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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
SENATE BILL 1419 By: Boren
AS INTRODUCED
An Act relating to oil and gas operations; amending
52 O.S. 2021, Sections 318.4 and 318.5, which relate
to damages; modifying scope of certain bond
requirements; updating statutory reference; updating
statutory language; requiring certain notice;
establishing notice criteria; requiring certain
information be provided to surface owners; permitting
certain petition; requiring the Corporation
Commission to provide timely hearings; stating
liability of successor operators; requiring certain
actions before termination; requiring certain test
and report; requiring the Corporation Commission to
conduct certain hearing; authorizing the Corporation
Commission to take certain actions; authorizing
certain injunction; prohibiting certain retaliation;
construing provision; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 52 O.S. 2021, Section 318.4, is
amended to read as follows:
Section 318.4. A. Every operator doing business in this state
shall file a corporate surety bond, letter of credit from a banking
institution, cash, or a certificate of deposit with the Secretary of
State in the sum of Twenty-five Thousand Dollars ($25,000.00)
conditioned upon compliance with Sections 318.2 through 318.9 of
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this title for payment of any location damages and anticipated
reclamation obligations due which the operator cannot otherwise pay.
The Secretary of State shall hold such corporate surety bond, letter
of credit from a banking institution, cash, or certificate of
deposit for the benefit of the surface owners of this state and
shall ensure that such security is in a form readily payable to a
surface owner awarded damages in an action brought pursuant to this
act section. Each corporate surety bond, letter of credit, cash, or
certificate of deposit filed with the Secretary of State shall be
accompanied by a filing fee of Ten Dollars ($10.00).
B. The bonding company or banking institution shall file, for
such fee as is provided for by law, a certificate that said such
bond or letter of credit is in effect or has been canceled, or that
a claim has been made against it in the office of the court clerk in
each county in which the operator is drilling or planning to drill.
Said Such bond or letter of credit must remain in full force and
effect as long as the operator continues drilling operations in this
state. Each such filing shall be accompanied by a filing fee of Ten
Dollars ($10.00).
C. Upon deposit of the bond, letter of credit, cash, or
certificate of deposit, the operator shall be permitted entry upon
the property and shall be permitted to commence drilling of a well
or reworking operations in accordance with the terms and conditions
of any lease or other existing contractual or lawful right.
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D. If the damages and reclamation obligations agreed to by the
parties or awarded by the court are greater than the bond, letter of
credit, cash, or certificate of deposit posted, the operator shall
pay the damages and reclamation obligations immediately or post an
additional bond, letter of credit, cash, or certificate of deposit
sufficient to cover the damages. Said Such increase in bond, letter
of credit, cash, or certificate of deposit shall comply with the
requirements of this section.
SECTION 2. AMENDATORY 52 O.S. 2021, Section 318.5, is
amended to read as follows:
Section 318.5. A. Prior to entering the site with heavy
equipment, the operator shall negotiate with the surface owner for
the payment of any damages and anticipated reclamation obligations
which may be caused by the drilling operation. If the parties
agree, and a written contract is signed, the operator may enter the
site to drill. If agreement is not reached, or if the operator is
not able to contact all parties, the operator shall petition the
district court in the county in which the drilling site is located
for appointment of appraisers to make recommendations to the parties
and to the court concerning the amount of damages and anticipated
reclamation obligations, if any. Once the operator has petitioned
for appointment of appraisers, the operator may enter the site to
drill.
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B. Ten (10) days’ notice of the petition to appoint appraisers
shall be given to the opposite party, either by personal service or
by leaving a copy thereof at the party’s usual place of residence
with some family member over fifteen (15) years of age, or, in the
case of nonresidents, unknown heirs or other persons whose
whereabouts cannot be ascertained, by publication in one issue of a
newspaper qualified to publish legal notices in said the county, as
provided in Section 106 of Title 25 of the Oklahoma Statutes, said
such ten-day period to begin with the first publication.
C. The operator shall select one appraiser, the surface owner
shall select one appraiser, and the two selected appraisers shall
select a third appraiser for appointment by the court, which such
third appraiser shall be a state-certified general real estate
appraiser and be in good standing with the Oklahoma Real Estate
Appraisal Appraiser Board. Unless for good cause shown, additional
time is allowed by the district court, the three (3) appraisers
shall be selected within twenty (20) days of service of the notice
of the petition to appoint appraisers or within twenty (20) days of
the first date of publication of the notice as specified in
subsection B of this section. If either of the parties fails to
appoint an appraiser or if the two appraisers cannot agree on the
selection of the third appraiser within the required time period,
the remaining required appraisers shall be selected by the district
court upon application of either party of which at least one shall
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be a state-certified general real estate appraiser and be in good
standing with the Oklahoma Real Estate Appraisal Appraiser Board.
Before entering upon their duties, such appraisers shall take and
subscribe an oath, before a notary public or some other person
authorized to administer oaths, that they will perform their duties
faithfully and impartially to the best of their ability. They shall
inspect the real property and consider the surface damages and
anticipated reclamation obligations which the owner has sustained or
will sustain by reason of entry upon the subject land and by reason
of drilling or maintenance of oil or gas production on the subject
tract of land. The appraisers shall then file a written report
within thirty (30) days of the date of their appointment with the
clerk of the court. The report shall set forth the quantity,
boundaries, and value of the property entered on or to be utilized
in said such oil or gas drilling, and the amount of surface damages
and reclamation done or to be done to the property. The appraisers
shall make a valuation and determine the amount of compensation to
be paid by the operator to the surface owner and the manner in which
the amount shall be paid. Said The appraisers shall then make a
report of their proceedings to the court. The compensation of the
appraisers shall be fixed and determined by the court. The operator
and the surface owner shall share equally in the payment of the
appraisers’ fees and court costs.
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D. Within ten (10) days after the report of the appraisers is
filed, the clerk of the court shall forward to each attorney of
record, each party, and interested party of record, a copy of the
report of the appraisers and a notice stating the time limits for
filing an exception or a demand for jury trial as provided for in
this section. The operator shall provide the clerk of the court
with the names and last-known addresses of the parties to whom the
notice and report shall be mailed, sufficient copies of the notice
and report to be mailed, and pre-addressed, postage-paid envelopes.
1. This notice shall be on a form prepared by the
Administrative Director of the Courts, approved by the Oklahoma
Supreme Court, and supplied to all district court clerks.
2. If a party has been served by publication, the clerk shall
forward a copy of the report of the appraisers and the notice of
time limits for filing either an exception or a demand for jury
trial to the last-known mailing address of each party, if any, and
shall cause a copy of the notice of time limits to be published in
one issue of a newspaper qualified to publish legal notices as
provided in Section 106 of Title 25 of the Oklahoma Statutes.
3. After issuing the notice provided herein, the clerk shall
endorse on the notice form filed in the case the date that a copy of
the report and the notice form was forwarded to each attorney of
record, each party, and each interested party of record, or the date
the notice was published.
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E. The time for filing an exception to the report or a demand
for jury trial shall be calculated as commencing from the date the
report of the appraisers is filed with the court. Upon failure of
the clerk to give notice within the time prescribed, the court, upon
application by any interested party, may extend the time for filing
an exception to the report or filing a demand for trial by jury for
a reasonable period of time not less than twenty (20) days from the
date the application is heard by the court. Appraisers’ Appraiser
fees and court costs may be the subject of an exception, may be
included in an action by the petitioner, and may be set and allowed
by the court.
F. The report of the appraisers may be reviewed by the court,
upon written exceptions filed with the court by either party within
thirty (30) days after the filing of the report. After the hearing
the court shall enter the appropriate order either by confirmation,
rejection, modification, or order of a new appraisal for good cause
shown. Provided, that in the event a new appraisal is ordered, the
operator shall have continuing right of entry subject to the
continuance of the bond required herein. Either party may, within
sixty (60) days after the filing of such report, file with the clerk
a written demand for a trial by jury, in which case the amount of
damages shall be assessed by a jury. The trial shall be conducted
and judgment entered in the same manner as railroad condemnation
actions tried in the court. A copy of the final judgment shall be
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forwarded to the county assessor in the county or counties in which
the property is located. If the party demanding the jury trial does
not recover a more favorable verdict than the assessment award of
the appraisers, all court costs including reasonable attorney fees
shall be assessed against the party.
SECTION 3. 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. In addition to all notices required by Section 318.3 of
Title 52 of the Oklahoma Statutes, an operator shall provide written
notice to the surface owner at least thirty (30) days before:
1. A transfer of operator;
2. Assignment of a lease or wellbore interest; or
3. Any transaction that changes control of a well, facility, or
associated equipment.
B. The notice shall include:
1. Names and addresses of the proposed successor;
2. A list of wells and facilities affected;
3. The date the transfer is proposed to be presented to the
Corporation Commission; and
4. A summary of due-diligence materials required pursuant to
Section 4 of this act.
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SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 318.12 of Title 52, unless there
is created a duplication in numbering, reads as follows:
A. Upon written request, the operator or proposed successor
shall provide to the surface owner:
1. Mechanical integrity reports and well-status documentation;
2. Environmental assessments, spill reports, and inspection
results;
3. Plugging and site-restoration cost estimates;
4. Financial assurance instruments submitted to the Corporation
Commission; and
5. Any documents required pursuant to Corporation Commission
rules for transfer approval.
B. Documents shall be delivered in electronic or paper format
within ten (10) business days.
C. Failure to provide disclosures shall constitute a violation
of this act.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 318.13 of Title 52, unless there
is created a duplication in numbering, reads as follows:
A. A surface owner has standing before the Corporation
Commission to request enforcement of this act.
B. A surface owner may file a petition alleging inadequate due
diligence, insufficient financial assurance, likelihood of
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abandonment, violation of notice or disclosure requirements, or
regulatory noncompliance.
C. Upon petition, the Commission may stay or suspend a
transfer, require additional bonding, order inspections or
remediation, impose civil penalties, or deny or condition approval.
D. The Commission shall provide timely hearings and full
participation rights to surface owners.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 318.14 of Title 52, unless there
is created a duplication in numbering, reads as follows:
A. Obligations pursuant to this act run with the well and bind
all successor operators.
B. Transfers that shift wells into undercapitalized or
nonoperational entities are presumed fraudulent and shall not
relieve the transferring operator of liability.
C. Successor operators are jointly and severally liable with
the transferor for violations involving inadequate due diligence,
false or misleading disclosures, insufficient financial assurance,
or lack of required approval or notice.
D. No operator may dissolve, withdraw, or terminate its
business entity in this state until certifying satisfaction of all
obligations pursuant to this act.
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SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 318.15 of Title 52, unless there
is created a duplication in numbering, reads as follows:
A. Before any hydraulic fracturing, acidizing, pressure
treatment, or reworking activity, the operator shall perform a
fracture-point or formation integrity test prior to any new
drilling, reworking, or stimulation activity to:
1. Determine the fracture initiation pressure of each zone at
which the formation will crack;
2. Determine safe pressure limits for the proposed treatment;
3. Confirm isolation of groundwater-bearing formations;
4. Determine operation risk on the groundwater, soil, or nearby
wells;
5. Prevent unintended fracture propagation;
6. Ensure casing, cement, and completion integrity; and
7. Ensure that the surface owner is fully informed of
activities affecting his or her property.
B. A report of results received from the test required pursuant
to subsection A of this section shall be filed no less than thirty
(30) days before any hydraulic fracturing or reworking begins under
oath with the Corporation Commission and shall also be provided to
the surface owner and all interest owners within the same time
frame. The report shall include the following:
1. Test results;
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2. The maximum pressure that will be used;
3. Any risks identified during testing; and
4. Steps the operator will take to prevent damage.
C. If the test indicates a risk of fracture propagation into
freshwater zones, producing horizons, or abandoned wells, the
Commission shall conduct a hearing to consider the following
remedies:
1. Revised stimulation plans;
2. Lower pressure limits;
3. Stimulation prohibition; or
4. Additional casing or cement remediation.
D. Inadequate or false testing shall constitute grounds for the
Commission to enforce civil penalties, denial or revocation of an
operator’s permit, or joint and several liability pursuant to
Section 6 of this act.
E. If an operator fails to conduct the test or exceeds the
tested pressure limits, the surface owner may seek an injunction to
stop the operation and the operator shall be liable for any
resulting damages. The Commission may halt the operation, impose
penalties, or deny further permits.
F. A surface owner who asks for or uses the information from
the fracture-point test shall not be harassed, pressured, or
retaliated against by the operator. Any retaliation constitutes
actionable damages.
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G. This section shall be liberally construed to protect surface
owners, water supplies, agricultural land, rural communities, and
responsible operators.
SECTION 8. This act shall become effective November 1, 2026.
60-2-3086 CN 1/6/2026 9:33:59 AM