(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
1
st 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.
(d) Before any person shall commence the
drilling of a stratigraphic test or any well below the freshwater level (other
than an oil or gas well or an injection well), such person shall file in
duplicate with the Board on Form 2 his application for permit to drill,
accompanied by a fee of six hundred dollars ($600), payable to the State Oil
and Gas Board. 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. If drilling operations have not commenced within twelve (12)
months after date of issuance, the permit shall become void.
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 the disallowance.
(e) Before any person shall commence the
drilling of, or conversion to, an injection well, such person shall file in
duplicate with the Board on Form 2 his application for permit to drill,
accompanied by a fee of six hundred dollars ($600), payable to the State Oil
and Gas Board. If the application complies in all respects with the rules and
regulations of the Board relating thereto, a permit shall be issued by the
Supervisor upon approval by the State Oil and Gas Board, after notice and
hearing. If drilling operations have not commenced within twelve (12) months
after date of issuance, the permit shall become void.
(f) Before any person shall commence
operations to reenter an abandoned well or to convert it to an injection well,
such person shall file in duplicate with the Board on Form 2 his application to
rework, accompanied by a fee of six hundred dollars ($600), payable to the
State Oil and Gas Board. If the application complies in all respects with the
rules and regulations of the Board relating thereto, a permit shall be issued
by the Supervisor upon approval by the State Oil and Gas Board, after notice
and hearing. If work over operations have not commenced within twelve (12)
months after date of issuance, the permit shall become void.
(g) Before any person shall commence
operations to rework an operating well or injection well to recomplete to
another zone, formation or reservoir, such person shall file in duplicate with
the Board on Form 2 his application to rework, accompanied by a fee of one
hundred dollars ($100), payable to the State Oil and Gas Board. If the
application complies in all respects with the rules and regulations of the
Board relating thereto, a permit shall be issued by the Supervisor. If workover
operations have not commenced within six (6) months after date of issuance, the
permit shall become void.
