SB212 Alabama 2017 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Session

Regular Session 2017

Title

Oil and gas, drilling and production units, pooling of interests, deduction from proceeds due nonconsenting owners, fee of owners who did not receive actual notice, charging against other nonconsenting owners, Sec. 9-17-13 am'd.

Summary

The bill clarifies how a risk compensation fee is charged in pooled oil and gas units, allowing it to apply to other properly notified nonconsenting owners while protecting those who did not receive notice.

What This Bill Does

If a nonconsenting owner did not receive actual notice of the pooling hearing, that owner's interest may not be charged the risk compensation fee. The fee may be charged against the interests of other nonconsenting owners in the unit who were given actual notice. Other pooling rules, including cost sharing and royalty treatment, remain in effect and enforcement actions for unpaid costs may still apply as provided by existing law.

Who It Affects

• Nonconsenting owners who received actual notice: may have the risk compensation fee charged against their interests in the unit.
• Nonconsenting owners who did not receive actual notice: cannot be charged the risk compensation fee; protections apply to their interests.

Key Provisions

• Clarifies that the risk compensation fee cannot be charged against a nonconsenting owner's interest if that owner did not receive actual notice of the pooling or integration hearing.
• Allows the risk compensation fee to be charged against the interests of other nonconsenting owners in the unit who did receive actual notice and complied with notice requirements.
• Maintains existing cost-sharing and royalty allocation rules (e.g., 3/16 of production as royalty) and permitting collection methods for unpaid costs, including potential deduction from production and related enforcement.
• If a nonconsenting owner who agreed to pay costs does not pay on time, unpaid balances accrue interest and may be collected from production; if the owner cannot be located, the fee is not charged against that owner's interest.
• Operators may pursue payment from other notified nonconsenting owners if one owner cannot be charged due to lack of notice, and other terms of pooling/integration orders continue to govern how production and costs are allocated.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Oil and Gas