Start with what actually happens.
Well control insurance tends to be sold on fear. Here is the record instead. Texas keeps the longest and most complete blowout dataset in the country, and it is a fair read on any onshore basin.
Texas Railroad Commission blowout records, analyzed by Safe Influx (November 2020). Claim size per Kinsale Insurance, citing a leading well control remediation provider.
Run that against a real operator. If you drill twelve wells a year, 1.9 per thousand puts you at roughly a 1-in-45-year event. You are insuring something that will probably never happen to you.
When it does happen, controlling the well, redrilling it, and cleaning up the site costs $2 million to $5 million. Multiply how often it happens by what it costs. For an operator drilling about a dozen wells a year, that is roughly $45,000 a year of expected loss at the low end of that range, and closer to $80,000 at the midpoint the calculator below uses.
Hold that number. Everything below is about whether what you are paying makes sense next to it.
One thing the record does not let you dismiss: drilling and tripping are the most common phases for a blowout, but a workover gone wrong or a loss of control on a producing well reaches the same seven-figure costs. A quiet producing book is not a zero.
Three inputs. That is the whole price.
Footage, depth band, well status. Control of Well is one of the few policies you can rebuild from scratch, which means you can check it.
| True vertical depth band | Typical land rate, per foot | Notes |
|---|---|---|
| 0 – 5,000 ft | $0.30 – $0.55 | shallow vertical |
| 5,001 – 7,500 ft | $0.50 – $0.85 | most Mid-Continent |
| 7,501 – 12,500 ft | $0.65 – $1.05 | common trigger depth |
| 12,501 – 17,500 ft | $0.95 – $1.55 | deep gas |
| 17,501 – 20,000 ft | $1.45 – $2.30 | referral territory |
| 20,001 + ft | $2.15 – $3.40 | priced well by well |
Illustrative market ranges for US land. Your own rates come off your quote sheet, not off this page.
That last box is where the money hides. A producing well is rated at a fraction of a drilling rate, but you pay it on every foot of every wellbore on your schedule, every year. On a mature book the producing charge is often half the premium or more, and it rarely gets a second look, because it never feels like a decision.
Look up your wells. Build the number.
Type your operator name. If your wells are on file with the Oklahoma Corporation Commission and we have pulled them, this fills itself in. Otherwise enter footage by depth band. This is the same arithmetic the underwriter runs.
Oklahoma operators on file from Corporation Commission and Tax Commission records, rebuilt periodically. Anywhere else, or if your name is not found, enter footage by band.
| True vertical depth band | Producing and shut-in ft | Drilling ft, next 12 months |
|---|---|---|
| 0 – 5,000 ft$0.30 – $0.55 per ft | ||
| 5,001 – 7,500 ft$0.50 – $0.85 per ft | ||
| 7,501 – 12,500 ft$0.65 – $1.05 per ft | ||
| 12,501 – 17,500 ft$0.95 – $1.55 per ft | ||
| 17,501 – 20,000 ft$1.45 – $2.30 per ft | ||
| 20,001 + ft$2.15 – $3.40 per ft |
The deposit assumes the common structure: all of the producing charge plus half of estimated drilling, trued up on semi-annual reports. Fees and surplus lines tax add roughly 8 to 10% in Oklahoma.
Expected annual loss uses 1.9 blowouts per 1,000 wells drilled against a $3.5M average event, plus a small producing-book allowance, converting footage to wells at 7,000 ft a well. Planning figures, not predictions. Nothing on this page is a quotation.
Occurrence, aggregate, retention.
The industry rule of thumb sets your limit at three times the AFE. AFE stands for Authorization for Expenditure: the budget you circulate to your working interest partners before you spud a well, showing what it costs to drill and complete it. Triple it and that is your limit. It is a crude rule and it oversells many operators.
The question is not what a rule of thumb says. It is what your balance sheet can absorb and what number you can look at without flinching. Three separate decisions, and a bundled quote hides all three inside one price.
Occurrence limit
The most any single event can pay. Given a $2M to $5M typical event, $5M covers control and cleanup on a shallow vertical. $10M covers control plus a full redrill plus cleanup, which is the realistic bad day. Above $10M you are buying tail, and the tail is cheap because it rarely pays, which is exactly why it gets handed to you unpriced.
Aggregate
Ask whether your limit is per occurrence only, or per occurrence and capped annually. Many quotes are written “any one occurrence” with no annual cap stated. That is better than a shared annual aggregate and you should know which one you bought. If there is an aggregate, find out whether a second event in the same year leaves you bare.
Retention
This is the real lever. Every dollar of coverage below a few hundred thousand is money you will spend either way, run through an insurer with their expenses on top. A $100,000 retention on a real operating company is not risk transfer. It is a payment plan.
| If your book looks like | Occurrence | Retention | Why |
|---|---|---|---|
| Under 25 wells, shallow, under $5M revenue | $5M | $50K – $100K | limited cash to absorb a hit |
| 25 to 75 wells, mixed depth, $5M – $15M revenue | $5M – $10M | $100K – $250K | can fund a small event |
| 75+ wells, active drilling, $15M+ revenue | $10M | $250K – $500K | the value band |
| Deep gas, 15,000 ft+, high AFE wells | $15M – $20M | $500K | severity genuinely scales |
| Any book where a contract names a number | as required | as high as allowed | the number is not yours to choose |
Starting points for a conversation, not recommendations. Your actual structure depends on cash position, partner requirements, and drilling plan.
Before you accept a limit because someone told you to, find out who requires it. A lender covenant, a joint operating agreement, a working interest partner, or a drilling contract can each name a number, and if one does, you buy it and the conversation is over. State regulators generally do not. In Oklahoma, financial responsibility runs through operator agreements and plugging bonds, and insurance does not satisfy the Corporation Commission's bonding requirement. If no document names the number, it is a preference, and preferences should be priced.
At some point this stops being an insurance question.
Once you accept that a blowout is roughly a 1-in-45-year event for an operation your size, the arithmetic changes what you should be buying.
The gap is the whole opportunity.
Say your expected annual loss is $40,000 and your premium is $85,000. The $45,000 difference is not waste. It is the insurer's expenses, capital charge, and profit, and it is the price of certainty. That is a fair trade on the severity: nobody should self-fund a $10 million redrill.
It is a bad trade on the frequency. The bottom layer, the first few hundred thousand dollars, is money you will almost certainly spend anyway. Paying an insurer a markup to hold it is the most expensive way to fund a predictable cost.
So the structure that actually fits: buy a high occurrence limit with a large retention, which is cheap because the top rarely pays, and fund the retention layer through your own vehicle rather than renting it. Over ten years that can be several hundred thousand dollars of margin you keep instead of cede, against a layer where you expect close to zero claims.
The Latitude Plan
That is what the Latitude Plan is for: Clear View's structure for funding the retention layer through the operator's own vehicle instead of renting it from an insurer. It is not for every operator, and we will tell you plainly if it is not for you. It starts to make sense somewhere north of $5 million in revenue and a stacked premium worth restructuring.
Alternative risk structures require independent legal, tax and actuarial review. Clear View Insurance is not a licensed investment or tax advisor.
Six places this coverage leaks money.
None of these are exotic. All of them are on quotes we have read this year.
Measured depth on a horizontal well
Rating bands are true vertical depth. Report a 14,900 ft lateral at measured depth and a well that belongs in the 5,001 to 7,500 band gets priced in the 12,501 to 17,500 band. Same well, roughly double the rate, for as long as it stays on the schedule.
The schedule nobody checks
The footage on file often drives half your premium or more, and it drifts. Plugged wells, divested leases, disposal and water supply wells, non-operated interests, duplicate wellbores. We match your schedule well by well against what you actually operate. Footage nobody can account for is footage you should not be paying for.
The condition precedent on future wells
Read the subjectivity page. A typical one says any well drilled below a trigger depth, or outside a named county, that was not declared at inception must be reported before spud with terms agreed by underwriters at that time. If your drilling plan is deeper or wider than your declaration, the wells that matter most get priced one at a time, at their discretion, after you have bound and paid.
Deposit read as annual
The big number on page one is usually the minimum and deposit premium plus fees and surplus lines tax. The estimated annual is a different, larger number, and semi-annual reporting trues it up. Budget the annual, not the invoice. Then add the real cost of each well you drill, which on the ranges above runs from about $3,500 at 6,000 ft to $16,000 at 14,000 ft.
Exploratory rates on development wells
Development drilling is conventionally rated at 90% of the exploratory rate. If your declared drilling footage sits in the exploratory column and you are drilling into a field you already produce, that is roughly a 10% overcharge on the drilling half of the premium, sitting in plain sight.
General liability mistaken for well control
Per-well general liability programs often include a small blowout and cratering extension. That is not Control of Well. It is a sublimit inside a liability policy, priced per well on a different table, and it will not fund a redrill. Two coverages, two prices. Know which one you are holding.
Three steps.
We review the schedule
Every well on file, matched against what you actually operate, with depth, status and county checked well by well. Wrong depth is wrong band is wrong price, so we resolve depths before anything else. You get the mismatches in feet and in dollars.
We set limits and retentions against your book
From the schedule and your financials we come back with a recommended occurrence limit, aggregate treatment, and retention, then ask the market to price the full grid: $5M, $10M, $15M and $20M against $100K, $250K and $500K. You see every layer priced separately and choose where your balance sheet stops.
We read the conditions against your drilling plan
Trigger depths, county limitations, reporting timing, margin clauses, working interest carve-outs, care custody and control, redrill endorsements. Then we negotiate agreed rates for the bands and counties you actually intend to drill, before you bind, while you still have leverage.
Send us the quote you were handed.
No cost and no obligation. If your program is priced correctly we will tell you that in writing, and you can renew with whoever placed it.
What we need
- The quote, binder or policy, including the rate table and the conditions page
- Your drilling program for the next twelve months: how many wells, what depth, which counties
- Any lender, JOA, working interest or drilling contract clause that names an insurance limit
You do not need to send a well schedule. We build that ourselves and bring it to the first meeting.
Clear View Insurance · Moore, Oklahoma · Independent agency. Access to specialty, surplus lines and Lloyd's markets through wholesale partners.
Rate ranges on this page are illustrative and drawn from published market commentary and general underwriting practice. They are not a quotation, not an offer of insurance, and not any carrier's filed rates. Blowout frequency figures are from Texas Railroad Commission records as analyzed by Safe Influx (2020); claim size from Kinsale Insurance published material. Frequency and severity figures are planning estimates, not predictions. Coverage is described in summary only and the policy language governs. Clear View Insurance is not a licensed investment or tax advisor; alternative risk structures require independent legal, tax and actuarial review.
Schedule with Erick Cummings.
Director of Commercial Lines