Texas Railroad Commission · Statewide Rule 78 · Form P-5

P-5 Bonds: Financial Assurance for the Texas Railroad Commission

Every operator that files a Form P-5 Organization Report with the Railroad Commission of Texas must also keep financial assurance on file. A P-5 performance bond meets that requirement without tying up your cash, so you can keep operating, permitting and renewing on schedule.

$25,000Blanket bond, up to 10 wells

$2 / ftIndividual bond, Option 1

Bond · LC · CashAccepted instruments

FreeBond amount estimate below

Request a Proposal Call (832) 592-1114

In short: Under Statewide Rule 78 (16 TAC §3.78), most organizations that file a Form P-5 with the Railroad Commission of Texas must file financial assurance: a performance bond (Form P-5PB), a letter of credit (Form P-5LC) or a cash deposit. Well operators can choose Option 1, $2 per foot of total well depth, or Option 2, a blanket amount of $25,000 for up to 10 wells, $50,000 for 11 to 99 wells, or $250,000 for 100 or more. Nolasko Insurance Advisors in The Woodlands, Texas, places P-5 bonds with Texas-licensed sureties.

Who Must File

Who Needs a Form P-5 and Financial Assurance?

Any organization performing operations within the Railroad Commission’s jurisdiction must keep a current Form P-5 Organization Report. That includes:

Permitting, drilling, operating or producing an oil, gas, geothermal, brine mining, injection or disposal well
Transporting, reclaiming, treating, processing or refining crude oil, gas, products or geothermal resources
Storing, handling, transporting, reclaiming or disposing of oil and gas waste, including hauling saltwater for hire
Operating gasoline, gas processing, NGL, pressure maintenance, repressurizing or recycling plants
Recovering skim oil from a saltwater disposal site
Nominating crude oil or natural gas
Operating a directional survey company
Cleaning a reserve pit
Operating a pipeline
Cementing for well plugging, cementing casing or liners, or well stimulation, including hydraulic fracturing
Operating an underground hydrocarbon or natural gas storage facility
Purchasing gas, and operating master meter or gas distribution systems

Filing a P-5 doesn’t always mean posting financial assurance. If your only activity is first purchaser, gas purchaser or nominator, directional survey, saltwater hauling, well plugging, plugging cementer, well stimulation or a master meter system, the RRC generally doesn’t require financial security. If you’re unsure, check with the RRC P-5 Unit or call us.

Statewide Rule 78

How Much Financial Assurance You Need

Well operators choose the option that costs less. Operators with any non-well activity that requires security must use Option 2.

Option 1 · Individual

Wells Only

For operators whose only Commission-regulated activity is operating wells.

$2.00 per foot

Multiplied by the total depth of every well on your proration schedule: active, inactive, injection, disposal and storage. If you have no scheduled wells, permitted depth is used. Adding wells mid-year can require a higher bond.

Option 2 · Blanket

All Operations

Covers wells and every other regulated operation under one instrument.

No wells (non-well operations only)	$25,000
1 to 10 wells	$25,000
11 to 99 wells	$50,000
100 or more wells	$250,000

New wells added during the year are covered automatically while your count stays in the same tier.

Bay and offshore wells carry additional entry-level and non-producing well amounts, based on presumed plugging costs of $60,000 per bay well and $100,000 per offshore well. Commercial facilities may require additional financial assurance. Wells covered by a qualifying well-specific plugging insurance policy are excluded from the calculation.

Free Estimate

Estimate Your P-5 Bond Amount

Enter your numbers to compare Option 1 and Option 2. Your exact well count and total depth are on the Options Fact Sheet in your RRC renewal packet.

Number of wells on your schedule Total depth of all wells (feet) Any regulated non-well operations? (pipeline, waste, plant, etc.)

Option 1: $2 per foot–

Option 2: Blanket–

–

Estimate only. The RRC sets your final requirement. Bay and offshore wells and commercial facilities need additional security.

Your Choices

Bond, Letter of Credit or Cash Deposit

Performance Bond

Form P-5PB

Issued by a surety licensed with the Texas Department of Insurance
You pay an annual premium, not the full bond amount
Keeps your cash and credit lines working in the business
One form since the RRC consolidated P-5PB(1) and P-5PB(2)

Letter of Credit

Form P-5LC

Issued by your bank on the RRC’s current form
Usually ties up borrowing capacity for the full amount
Expires 90 days after your P-5 expiration and must be renewed
Effective date must be the current date when filed

Cash Deposit

Cashier’s check or wire

Accepted under Option 1 or Option 2
Renews automatically with your P-5 renewal, with no renewal fee
Interest goes to the Oil and Gas Cleanup Fund, not to you
Your cash stays locked up for as long as you operate

Why a Bond

Free Up Cash Sitting With the State

A $250,000 cash deposit earns you nothing and can’t be used in the field. A P-5 bond satisfies the same requirement for an annual premium, so that capital can go back into drilling, workovers, equipment or payroll. If you’ve already posted cash, we can help you replace it with a bond and request the release of your deposit.

Replace My Cash Deposit

Deadlines & Requirements

Timing, Signatures and RRC Fees

Renewal packets are mailed about 85 days before your P-5 expiration date. File by the date printed on the forms.
Drilling permits: financial security must be in place before the RRC will issue a permit to drill, recomplete or re-enter a well.
Well transfers: acquiring wells on Form P-4 can require new or increased security.
Bond term: bonds expire 150 days after the P-5 expiration date; letters of credit, 90 days after.
Original signatures: the RRC accepts only original, pen-to-paper signatures. No electronic or stamped signatures.
Current forms only: the RRC no longer accepts continuation certificates or amendments to older P-5PB and P-5LC versions.

RRC P-5 filing fee	Amount
New P-5 filing	$750
New master meter filing	$562.50
Annual renewal	From $562.50
Base fee before surcharge	$225 – $1,350
Rule 78 surcharge	150% of base fee

Example: an operator with 28 wells and a disposal permit pays $1,000 in base fees plus a $1,500 surcharge, $2,500 total. Fees are set by the RRC, separate from your bond premium.

What’s Changing

Texas Inactive Well Law (SB 1150)

Signed in 2025, SB 1150 tightens the rules for long-inactive wells, and the Railroad Commission is now writing rules to carry it out:

Starting September 1, 2027, wells inactive more than 15 years and completed more than 25 years ago must be plugged or returned to production, unless the RRC grants an extension.
Compliance plans let operators work through older inactive wells on an approved schedule ending September 1, 2040.
A new bonding option equal to the RRC’s plugging cost estimate gives operators another way to keep wells in compliance.
Well transfers now require the buying operator to certify its wells are in compliance.

If you carry inactive wells, now is the time to plan for added plugging security. We’ll update this page as the RRC finalizes its rules.

Free Downloads

Official Railroad Commission Documents

These open the RRC’s own copies, so you always get the Commission’s current version.

PDF

P-5 Financial Assurance InstructionsBonds, letters of credit and cash deposits: options, amounts and filing rules

PDF

P-5 Forms & Financial Assurance GuideRRC training guide: fees, options, exemptions and common filing errors

PDF

Form P-5PB Performance BondCurrent consolidated bond form (fillable)

PDF

Form P-5 Organization ReportFillable organization report

Watch

Railroad Commission Video: Filing Your Form P-5

Getting Your Bond

What We’ll Need

Your RRC operator (P-5) number and current P-5 expiration date
Options Fact Sheet or your well count and total depth
Operations you perform beyond operating wells
Company and owner information for the surety’s credit review
Financial statements for larger bonds or newer companies
A signed general indemnity agreement with the surety

Why Nolasko

Bonds From People Who Know the RRC

Most standard P-5 bonds are quoted quickly once we have your fact sheet
Bonds issued on the RRC’s current P-5PB form, with original signatures
Help replacing cash deposits and letters of credit
Coordinated with your oilfield insurance through our EnergyGuard program
Based in The Woodlands, serving operators statewide

FAQs

P-5 Bond Questions

How much does a P-5 bond cost?

You pay an annual premium, not the full bond amount. Operators with good credit often pay about 1% to 3% of the bond amount per year, so a $25,000 bond may cost a few hundred dollars. Newer companies or weaker credit can pay more. We shop several sureties to get you the best rate.

What is the minimum P-5 financial assurance amount?

Most operators need at least $25,000. Under Option 2, operators with up to 10 wells (or no wells) post $25,000, 11 to 99 wells $50,000, and 100 or more wells $250,000. Option 1 ($2 per foot of total well depth) can be lower for operators with only a few shallow wells.

Can I use Option 1 if I also run a pipeline or disposal well?

No. Option 1 is available only to operators whose sole activity is operating wells. If you have other regulated operations, Option 2 applies, and the RRC requires the greater amount when you have both wells and other operations.

Are my old P-5PB(1) or P-5PB(2) bonds still valid?

The RRC consolidated those forms into a single Form P-5PB and no longer accepts continuation certificates or amendments on the older versions. If your bond is on an old form, it needs to be replaced with a new P-5PB at renewal. We can handle that for you.

Can I replace my cash deposit with a bond?

Yes. Once a P-5PB bond is filed and accepted, you can ask the RRC to release your cash deposit. Many operators do this to get that cash back into the business.

When is my P-5 renewal due?

The RRC mails renewal packets about 85 days before your P-5 expiration date. Your bond or letter of credit has to be renewed or replaced along with it. Late renewals can put your permits and wells at risk.

Who do I contact at the Railroad Commission?

The RRC P-5 Financial Assurance Unit can be reached at (512) 463-6772 or [email protected]. For the bond itself, call us at (832) 592-1114.

Get Your P-5 Bond Quote

Send us your Options Fact Sheet or your well count, and we’ll come back with your bond amount, premium and next steps. New filings, renewals and cash-deposit replacements.