§ 9-17-85 — New or Amending Orders

Alabama § 9-17-85

• Jurisdiction: Alabama
• Title 9: Conservation and Natural Resources
• Ch. 17: Oil and Gas
• Art. 3: Unit Operations

Text

(a) The board, by entry of new or amending orders, may from time to time add to unit operations portions of pools not theretofore included and may add to unit operations new pools or portions thereof and may extend the unit area as required. Any such order, in providing for allocation of production from the unit pool of the unit area, shall first allocate to the pool or pools or portion thereof so added a portion of the total production of oil or gas or both from all pools affected within the unit area as enlarged, (and not required in the conduct of unit operations or unavoidably lost), the allocation to be based on the relative contribution which such added pool or pools or portion thereof is expected to make during the remaining course of unit operations to the total production of oil or gas or both so allocated. The production so allocated to the added pool or pools or portions thereof shall be allocated to the separately owned tracts which participate in the production on the basis of the relative contribution of each tract as provided in subdivision (3) of Section 9-17-83. The remaining portion of unit production shall be allocated among the separately owned tracts within the previously established unit area in the same proportions as those specified in the previous order. Orders promulgated under this paragraph shall become operative at 7:00 A.M. on the first day of the month next following the day on which the order becomes effective under the provisions of subsection (b) of this section.
(b) An order promulgated by the board under subsection (a) of this section shall not become effective unless and until the following occur:
(1) All of the terms and provisions of the unitization agreement relating to the extension or enlargement of the unit area or to the addition of pools or portions thereof to unit operations have been fulfilled and satisfied and evidence thereof has been submitted to the board.
(2) The extension or addition effected by the order has been agreed to in writing by the owners of at least 66 2/3 percent in interest as costs are shared under the terms of the allocation formula established by the board in the area or pools or portions thereof to be added to the unit operation by the order and by 66 2/3 percent in interest of the royalty owners as revenues are distributed under the terms of the allocation formula established by the board in the area or pools or portions thereof to be added to the unit operations by such order, and evidence thereof has been submitted to the board.
In the event both of the above requirements are not fulfilled within six months from and after the date of such order, it shall be automatically revoked.
(c) After the operative date of an order promulgated under this section, costs and expenses of operation of the unit as enlarged shall be governed by subdivision (5) of Section 9-17-83. Adjustment among the owners of the unit area as enlarged (not including royalty owners) of their respective investments in wells, tanks, pumps, machinery, materials, equipment and other things and services of value attributable to the operation of the unit as enlarged shall be governed by subdivision (4) of Section 9-17-83.

Legislative History

(Acts 1957, No. 352, p. 461, § 5; Acts 1965, 2nd Ex. Sess., No. 80, p. 110, § 1; Acts 1969, No. 733, p. 1287, § 1; Act 2000-714, p. 1517, § 1.)