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Notices to Industry, Publications and Statewide Rules

New Procedure for Approving Form P-4 for a Change of Operators for Inactive Wells

Effective immediately, when a P-4, Producer’s Transportation Authority and Certificate of Compliance, is submitted to change operators of a lease containing one or more inactive wells subject to Statewide Rule 14(b)(2) on plugging, Commission staff will check to see that the new operator has on file with the Commission a financial assurance capable of covering the subject wells. If there is insufficient financial assurance on file, both operators will be notified that the P-4 will be held until adequate financial assurance is submitted.

If the new operator has a bond or letter of credit filed as the financial assurance required with the P-5, Organization Report, no additional financial assurance is required for the P-4 change of operator to be processed.

If the new operator does not have a P-5 bond or letter of credit financial assurance, a Form W-1X, Application for Future Re-Entry of Inactive Well Bore and 14(b)(c) Extension Permit, with a $100 fee for each subject inactive well on the lease may be filed with the P-4. If not filed with the P-4, the P-4 change of operator will be held until the Form W-1X with appropriate fees is received. Wells subject to 14(b)(2) may also be brought into compliance for administrative purposes by filing a recent well test (forms W-10 or G-10 retest) or by providing proof of plugging (Form W-3).

Please contact the P-5 unit with any questions you may have concerning the Form W-1X at 512-463-6772. Should you require information concerning the Form P-4, please contact the proration unit at 512-463-6838.

Austin, Texas
August 1998