HB169 Summary

• Amends Section 9-17-13 of the Code of Alabama 1975 to clarify provisions regarding forced pooling and integration of oil and gas drilling and production units.

• Allows the State Oil and Gas Board to impose a risk compensation fee equal to 150% of drilling costs on nonconsenting owners who fail to pay their proportionate share of unit well drilling and completion costs.

• Risk compensation fee cannot be charged against owners who did not receive actual notice of the pooling or integration hearing, but may be charged against other nonconsenting owners in the unit who were properly notified.

• Requires that at least 3/16ths of production from any unit well must be treated as royalty and distributed free of all drilling costs and risk compensation fees.

• Becomes effective immediately upon passage and approval by the Governor.