Corporation Commission
determines, prior to the transfer, that the successor has provided
sufficient financial assurance to satisfy all such obligations.
C. Liability pursuant to subsection B of this section shall be
established under the following conditions:
1. The successor has inadequate capitalization to meet plugging
and restoration obligations as determined by:
a. submitted financial statements,
b. the estimated cost to plug and restore all acquired
wells as provided by the Commission, and
c. posted financial assurance;
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2. The transfer is made to an entity that shares ownership,
management, officers, or controlling persons with the transferring
operator and the transfer would reasonably diminish the ability of
the transferring operator or successor to satisfy plugging
obligations;
3. The transferring operator is insolvent, financially
distressed, or subject to foreclosure, or has outstanding unpaid
regulatory penalties or compliance orders at the time of the
transfer;
4. The transaction has the effect of avoiding or delaying
plugging obligations including any transfer for nominal or non-arm’s
length consideration; or
5. Any material misrepresentation or omission related to the
condition of wells, estimated plugging costs, or financial assurance
submitted to the Commission in connection with the transfer.
D. 1. A successor shall conduct reasonable due diligence
regarding the condition of all wells, associated liabilities, and
plugging and site-restoration obligations prior to any transfer.
2. A transferring operator shall provide accurate and complete
information regarding well condition, production status, mechanical
integrity, and estimated plugging costs.
3. Failure by either the transferring operator or the successor
to comply with this subsection shall constitute an independent basis
for successor liability.
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4. The Corporation Commission shall promulgate rules to
establish minimum due-diligence requirements including well
inspection standards, documentation of mechanical integrity and
environmental conditions, cost estimates for plugging and
restoration, and disclosure of outstanding violations or enforcement
orders.
E. 1. A surface rights owner shall be entitled, upon written
request, to receive from the operator and successor:
a. documentation of due diligence pursuant to subsection
D of this section,
b. known environmental or mechanical conditions that may
affect the surface or groundwater, and
c. financial assurance information of the operator or
successor submitted to the Commission.
2. A surface rights owner may, within thirty (30) days of
receiving notice of a proposed transfer or upon discovering a
violation of this section, file with the Commission:
a. a petition alleging inadequate due diligence,
b. a request to stay approval of the transfer until
deficiencies are corrected, or
c. a request for an administrative hearing regarding the
adequacy of the successor’s financial assurance.
3. A surface rights owner that is harmed by an operator’s or
successor’s failure to perform due diligence or misrepresentation
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related to a transfer may bring a civil action in district court for
injunctive relief, recovery of actual damages, including
contamination or surface restoration costs, and attorney fees and
court costs.
4. An operator or successor shall not take adverse action
against a surface rights owner for exercising rights pursuant to
this section. Retaliatory conduct shall be subject to penalties as
determined by the Commission.
F. 1. No transfer of operator status, well ownership, or
operating interest is effective unless approved by the Commission
after review of due-diligence submissions, surface-owner notices,
and financial assurance documents.
2. The transferring operator shall provide written notice to
all affected surface rights owners no later than thirty (30) days
before Commission consideration of a transfer.
3. Failure to provide notice invalidates the transfer and
constitutes a violation of this section.
4. The Commission may disapprove or stay any transfer if:
a. due-diligence requirements have not been met,
b. the successor lacks adequate financial assurance, or
c. a surface-owner petition pursuant to paragraph 2 of
subsection E of this section is pending and
nonfrivolous.
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5. If an unapproved transfer occurs, the successor and
transferring operator remain jointly and severally liable.
G. 1. Nothing in this section shall be construed to limit the
state’s rights under fraudulent transfer law, environmental
statutes, or common-law doctrines of successor liability.
2. Nothing herein shall impair the priority of claims under
federal bankruptcy law; however, successor liability shall apply to
post-petition acquisitions or transactions approved by the
bankruptcy court.
SECTION 2. This act shall become effective November 1, 2026.
60-2-3083 CN 1/6/2026 9:29:52 AM