HB169 Alabama 2017 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Victor Gaston
Republican
Session: Regular Session 2017
Title: Oil and gas, drilling and production units, pooling of interests, deduction from proceeds due nonconsenting owners, assessment of risk compensation fee against nonconsenting owners further provided for, Sec. 9-17-13 am'd.
Summary: The bill clarifies that risk compensation fees in oil and gas pooling can only be charged to nonconsenting owners who were actually notified of the hearing; owners who did not receive actual notice cannot be charged, but fees may be charged to other notified nonconsenting owners.
What This Bill Does
Keeps the pooling/integration framework and cost-sharing rules for drilling units, including a risk compensation fee of 150% of a nonconsenting owner's share of drilling costs and a 3/16 production share treated as royalty. Adds a notice-based rule: if a nonconsenting owner did not receive actual notice of the hearing, the fee cannot be charged against their interest, but can be charged against other nonconsenting owners who were properly notified. Requires hearing and notice for pooling actions and maintains procedures for allocating costs and collecting unpaid charges, including potential retention or sale of the nonconsenting owner's production to cover amounts owed. Effective date is immediate after the governor signs into law.

Who It Affects
Nonconsenting owners who were given actual notice of the pooling/integration hearing: may be charged a 150% risk compensation fee on their share of drilling costs and have related production allocated to pay those charges, subject to other existing rules.
Nonconsenting owners who did not receive actual notice: cannot be charged the risk compensation fee; their interests are protected, though the fee may still be imposed on other notified nonconsenting owners in the unit.

Key Provisions
Amends Section 9-17-13 to permit forced pooling or integration of drilling/production units with a risk compensation fee for properly noticed owners.
Clarifies that a risk compensation fee cannot be charged against a nonconsenting owner's interest if that owner did not receive actual notice of the hearing; the fee may be charged to other nonconsenting owners who did receive notice.
Maintains cost and production allocation rules: costs and any fee are charged to nonconsenting and consenting owners proportionally to their production share; 3/16 of production remains royalty free from costs and fees; 13/16 may be used to pay charges.
Defines roles and terms (operator, nonconsenting/consenting owner) and outlines collection mechanisms, including potential sale of a nonconsenting owner's production to cover amounts due, and the condition that notices and hearings must be properly conducted.

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