Oil and gas; authorizing certain operators to make voluntary election. Emergency.

An Act
ENROLLED SENATE
BILL NO. 1976 By: Green of the Senate

and

Boles of the House

An Act relating to oil and gas; amending 52 O.S.
2021, Section 318.1, as amended by Section 1, Chapter
24, O.S.L. 2025 (52 O.S. Supp. 2025, Section 318.1),
which relates to agreement as to compliance with
drilling and plugging regulations; authorizing
certain operators to make voluntary election;
requiring certain notice; authorizing retention of
certain right; requiring certain permanence beyond
expiration; requiring operators to post surety by
certain date; updating statutory language; and
declaring an emergency.

SUBJECT: Oil and gas surety elections

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. AMENDATORY 52 O.S. 2021, Section 318.1, as
amended by Section 1, Chapter 24, O.S.L. 2025 (52 O.S. Supp. 2025,
Section 318.1), is amended to read as follows:

Section 318.1. A. Any person who drills or operates any well
for the exploration, development, or production of oil or gas, or as
an injection or disposal well, within this state, shall furnish in
writing, on forms approved by the Corporation Commission, his or her
agreement to drill, operate, and plug wells in compliance with the
rules of the Commission and the laws of this state, together with
evidence of financial ability to comply with the requirements for
plugging, closure of surface impoundments, removal of trash and

ENR. S. B. NO. 1976 Page 2
equipment as established by the rules of the Commission and by law.
To establish evidence of financial ability, the Commission shall
require:

1. Category A surety, which shall include a financial statement
listing assets and liabilities, and including a general release that
the information may be verified with banks and other financial
institutions. The statement shall prove a net worth of not less
than Fifty Thousand Dollars ($50,000.00). Category A surety will no
longer be accepted as valid form of surety for new operators to
select beginning November 1, 2025. All current operators who have
valid Category A surety and are in good standing with the Commission
will be able to retain their Category A surety for the time they are
a valid operator in the State of Oklahoma this state. Any operator
eligible to maintain Category A surety may voluntarily elect to
convert to Category B surety upon written notice to the Commission.
An operator making such election shall retain the right to revert to
Category A surety without penalty or additional qualification
requirements, provided the operator submits written notice of
reversion within three (3) years of the effective date of the
election and remains in good standing with the Commission. Upon
expiration of the three-year period, the operator shall be
permanently subject to Category B surety requirements; or

2. Category B surety, which shall include an irrevocable
commercial letter of credit, cash, a cashier’s check, a Certificate
certificate of Deposit deposit, other negotiable instrument, or a
blanket surety bond. Except as provided in paragraph 1 of
subsection B or subsection C of this section, the amount of such
letter of credit, cash, cashier’s check, certificate, bond, receipt,
or other negotiable instrument shall be based on the number of wells
that the person operates and shall have the option of using the
phase-in schedule as follows:

a. for one to ten wells, Twenty-five Thousand Dollars
($25,000.00),

b. for eleven to fifty wells, operators shall post
Category B surety in the amount of Thirty-three
Thousand Three Hundred Dollars ($33,300.00) no later
than the due date of the operator’s Form 1006B
occurring during the calendar year 2026; on the due

ENR. S. B. NO. 1976 Page 3
date of the operator’s Form 1006B for the year 2027,
operators shall post Category B surety in the amount
of Forty-one Thousand Six Hundred Dollars
($41,600.00); on the due date of the operator’s Form
1006B for the year 2028, operators shall post Category
B surety in the full amount of Fifty Thousand Dollars
($50,000.00),

c. for fifty-one to one hundred wells, operators shall
post Category B surety in the amount of Fifty Thousand
Dollars ($50,000.00) no later than the due date of the
operator’s Form 1006B occurring during the calendar
year 2026; on the due date of the operator’s Form
1006B for the year 2027, operators shall post Category
B surety in the amount of Seventy-five Thousand
Dollars ($75,000.00); on the due date of the
operator’s Form 1006B for the year 2028, operators
shall post Category B surety in the full amount of One
Hundred Thousand Dollars ($100,000.00), and

d. for more than one hundred wells, operators shall post
Category B surety in the amount of Sixty-six Thousand
Five Hundred Dollars ($66,500.00) no later than the
due date of the operator’s Form 1006B occurring during
the calendar year 2026; on the due date of the
operator’s Form 1006B for the year 2027, operators
shall post Category B surety in the amount of One
Hundred Eight Thousand Dollars ($108,000.00); on the
due date of the operator’s Form 1006B for the year
2028, operators shall post Category B surety in the
full amount of One Hundred Fifty Thousand Dollars
($150,000.00).

By the end of the year in 2028, all Category B operators shall be
required to post surety in the full amounts specified in paragraph 2
of this subsection, based upon the number of wells operated. The
Commission is authorized to determine a higher amount of Category B
surety based upon the past performance of the operator and its
insiders and affiliates regarding compliance with the laws of this
state, and any rules promulgated thereto including, but not limited
to, the drilling, operation, and plugging of wells, closure of
surface impoundments, or removal of trash and equipment, provided

ENR. S. B. NO. 1976 Page 4
that such higher amount shall not exceed One Hundred Fifty Thousand
Dollars ($150,000.00). Any instrument shall constitute an
unconditional promise to pay and be in a form negotiable by the
Commission.

B. 1. The Commission upon certification by any operator
subject to Category B surety that its plugging liability statewide
is less than the amount based on the number of wells operated as
specified in this section may allow said the operator to provide
Category B type surety in an amount less than the amount required by
this section, but at least sufficient to cover the estimated cost of
all plugging, closure, and removal operations currently the
responsibility of that operator. The liability certification
referred to in this subsection shall take the form of an affidavit
from a licensed well plugger estimating the costs of all plugging,
closure, and removal operations of the operator requesting such
relief. This alternative amount shall be modified upward upon the
assumption of additional operations by such operator, the maximum
amount of Category B surety to be posted not to exceed One Hundred
Fifty Thousand Dollars ($150,000.00).

2. New operators, operators who have outstanding fines or
contempt citations, and operators whose insiders or affiliates have
outstanding contempt citations or fines as of June 7, 1989, shall be
required to post Category B surety.

3. Operators using Category A surety who are assessed a fine of
Two Thousand Dollars ($2,000.00) or more and who do not pay the fine
within the specified time shall be required to post a Category B
surety within thirty (30) days of notification by the Commission.

C. For good cause shown concerning pollution or improper
plugging of wells by the operator posting either Category A or B
surety or by an insider or affiliate of such operator, the
Commission, upon application of the Director of the Oil and Gas
Conservation Division, after notice and hearing, may require the
filing of additional Category B surety in an amount greater than
Twenty-five Thousand Dollars ($25,000.00) but not to exceed One
Hundred Fifty Thousand Dollars ($150,000.00).

D. If the Commission determines that a blanket surety bond is
required, the bond shall be conditioned on the fact that the

ENR. S. B. NO. 1976 Page 5
operator shall cause the wells to be plugged and abandoned surface
impoundments to be closed, and trash and equipment to be removed in
accordance with the laws of this state and the rules of the
Commission. Each bond shall be executed by a corporate surety
authorized to do business in this state and shall be renewed and
continued in effect until the conditions have been met or release of
the bond is authorized by the Commission.

E. The agreement provided for in subsection A of this section
shall provide that if the Commission determines that the person
furnishing the agreement has neglected, failed, or refused to plug
and abandon, or cause to be plugged and abandoned, or replug any
well or has neglected, failed, or refused to close any surface
impoundment or removed or cause to be removed trash and equipment in
compliance with the rules of the Commission, then the person shall
forfeit from his or her bond, letter of credit, or negotiable
instrument or shall pay to this state, through the Commission, for
deposit in the State Treasury, a sum equal to the cost of plugging
the well, closure of any surface impoundment or removal of trash and
equipment. The Commission may cause the remedial work to be done,
issuing a warrant in payment of the cost thereof drawn against the
monies accruing in the State Treasury from the forfeiture or
payment. Any monies accruing in the State Treasury by reason of a
determination that there has been a noncompliance with the
provisions of the agreement or the rules of the Commission, in
excess of the cost of remedial action ordered by the Commission,
shall be credited to the Oil and Gas Division Revolving Fund. The
Commission shall also recover any costs arising from litigation to
enforce this provision. Provided, before a person is required to
forfeit or pay any monies to the state pursuant to this section, the
Commission shall notify the person at his or her last-known last
known address of the determination of neglect, failure, or refusal
to plug or replug any well, or close any surface impoundment or
remove trash and equipment and said the person shall have ten (10)
days from the date of notification within which to commence remedial
operations. Failure to commence remedial operations shall result in
forfeiture or payment as provided in this subsection.

F. It shall be unlawful for any person to drill or operate any
oil or gas well subject to the provisions of this section, without
the evidence of financial ability required by this section. The
Commission shall shut in, without notice, hearing, or order of the

ENR. S. B. NO. 1976 Page 6
Commission, the wells of any such person violating the provisions of
this subsection and such wells shall remain shut in for
noncompliance until the required evidence of Category B surety is
obtained and verified by the Commission.

G. If title to property or a well is transferred, the
transferee shall furnish the evidence of financial ability to plug
the well and close surface impoundments required by the provisions
of this section, prior to the transfer.

H. As used in this section:

1. “Affiliate” means an entity that owns twenty percent (20%)
or more of the operator, or an entity of which twenty percent (20%)
or more is owned by the operator; and

2. “Insider” means officer, director, or person in control of
the operator; general partners of or in the operator; general or
limited partnership in which the operator is a general partner;
spouse of an officer, director, or person in control of the
operator; spouse of a general partner of or in the operator;
corporation of which the operator is a director, officer, or person
in control; affiliate, or insider of an affiliate as if such
affiliate were the operator; or managing agent of the operator.

SECTION 2. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.

ENR. S. B. NO. 1976 Page 7
Passed the Senate the 16th day of March, 2026.

Presiding Officer of the Senate

Passed the House of Representatives the 29th day of April, 2026.

Presiding Officer of the House
of Representatives

OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.

_________________________________
Governor of the State of Oklahoma

OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________