Oil and Gas Bonding

Bonding requirements under 43 CFR 3104, which govern BLM’s oil and gas program, are changing as detailed in the Federal Register publication of the BLM’s final oil and gas leasing rule. The rule will be effective June 22, 2024. For bonds covering operations within the NPR-A, please refer to 43 CFR 3134. For bonds covering geophysical exploration, please refer to 43 CFR 3154. Major updates include:  

Elimination of nationwide and unit operator bonds 

After June 22, 2024, BLM will no longer accept new bonds that cover all federal leases nationwide or an entire unit. This means all existing nationwide and unit operator bonds must be replaced with statewide or individual lease bonds by June 22, 2025.   

  • These can start being replaced at any time. Before the period of liability can be terminated on the existing bond, replacement bonds require an assumption of liability rider. 

  • Operators with existing bonds may continue to operate and submit new APDs under the existing bond amount until June 22, 2025.  

Increased minimum bond amounts 

After June 22, 2024, BLM will not accept new bonds lower than the new minimum bond amounts. There are phase-in dates for existing statewide and individual bonds that are lower than the new minimum levels. 

  • The minimum statewide bond amount has increased to $500,000, while the minimum individual lease bond amount has increased to $150,000.  

  • To meet the phase-in for existing statewide bonds, all existing statewide bonds lower than $500,000 must be increased to $500,000 by June 22, 2026.  

  • To meet the phase-in for existing individual lease bonds, all existing individual lease bonds lower than $150,000 must be increased to $150,000 by June 22, 2027.  

  • Operators may begin increasing their bonds at any time through a bond increase rider or a replacement bond with an assumption of liability rider. 

  • Operators with existing bonds may continue to operate and submit new APDs under the existing bond amount until the respective phase-in date. 

BLM determined these bond amounts based upon both inflation and the cost to plug a well and reclaim the surface for the median number of wells tied to bonds. The average taxpayer cost to plug a well and reclaim the surface is $71,000. BLM will adjust the minimum bond amounts based upon inflation every ten years.  

Bond guarantees

An operator (or lessee/operating rights owner) can provide a surety bond or a personal bond.  

Surety Bonds  

The surety for any federal bond must be approved by the Department of Treasury as an acceptable surety. A list of acceptable sureties, Circular 570, can be obtained from the Bureau of the Fiscal Service of the Department of the Treasury.  

The original copy of the surety bond must be filed in the proper BLM state office on a form approved by BLM along with a power of attorney for the person signing on the behalf of the surety.   

Personal Bonds   

The power of attorney to authorize use of the funds, in case of default, is incorporated within the terms of Bond Form 3000-4, which should be filed in the proper BLM office along with the amount required for the bond. Personal bonds may be backed by the following:  

  • Cashier's check, 

  • Certified check,  

  • Negotiable Treasury security,  

  • Letter of credit, or 

  • Certificate of deposit payable to the Department of the Interior. 

Certain requirements apply to each of these instruments. Please consult with your BLM office before executing one of these options.

Oil and gas leasing regulations (43 CFR Parts 3000, 3100, and 3120) require, prior to commencement of surface disturbing activities related to drilling operations on a federal oil and gas lease, the operator on the ground shall be covered by a bond. A surety or personal bond may be posted by the lessee, sublessee (owner of operating rights) or operator. Use of the current Bond Form 3000-4, Oil and Gas or Geothermal Lease Bond, approved by the Director, is mandatory and can be found on BLM's electronic forms page.

Contact your local BLM office about where to file your bonds.