SB366 Alabama 2014 Session

Summary

Primary Sponsor

George M. “Marc” Keahey

Democrat

Co-Sponsors

Scott BeasonDel MarshCam WardPriscilla DunnJ.T. WaggonerGerald H. AllenGreg J. ReedClay Scofield

Session

Regular Session 2014

Title

Oil and Gas Board, oil and gas wells, drainage or production units, regulation of horizontal wells in oil reservoirs and offshore wells in gas reservoirs, Secs. 9-17-1, 9-17-12 am'd.

Summary

SB366 updates Alabama's oil and gas rules to regulate drilling, drainage, and production units for horizontal and offshore wells, with new details for shale gas and coalbed methane.

What This Bill Does

The bill clarifies and expands terms like drilling unit and drainage or production unit, and guides how the State Oil and Gas Board regulates these units for pools. It requires the Board to establish drainage or production units and special field rules after notices and hearings, specifying how large a unit can be and how much oil or gas can be produced from each unit. It sets maximum unit sizes by reservoir type, adds specific limits for shale natural gas and coalbed methane, and allows justification for larger units or multiple wells. It also allows voluntary agreements to form larger units with Board approval, and aims to protect correlative rights and prevent waste while ensuring just and equitable shares for producers, including provisions for offshore wells.

Who It Affects

• Oil and gas operators/producers who must follow new unit sizing, may drill more than one well per unit if justified, and may seek exceptions under the new rules.
• Landowners/tract holders in oil or gas pools whose just and equitable shares and correlative rights may be affected by unit changes and potential multi-well drilling, including participation in voluntary agreements.

Key Provisions

• Defines key terms such as drilling unit, drainage or production unit, and horizontal well, and updates definitions for shale gas and coalbed methane contexts.
• Requires the Board to establish drainage/production units and special field rules for pools after notice and hearing, stating the area a single well can drain and production allowances.
• Sets base unit size caps: oil up to 160 acres (with horizontal oil wells capped at 640 acres); gas up to 640 acres; offshore wells exempt from spacing limits; shale gas limits 320 acres vertical and 640 acres horizontal; coalbed methane 80-acre units.
• Allows larger units if justified by technical, economic, environmental, or safety reasons, up to 50% beyond the stated maxima; may amend to allow more than one well if a single well cannot drain the unit; protects coequal rights.
• Allows voluntary agreements to form larger drainage units than board rules within the general limits, with Board approval and the same protections.
• Offshore wells: spacing limitations do not apply; the Board determines the size and configuration of offshore drilling and production units.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Oil and Gas Board, State