SB212 Summary

• Amends Section 9-17-13 of the Alabama Code to clarify that risk compensation fees may be imposed on nonconsenting owners who received actual notice of the pooling or integration hearing, even if other nonconsenting owners did not receive notice.

• Allows the State Oil and Gas Board to impose a risk compensation fee equal to 150 percent of a nonconsenting owner's share of drilling and completion costs if the owner fails to pay within 30 days of drilling commencement or does not provide a notarized agreement to pay.

• Requires that at least 3/16ths of production from any well must be treated as royalty and remain free from drilling costs and risk compensation fees, regardless of circumstances.

• Permits risk compensation fees only after the board holds a public hearing with proper notice to affected parties and finds all statutory requirements have been met; operators must make good faith efforts to negotiate with nonconsenting owners and provide written notice of proposed operations.

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