Financial Assurance P-5 Bonds With the Railroad Commission of Texas

Who needs to file a P-5 form?

Insurance for drilling companies

The Railroad Commission has jurisdiction over all of the following operations:

      • Drilling, operating, or producing any oil, gas, geothermal resource, brine mining injection, fluid injection, or oil and gas waste disposal well;
      • Transporting, reclaiming, treating, processing, or refining crude oil, gas, and products, or geothermal resources and associated minerals;
      • Discharging, storing, handling, transporting, reclaiming, or disposing of oil and gas waste, including hauling saltwater for hire by any method other than a pipeline;
      • Operating gasoline plants, natural gas or natural gas liquids processing plants, pressure maintenance or re-pressurizing plants, or recycling plants;
      • Recovering skim oil from a saltwater disposal site;
      • Nominating crude oil;
      • Operating a directional survey company;
      • Cleaning a reserve pit;
      • Operating a pipeline;
      • Operating as a cementer approved for plugging wells, operating as a cementer cementing casing strings or liners, or operating a well service company performing well stimulation activities, including hydraulic fracturing;
      • Operating an underground hydrocarbon or natural gas storage facility;
      • Gas and/or liquids company; or
      • Master metered properties.

Any organization performing operations within the jurisdiction of the Railroad Commission of Texas (Commission) is required to maintain a current Form P-5, Organization Report

Other operations may still fall under the RRC jurisdiction, please check with the RRC , if your company’s operations is not on the list above.

If your company’s operations are regulated by the Railroad Commission (RRC) of Texas, it will need to provide financial assurance to the RRC in order to operate in TX, according to Statewide Rule 78.

Financial Assurance P-5 Bonds can free up cash.

financial assurance p-5 bonds

In accordance with Statewide Rule 78, most Commission regulated activities, including the operation of wells and pipelines, require an organization to file and maintain some form of financial assurance in varying amounts.

Acceptable Forms of Financial Assurance

      1. Option 1 (Available only to operators with no activity other than the operation of wells.)
          • Form P-5PB(1), Letter of Credit (Form P-5LC), or Cash Deposit
          • Amount is determined by multiplying the aggregate depth of all wells (active, inactive, injection, producer, etc.) at $2 per foot
      2. Option 2 (Available to All Operators) – Form P-5PB(2), Letter of Credit (Form P-5LC), or Cash Deposit. Amount determined by the total number of wells (active, inactive, injection, producer, etc.)
          • No wells – $25,000
          • 1 to 10 wells – $25,000
          • 11 to 99 wells – $50,000
          • 100 wells are more – $250,000
      3. Cash Deposit (Cashier’s Check Only)
          • Can be filed under either Financial Security Option 1 or Option 2
          • Cash deposits are automatically renewed once an operator submits their Form P-5 renewal packet and filing fee
          • No fee required to renew cash deposit annually
          • Interest earned on cash deposits is allocated to the Oil and Gas Cleanup Fund (See TNRC §81.067)

Watch this informative video from the Texas Railroad Commission about P-5 forms

Financial assurance P-5 bonds -we can assist

We can take your application for a financial assurance bond required by the RRC, if a cash deposit is not possible or to free up cash for your business.

Request a surety specialist to give you a call. Or call us at 832-592-1114