R649-13-6. Replacement of Performance Bonds

(1) The division may allow an operator to replace existing performance bonds with other performance bonds that provide sufficient coverage. (2) The division shall not release an existing performance bond until the operator has furnished, and the division has approved, an acceptable replacement performance bond. (3) Replacement of a performance bond pursuant to this Subsection shall not constitute a release of bond under Section R649-13-7. (4) Bond Replacement Due to Change of Operator. (a) No later than 30 days after receipt of a complete Form 16 Operator Change Form, pursuant to Section R649-8-18, the division will provide the current and proposed operator with a determination of the proposed operator's performance bond requirements. (b) In the event the division determines that the new operator's bond coverage will be insufficient to cover the costs of plugging and site restoration for the well or wells assigned, the division will provide a written explanation justifying the bond adjustment. After receipt and approval of a plan to remedy the bond inadequacy the division may grant the new operator up to 12 months to remedy the bond inadequacy. (c) The current operator's bond shall not be released until the proposed operator provides adequate replacement bonding. (d) When the division has approved the termination of liability under a bond, the current operator is relieved from the responsibility of plugging or repairing any wells and restoring any well site affected by the operator change.