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Getting a Permit to Operate an Orphan Well
Instructions for Obtaining a Permit to Operate an "Orphan" Oil or Gas Well
The permit to drill/operate for an Orphan oil or gas well can be transferred to a landowner or other party following the instructions below. The blue colored text denotes links to information or forms. If questions arise, please contact the Permits and Bonding Unit at 517-284-6826.
1. These procedures apply only to wells where the Supervisor of Wells has made a formal determination that the responsible party (permittee) is unknown, insolvent, or deceased. Such wells appear on what's called the "Orphan Well List." A well that does not appear on the Orphan Well List remains the responsibility of the individual or company holding the permit.
2. If the intention is to place the well on commercial production, the acquiring party must obtain rights to all mineral interests within the original drilling unit that was established for the well. This can be evidenced by a certified statement from a knowledgeable person that all mineral interests within the drilling unit are leased and controlled by the applicant. For information on drilling units please call the Permits and Bonding Unit at 517 284-6826.
3. If a gas well is intended to be used solely for domestic use (for a home or farm owned by the acquiring party and on the same premises as the well), mineral rights beyond the property lines do not have to be demonstrated.
4. The acquiring party must obtain adequate conformance bond coverage for the well. The amount on the bond is set by law and depends on the depth of the well.
5. If the well includes a tank battery and other associated production equipment where potential liabilities may exist, a written agreement known as a "Transfer Settlement Agreement" (TSA) may be required to identify particular measures necessary to return the well to production and eliminate compliance issues. If such a TSA will be required, Oil, Gas, & Minerals Division Compliance staff will contact the acquiring party following submittal of the permit transfer request.
6. Documentation and forms to be submitted to the Oil, Gas, & Minerals Division:
a. Request for Transfer of Permit, form EQP 7200-7. Fill in all items except under "TRANSFER OF A PERMIT FROM," only the 'Name of Selling Permittee' is required.
b. Original bond documents, for example form EQP 7200-3.
c. Well Permittee Organization Report, form EQP 7200-13.
d. Drilling Unit description and a certified statement or affidavit stating the acquiring permittee owns or controls all of the mineral interests within the drilling unit.
e. If required, a Transfer Settlement Agreement. If needed, a TSA will be negotiated by Oil, Gas, and Minerals Division and the acquiring permittee. This is usually done after submittal of the transfer request (6a-6d above).
Mail the transfer request package to:
Permits and Bonding Unit
Oil, Gas, & Minerals Division
Department of Environment, Great Lakes, and Energy
P. O. Box 30256
Lansing, MI 49909-7756
No fee is required. A site inspection may be necessary to detail elements of a TSA. Approval of the transfer request will be based on a case by case basis.