NMSA 1978, Section 70-2-14 requires every operator of an oil, gas, or service well to furnish financial assurance — a surety bond, irrevocable letter of credit, cash, or a well-specific plugging insurance policy — to the Oil Conservation Division, running to the benefit of the state and conditioned that the well be plugged and abandoned in compliance with OCD rules. One-well financial assurance is set in an amount determined to reasonably pay the cost of plugging the well, considering depth, time since production, the cost of plugging similar wells, and other factors. Confirm the amount the OCD set for your well.

What the plugging bond actually secures

You need this bond if you are

Your single well plugging bond application is in review — smaller amounts clear quickly, and an underwriter reaches out within 48 hours on larger plugging bonds. Watch your inbox.

New Mexico single well plugging bond: 4% of the bond amount plus a $25 fee, $125 minimum, required by the Oil Conservation Division under §70-2-14. Apply now.

Single Well Plugging Bond

Final premium can vary based on underwriting factors

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