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(a) An applicant for a drilling permit shall file an indemnity bond for each well drilled, redrilled, or deepened, or a statewide bond for the drilling, redrilling, or deepening of one or more wells on the same lease or unit area. The bond must be in the amount the commissioner determines necessary to ensure compliance with the applicable provisions of this chapter.
(b) The bond may either be a personal bond or a corporate surety bond executed by an insurance company authorized to do business in Alaska.
(c) The bond must be conditioned upon compliance with all terms of the permit and must remain in effect until the abandonment of all wells covered by the bond is approved by the commissioner and the bond is released or until another valid bond for the well has been filed with the commissioner.
(d) The commissioner's approval of the abandonment of a well and the release of the bond constitutes a presumption of proper abandonment, but does not relieve an operator of liability to the state after the abandonment.
(e) If authorized by the commissioner, comparable security, such as a certificate of deposit, may be submitted instead of the bond required by this section.
History: Eff. 5/8/83, Register 86
Authority: AS 41.06.040
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Last modified 7/05/2006