Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 349.120 353.550, 353.735-353.747
NECESSITY, FUNCTION, AND CONFORMITY: KRS 353.540 authorizes the
department to promulgate administrative regulations to administer KRS 353.500
to 353.720. KRS 353.570 requires a person to obtain a permit prior to drilling,
deepening, or reopening a well. KRS 353.590 requires a bond be posted with a
permit application. KRS 349.040 requires a person to obtain a permit prior to
drilling, deepening, converting, or reopening a well. KRS 349.120 requires a
bond be posted with a permit application for coalbed methane wells. KRS 353.745
authorizes the Division of Oil and Gas to charge a fee, not to exceed fifty
(50) dollars, to provide funds to meet the requirements of KRS 353.735 to
353.747. This administrative regulation provides general information concerning
the submittal of permit application, bond submittal, directional and
inclination surveys, and establishes the fee and details to whom the fee
applies and the appropriate time for submittal.
Section 1.
(1) General Permit Application Requirements.
A person shall not drill, deepen, or reopen an oil or gas well without first
obtaining a permit from the division pursuant to KRS 353.570 or KRS 349.040.
Each person who intends to engage in oil and gas operations shall file with the
division a complete, accurate, and notarized Application for Permit, Form
OG-1.
(2) Application Review.
(a) The Department shall review the
Application for Permit, Form OG-1 for administrative and technical completeness
and compliance with:
1. 805 KAR Chapter 1 for
all wells; and
2. KRS Chapter 353
for production wells; or
3. KRS
Chapter 349 for coalbed methane wells.
(b) If the application is administratively or
technically incomplete, the division shall notify the applicant after review of
the application of the deficiencies that render the application
incomplete.
(c) The applicant shall
submit supplemental information to correct the identified deficiencies within
thirty (30) days after notification of the deficiencies.
(d) If, after thirty (30) days, the
application is still incomplete, the division may return the incomplete
application to the applicant with written notification of the reasons for the
determination.
(3)
Review of violations.
(a) After the
application has been determined to be administratively and technically
complete, the division shall perform a compliance review of the application and
the applicant pursuant to KRS 353.572. The division shall not approve an
application for permit if the application or the applicant is not in complete
compliance with KRS 353.572.
(b)
During the compliance review, the division shall review the readily available
compliance information related to the application and the applicant.
(c) The division shall notify the applicant
in writing if the application is not approved.
(4) Final Determination. Once the division
determines that the application is administratively and technically complete
and has not found compliance violations, a permit authorization shall be
issued.
(5) Bonding Requirements.
(a) As part of the permit application
required by subsection (1) of this section, the applicant shall submit a bond
in an amount required by KRS 353.590(7) for production wells or KRS 349.120 for
coalbed methane wells.
(b)
Operators that secure a surety bond to satisfy the requirements of this
subsection shall comply with the requirements of 805 KAR 1:050.
Section 2. Directional
and Inclination Surveys. The operator of a well drilled in an active mining
area or through a workable coal bed that is not in an active mining area shall
submit to the division the results of the directional or inclination survey
required by KRS 353.739(1) within thirty (30) days from the drilling of the
well.
Section 3. Fee Submittal.
(1) Each application for an oil or gas permit
shall be accompanied by a fee of fifty (50) dollars for each application for an
oil or gas permit in addition to the fee required in KRS 353.590(2) or KRS 349.040(3).
(2) All required fees
shall be submitted to the division in the form of a personal check, cashier's
check, or money order payable to the Kentucky State Treasurer. A permit
application shall not be processed unless the application fee has been
paid.
(3) All fees shall be for the
sole use of the Division of Oil and Gas in the administration of its programs
and shall be in addition to money appropriated by the General Assembly for the
use of the division.
Section
4. Recordkeeping. Within ninety (90) days of completion of the
drilling of a well, the operator shall file the "Affidavit of Well Log and
Completion Report, form OG-3.
Section
5. Testing Permits.
(1) An owner
or operator may investigate an abandoned oil or gas production well for the
purposes of testing after having submitted:
(a) A completed and notarized application
"Testing Permit Application" Form OG-42; and
(b) A twenty-five (25) dollar fee pursuant to
KRS 353.730.
(2) The
division shall approve a testing permit for a period of up to sixty (60) days.
If the well is not tested within the testing period, a new application and fee
shall be submitted.
(3) At the
conclusion of the testing period, the applicant shall submit a completed and
notarized "Report of Investigation for Testing Permit" Form OG-43 to the
division.
(a) If the applicant wishes to
assume ownership for the well, a bond shall be filed in accordance with KRS 353.590(7); or
(b) If the applicant
does not wish to assume ownership of the well, then the well shall be closed at
the surface with a valve or swedge assembly installed on the casing
head.
(4) All fees shall
be for the sole use of the Division of Oil and Gas in the administration of its
programs and shall be in addition to money appropriated by the General Assembly
for the use of the cabinet.
Section
6. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Application for Permit", Form
OG-1, June 2019;
(b) "Well log and
Completion Report", Form OG-3, October 2019;
(c) "Testing Permit Application", Form OG-42,
June 2019; and
(d) "Report of
Investigation for Testing Permit", Form OG-43, June 2019.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Division of Oil and
Gas, 300 Sower Boulevard, Frankfort, Kentucky 40601, Monday through Friday, 8
a.m. to 4:30 p.m., Eastern Prevailing Time.
STATUTORY AUTHORITY: KRS 349.040, 353.540, 353.570, 353.590,
353.745
