Yes. If you are a landowner who has an oil or gas well on your property, you may be required by law to plug and abandon any well on your property that is no longer in operation.
Why? Indiana Code provides that an “owner or operator” must plug and abandon an oil or gas well that (1) is completed as a nonproductive well; (2) ceases to produce oil or natural gas; or (3) is no longer operated for the purpose for which the well is permitted.
“Owner” is defined as a person who has the right to drill into and produce from a pool and to appropriate the oil and gas produced from the pool. Therefore, if you own land and own the minerals that lie under the land, you are an “owner” under Indiana law unless the the property is subject to a valid oil and gas lease or unless the ownership of the minerals is severed from the surface of the land. This is the case regardless of whether or not you were actively involved in the operation of the exploration and the sinking of the well.
Fortunately for landowners, the Indiana Department of Natural Resources’ Division of Oil and Gas has historically operated under a policy that does not require landowners to bear the responsibility for plugging and abandoning wells. The Division only pursues the actual operators and lessees in its efforts to require the plugging and abandonment of oil and gas wells in Indiana.
However, landowners should bear in mind that this is only policy. The law remains the same. If you have the right to explore and develop oil and gas on you property, you may also have the duty to plug and abandon any wells on the property. Consider this in negotiation and consideration of any oil and gas lease.
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