WHAT IS AN ORPHAN WELL?
The Short and Long Deﬁnition of an Orphan Oil Well
The quick and simple deﬁnition of an orphan well is “An oil well with no responsible or viable operator.” This deﬁnition is suitable for conversations with friends at a party or ofﬁce chat and it’s accurate enough.
Taking things a bit further, this is how the Louisiana Department of Natural Resources deﬁnes an orphan well:
“The term ‘orphaned’ refers to the current status of a particular wellsite and indicates that the operator of record is no longer a viable responsible party. Following a speciﬁc notiﬁcation procedure, wellsites are declared ofﬁcially orphaned after being sent to the State Register to be published”.
Below is the actual Louisiana State Law regarding orphan wells, RS 30:91
Acts 1993, No. 404, §2; Acts 1995, No. 297, §1, eff. July 1, 1995; Acts 1997, No. 994, §1; Acts 1999, No. 618, §1; Acts 2013, No. 220, §11, eff. June 11, 2013; Acts 2016, No. 342, §1.
End of Article.
§91. Orphaned oilfield sites
A. A site may be declared to be an orphaned oilfield site by the assistant secretary upon a finding that:
(1) No responsible party can be located, or such party has failed or is financially unable to undertake actions ordered by the assistant secretary; and
(2) The oilfield site either:
(a) Was not closed or maintained in accordance with all statutory requirements and the regulations adopted thereunder; or
(b) Constitutes or may constitute a danger or potential danger to the public health, the environment, or an oil or gas strata.
(1) Prior to declaring a site to be an orphaned oilfield site, the assistant secretary shall seek to notify the last operator of record, at his last known address contained in the department records, of the site that is to be declared orphaned and shall publish a notice in the Louisiana Register that the oilfield site is to be declared orphaned. Additionally, the assistant secretary shall seek to notify the surface owner of the site, at the address provided by the operator pursuant to R.S. 30:28(J), that the site is to be declared orphaned. Failure of the assistant secretary to notify the surface owner of the site shall not invalidate decision to declare a site orphaned. If resolution of a factual dispute is by any owner or operator, the assistant secretary shall hold a fact-finding prior to declaring the site orphaned assistant secretary shall make any determination necessary to resolve the dispute.
(a) In the event that a site is being declared orphaned, the assistant secretary shall retain a first lien and privilege upon such property superior to any existing mortgages, privileges, or liens of any kind, type, or nature whatsoever. The assistant secretary shall record a notice of such lien with the clerk of court in the parish where the site is located. The assistant secretary shall notify all other lienholders of record who have acquired a privilege, lien, or mortgage upon the property contained
mortgage upon the property contained within a well site, in writing by registered mail, return receipt requested, that he is declaring the site orphaned. If the salvage value of property at the site exceeds the cost of plugging and abandoning the well site in accordance with this Part, any excess funds shall be paid to other lienholders by rank. Any other excess funds from salvage shall be paid into the fund.
(b) In the event that a lienholder for any reason does not exercise his privilege against the property, he shall not lose his right to secure a money judgment against the owner or operator by whom he is owed a debt; however, all liens and privileges which existed upon the property shall be extinguished.
(c) In the event that lienholder is not properly notified as provided herein, any claim by the holder or holders against the commission, Department of Natural Resources, office of conservation, or the contractors for the value of the salvaged property shall be limited to the actual cash value of the salvaged property at the time of salvage.
(3) Sale or removal of property from an oilfield site which has been declared orphaned without the written consent of the assistant secretary is prohibited. The secretary shall have a claim against the person or persons who have sold or removed such property for the fair market value of the property sold or removed, and the lien and privilege provided herein shall follow such property into the hands of third persons whether such persons are in good or bad faith.
(4) Conducting operations on an oilfield site which has been declared orphaned without the written consent of the assistant
secretary is prohibited.
C. For purposes of this Part, the owner of the property upon which an orphaned oilfield site is located shall not be responsible for site restoration unless the owner is also a responsible party as defined herein.
D. In the event that the commissioner declares an emergency as provided in R.S. 30:6.1, the provisions regarding notice to the operator as provided therein shall be applicable to declaring the site orphaned.
Why Plug Orphan Wells?
Water aquifer contamination is the primary concern with oil wells left unattended to rust, rot, crumble and leak. And when they do fall apart nothing good comes from it. Ask yourself, how much poison do I want in my water? Better yet, in the water that my children and grandchildren may drink?
Did You Know?
In April 1946, Shell Oil drilled a 14,501 foot oil well in Louisiana, which was the deepest on record at the time.