Oklahoma has long been considered the final frontier for small- to medium-sized oil and gas operators. The state's business-friendly regulatory atmosphere and abundance of development opportunities have created fertile ground for operators of all sizes.
However, for many years the bonding requirements set by the Oklahoma Corporation Commission (OCC) have allowed operators to take on more well liabilities than their financial resources should reasonably support. This gap has contributed significantly to the state's orphan well problem, as insufficient bonding and limited enforcement left taxpayers to shoulder the burden when operators walked away.
That is about to change. Beginning November 1, 2025, new legislation will substantially tighten bonding requirements for new operators managing more than ten wells. While existing operators in good standing can continue under the current $25,000 Category A surety regardless of well count, new operators will face stricter financial thresholds.
What House Bill 1369 Means for Operators
House Bill No. 1369 amends Section 318.1 of Title 52 of the Oklahoma Statutes, which governs financial requirements for oil and gas operators. Key provisions include:
- Phase-out of Category A surety: Starting November 1, 2025, new operators will no longer be eligible for Category A surety. Current operators in good standing may retain it.
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Tiered Category B surety for new operators:
- $25,000 for 1–10 wells
- $50,000 for 11–50 wells
- $100,000 for 51–100 wells
- $150,000 for more than 100 wells
- Compliance enforcement: Operators with outstanding fines or contempt citations must post Category B surety. The OCC may also increase bonding amounts up to the $150,000 maximum based on an operator’s compliance record.
- Forfeiture provisions: Bonds may be forfeited in cases of noncompliance, ensuring accountability for plugging and abandonment obligations as well as closure of surface impoundments.
Why This Matters
The goal of HB 1369 is clear: strengthen Oklahoma’s safeguards against orphan wells while protecting the state and taxpayers from avoidable liabilities. By aligning bonding requirements more closely with operational scale, the state is setting a higher bar for financial responsibility and long-term stewardship.
For operators, this shift means that thoughtful planning, financial preparedness, and compliance history will weigh more heavily than ever when expanding well counts. While it introduces new hurdles for emerging operators, the legislation ultimately aims to stabilize the regulatory environment and reduce risks for all stakeholders in Oklahoma’s energy industry.
