acres or portion thereof for which access is sought for seismic activities and not less than $1,000 for each additional 1,000 acres or portion thereof for which access is sought for seismic activities. For the purpose of assuring compliance with this minimum bonding requirement, the Commission may pool parcels of land of different surface owners where no single parcel exceeds 40 acres. At the request of the operator, after attempted consultation with the surface owner the Commission may establish a blanket bond or other guaranty in an amount covering oil and gas operations on the surface owner’s land, provided the blanket bond shall be in an amount not less than $10,000 per well site. The Commission shall notify the surface owner of receipt of the surety bond or other guaranty, or the establishment of a blanket bond or other guaranty based on the operator’s request. The surface owner has 30 days to object to the bond. If, at the expiration of 30 days after receipt of the Commission’s notice, the surface owner does not make an objection to the amount or the type of surety bond or guaranty, the Commission shall approve the surety bond or guaranty. The Act specifically provides that neither the minimum amount of the bond or other guaranty specified or referenced in the Act nor a blanket bond or other guaranty established by the Commission is intended to establish any amount for reasonable and foreseeable damages. The Commission shall not accept a surety bond for seismic activities for lands upon which the operator or seismic activity operator has no right to enter. The operator shall provide evidence of the right to enter derived from one or more mineral interest owners.
compensation has been received, (ii) an agreement for release has been entered into with the operator, or (iii) the surface owner has failed to give the written notice required (see Remedies below) or failed to bring a timely action for damages. The Commission may , in its sole discretion, release any surety bond, other guaranty or blanket bond related to particular lands if the operator shows just cause for the release. See WY Stat § 30-5-404(f). The Act requires the Commission to release a surety bond or other guaranty after: (i) compensation for damages has been paid to the surface owner(s); (ii) an agreement for release has been executed by all parties; (iii) final resolution of the judicial appeal process for any action for damages has occurred and all damages have been paid; or (iv) the operator has certified in a sworn statement that the surface owner has failed to give the written notice required under WY Stat § 30-5-406(a) or has failed to bring an action for damages within the required time period. See WY Stat § 30-5-404(e).
Surface Damage and Disruption Payments; Remedies
Payments and Late Payment Penalty
The Act requires the surface owner and the operator to agree on a surface damage payment to be paid by the operator. The amount shall equal the damages sustained by the surface owner for loss of production and income, loss of land value, and loss of value of the surface improvements caused by the oil and gas operations. The Act prohibits the severance of the right to receive surface damage payments from the surface estate. See WY Stat § 30- 5-405(a). An operator who fails to timely pay an installment under any annual damage agreement negotiated with a surface owner is liable to the surface owner for twice the amount of the unpaid installment if the installment payment is not paid within 60 days of receipt of notice of failure to pay from the surface owner. See WY Stat § 30-5-405(b).
Release
The Commission authorizes the release of any surety bond or other guaranty. Prior to the release of any applicable bond or other guaranty, the Commission must make a reasonable effort to contact the surface owner and confirm that either: (i)
Remedies
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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