Department of Environmental Conservation

D E C banner

Financial Security

Per 6 NYCRR 551.4, all owners of regulated wells are required to secure and maintain appropriate financial security payable to DEC. Financial security is required to guarantee the performance of well plugging and abandonment per 6 NYCRR 555. Acceptable financial security instruments are as surety bonds, irrevolcable bank letters of credit, assignments of certificates of deposit, and cash or check. In the event of cancellation, non-renewal, or termination of financial security, the registered well operator is responsible for providing replacement financial security to prevent department action to call the proceeds of the surety instrument.

Financial Security Form Templates

Use the Financial Security Worksheet (PDF) (196 KB) or the Regulated Well Financial Security Calculator below to determine the amount of financial security required.

Calculating Required Financial Security

Wells with Depths Less Than or Equal to 6,000 feet

Per 6 NYCRR 551.5, financial security is required for wells for which DEC issued a drilling permit on or after October 1, 1963 or for which DEC issued an acknowledgment of a Notice of Intention to Drill on or after June 5, 1973. Each well less than 2,500 feet in depth requires $2,500 in financial security, and each well between 2,500 feet and 6,000 feet in depth requires $5,000 in financial security, with blanket options available for both depth categories.

The calculator below will determine required amounts of financial security. Enter the number of wells from each depth category (depth less than 2,500 feet and depth from 2,500 feet to 6,000 feet) in the appropriate boxes and then click the "Calculate" button.

If you input a number of wells from both depth categories, the calculator will show two filing options:

  • Option A requires a separate financial security instrument for each depth category, which is calculated next to the entered number of wells.
  • Option B requires one type of financial security instrument. The number of wells from both depth categories are summed. Then, a financial security amount is calculated for the summed wells using only the depth category from 2,500 feet to 6,000 feet.

Regulated Well Financial Security Calculator

If your wells are in both depth categories, choose Option A or Option B below:

Wells with Depths Greater than 6,000 feet

For wells with depths greater than 6,000 feet, financial security is required in amounts based upon the anticipated costs of plugging and abandoning each individual well. To document the anticipated costs, an Authorization for Expenditure (AFE) is required per well. Contact the Division of Mineral Resources in the appropriate regional office for more information.