Quick answer
| Topic | What the statute says | Citation |
|---|---|---|
| First payment deadline | No later than six months after first sale (from receipt of proceeds for a substituted operator or lessee) | Ala. Code § 9-17-33(c) |
| Later payments | 60 days after the end of the month of sale (from receipt of proceeds for a substituted operator or lessee) | Ala. Code § 9-17-33(c) |
| Minimum payment and aggregation | Annual when a year's proceeds do not exceed $100; monthly on request above $25; under $10 may be held until production or payment duty ends, or paid yearly on request | Ala. Code § 9-17-33(c) |
| Interest on late payments | 12% a year; Federal Reserve discount rate when title is unmarketable | Ala. Code § 9-17-33(d); Ala. Code § 9-17-33(c) |
| Suspense and withheld payments | Unmarketable title only; interest at the Federal Reserve discount rate | Ala. Code § 9-17-33(c) |
| Division orders | No statute found | — |
| Owner remedies, notice and attorney fees | Unpaid proceeds plus interest; circuit court where the well is | Ala. Code § 9-17-33(d); Ala. Code § 9-17-33(e) |
| Check-stub disclosures | Statutory list of items on the stub or an attachment | Ala. Code § 9-17-33(b); Ala. Code § 9-17-33(b)(1)-(4); Ala. Code § 9-17-33(b)(5)-(9); Ala. Code § 9-17-33(a)(1) |
| Unclaimed royalties (escheat) | No mineral-specific period; three-year catch-all | Ala. Code § 35-12-72(a)(19); Ala. Code § 35-12-72(c) |
Proceeds from the sale of oil or gas must be paid to the people legally entitled to them starting no later than six months after the date of first sale. First purchasers make the payment, by tender to the owner's designated agent or at the owner's last known address. Where an operator or lessee has agreed to collect proceeds from the purchaser and pay owners, the operator or lessee takes the purchaser's place, and its deadlines run from the date it receives the proceeds.
Payment must begin no later than six months after the date of the first sale. (Ala. Code § 9-17-33(c))
Statute text “The proceeds derived from the sale of oil or gas production from any oil or gas well shall be paid to persons legally entitled thereto, commencing no later than six months after the date of the first sale”
The first purchasers make the payment, by tender to designated agents or at the owner's last known address. (Ala. Code § 9-17-33(c))
Statute text “The payment shall be made to persons legally entitled thereto by the first purchasers of the production by tender to the person's designated agents or at their last known address.”
When the operator or lessee is substituted for the purchaser, the time periods run from the date it receives the proceeds, not from the date of first sale. (Ala. Code § 9-17-33(c))
Statute text “the period of time set forth herein under which the parties must account to persons entitled to the production shall be determined as of the date of receipt of the proceeds for the production as opposed to the date of first sale applicable to the purchaser.”
After the first payment, proceeds are due no later than 60 days after the end of the calendar month in which the later production is sold. Where an operator or lessee is substituted for the purchaser as payor, the periods run from the date it receives the proceeds instead (see the first payment).
Subsequent payments are due no later than 60 days after the end of the month in which the production is sold. (Ala. Code § 9-17-33(c))
Statute text “and thereafter no later than 60 days after the end of the calendar month within which subsequent production is sold”
Purchasers may pay annually when a year's accumulated proceeds do not exceed $100. Amounts under $10 may be held until production or the purchaser's payment responsibility ends, unless the owner asks for annual payment. If the owner asks, amounts over $25 and under $100 must be paid monthly. Before accumulating more than $25, the purchaser must notify the owner of the monthly-payment option and how to request it.
Annual payment is allowed where a year's accumulation of monthly proceeds does not exceed $100. (Ala. Code § 9-17-33(c))
Statute text “The purchasers may remit to the persons entitled to the proceeds from production annually where the aggregate of one year's accumulation of monthly proceeds does not exceed one hundred dollars ($100).”
Amounts under $10 may be held until production ceases or the purchaser's payment responsibility ends. On request, they must be paid annually. (Ala. Code § 9-17-33(c))
Statute text “However, the purchaser may hold accumulated proceeds of less than ten dollars ($10) until production ceases or the purchaser's responsibility for making payment for production ceases, whichever occurs first. On the request of the person legally entitled to the proceeds, the purchaser shall remit payment of accumulated proceeds annually to the person if the purchaser owes the person less than ten dollars ($10).”
On request, amounts over $25 and under $100 must be paid monthly. The purchaser must give notice of this option before accumulating more than $25. (Ala. Code § 9-17-33(c))
Statute text “On the request of the person legally entitled to the proceeds, the purchaser shall remit payment of the proceeds to the person monthly if the purchaser owes the person more than twenty-five dollars ($25), but less than one hundred dollars ($100).”
Before accumulating more than $25, the purchaser must tell the owner about the monthly-payment option and give directions for requesting it. (Ala. Code § 9-17-33(c))
Statute text “before the purchaser accumulates proceeds greater than twenty-five dollars ($25), the purchaser shall provide notice to the persons entitled to the proceeds that there is an option to be paid monthly for proceeds greater than twenty-five dollars ($25).”
A first purchaser, or a substituted operator or lessee, that violates the section owes the unpaid proceeds plus 12% annual interest from the date the proceeds were due. Where proceeds cannot be paid on time because title is not marketable, interest is instead set at the Federal Reserve Discount Rate in effect on the first day of each month.
A violator owes the unpaid proceeds plus 12% per annum interest from the due date. (Ala. Code § 9-17-33(d))
Statute text “shall be liable to the persons legally entitled to the proceeds from production for the unpaid amount of the proceeds plus interest at the rate of 12 percent per annum, the interest accruing from the date at which the proceeds were due as specified herein.”
For proceeds delayed by unmarketable title, interest equals the Federal Reserve Discount Rate in effect on the first day of each month, running from the date proceeds were due to owners with marketable title. (Ala. Code § 9-17-33(c))
Statute text “the full amount of the proceeds plus interest at the rate on a per annum basis equal to the Federal Reserve Discount Rate in effect as of the first day of each month during which interest on the proceeds is payable”
The only statutory ground we found for delaying payment is unmarketable title. Proceeds that cannot be paid on time for that reason must later be paid to the owners ultimately determined, with interest at the Federal Reserve Discount Rate. A title problem with one interest may not delay payment to owners whose title is marketable. Marketability is judged under current real property law governing oil and gas title.
Delay caused by unmarketable title to one interest does not affect payment to owners with marketable title. (Ala. Code § 9-17-33(c))
Statute text “any delay in determining the persons legally entitled to an interest in the proceeds from production caused by unmarketable title to the interest shall not affect payment to persons whose title is marketable.”
When proceeds cannot be paid on time because title is not marketable, the purchaser must pay the owners ultimately determined the full proceeds plus interest. (Ala. Code § 9-17-33(c))
Statute text “cannot be paid within the time allowed by this section because the title thereto is not marketable, the purchasers of the production shall remit to the parties ultimately determined to be the legal owners of the production”
Marketability is determined under the then-current real property law governing oil and gas title. (Ala. Code § 9-17-33(c))
Statute text “Marketability of title shall be determined in accordance with the then current legally recognized real property law governing title to oil and gas interest.”
We found no Alabama statute setting rules for division orders: when one may be required, what it may or may not change, or the effect of signing. Ala. Code § 9-17-33(a)(2) only defines 'division order' for that section, as a contract prepared from a title opinion or other accepted ownership documentation and signed by the interest owners.
What we read: Read Ala. Code § 9-17-33 in full and the section titles of Title 9, Chapter 17, Article 1 (§§ 9-17-1 to 9-17-36) and Article 2 (§§ 9-17-50 to 9-17-69) on alison.legislature.state.al.us. The only division-order provision is the definition in § 9-17-33(a)(2). Sources read: Code of Alabama § 9-17-33 - Disposition of Proceeds from Sale of Oil or Gas Production (history: Acts 1982, No. 82-557; Acts 1991, No. 91-681; Act 99-396).
A first purchaser, or a substituted operator or lessee, that violates § 9-17-33 is liable to the people entitled to the proceeds for the unpaid amount plus 12% interest. Suits under the section go to the circuit court of the county where the well is located. The section sets no notice-before-suit requirement, attorney-fee award or lease-cancellation remedy.
A violator is liable for the unpaid proceeds plus 12% annual interest from the due date. (Ala. Code § 9-17-33(d))
Statute text “Any first purchaser of production or operator and/or owner of the right to drill substituted for the first commercial purchaser as provided herein, that violates this section shall be liable to the persons legally entitled to the proceeds from production”
The circuit court for the county where the well is located has jurisdiction over proceedings under this section. (Ala. Code § 9-17-33(e))
Statute text “The circuit court for the county or counties in which the oil or gas well is located shall have jurisdiction over all proceedings brought pursuant to this section.”
Every payment to a royalty or working interest owner must show nine items on the check stub or an attachment, unless the information is otherwise provided on a regular basis. The items include lease/well identification, month and year of sale, volumes, the owner's price, taxes, net value, decimal interest, and the owner's gross and net share. A 'check stub' includes a record mailed separately at or near the time of the check.
The information must be on, or ascertainable from, the check stub or an attachment for every payment to an interest owner. (Ala. Code § 9-17-33(b))
Statute text “Whenever payment is made for oil or gas production to an interest owner, whether pursuant to a division order, lease, servitude, or other agreement, all of the following information shall be included on or ascertainable from the check stub or on an attachment to the form of payment, unless the information is otherwise provided on a regular basis”
Items 1-4: lease, property or well identification; month and year of sales; total barrels or MCF purchased or sold; the owner's final realizable price per unit. (Ala. Code § 9-17-33(b)(1)-(4))
Statute text “(1) Lease, property, or well identification number, if any, or reference to appropriate agreement with identification of the well or unit from which production is attributed. (2) Month and year of sales or purchases included in the payment. (3) Total barrels of crude oil or MCF of gas purchased or sold. (4) Owner's final realizable price per barrel MCF, long ton, or other appropriate measurement.”
Items 5-9: total severance and production taxes; net value of total sales after taxes; the owner's decimal interest; the owner's share before taxes; and the owner's share after taxes. (Ala. Code § 9-17-33(b)(5)-(9))
Statute text “(7) Interest owner's interest, expressed as a decimal fraction, in production from subdivision (1) above. (8) Interest owner's share of the total value of sales prior to any tax deductions. (9) Interest owner's share of the sales value less the share of the production and severance taxes, as applicable.”
A 'check stub' includes a financial record mailed separately at or near the time of the check. (Ala. Code § 9-17-33(a)(1))
Statute text “CHECK STUB. The financial record attached to a check, included with a check, or mailed separately at or near the time the check is mailed.”
Alabama's unclaimed property act sets no separate dormancy period for mineral proceeds; they fall under the catch-all: property is presumed abandoned three years after the owner's right to demand it, or the obligation to pay it, arises (whichever is first), if the owner has not communicated with the holder or shown interest. The program is run by the Alabama State Treasurer.
Property not listed elsewhere is presumed abandoned three years after the owner's right to demand it or the obligation to pay it arises, whichever comes first. (Ala. Code § 35-12-72(a)(19))
Statute text “(19) All other property, three years after the owner's right to demand the property or after the obligation to pay or distribute the property arises, whichever first occurs.”
Property is unclaimed if, during that period, the owner has not communicated with the holder about it or otherwise indicated an interest in it. (Ala. Code § 35-12-72(c))
Statute text “Property is unclaimed if, for the applicable period set forth in subsection (a), the apparent owner has not communicated in writing, or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, with the holder concerning the property”
Official unclaimed property search: Alabama State Treasurer - Unclaimed Property.
Proceeds from the sale of oil or gas must be paid to the people legally entitled to them starting no later than six months after the date of first sale. First purchasers make the payment, by tender to the owner's designated agent or at the owner's last known address. Where an operator or lessee has agreed to collect proceeds from the purchaser and pay owners, the operator or lessee takes the purchaser's place, and its deadlines run from the date it receives the proceeds. (Ala. Code § 9-17-33(c))
After the first payment, proceeds are due no later than 60 days after the end of the calendar month in which the later production is sold. Where an operator or lessee is substituted for the purchaser as payor, the periods run from the date it receives the proceeds instead (see the first payment). (Ala. Code § 9-17-33(c))
Purchasers may pay annually when a year's accumulated proceeds do not exceed $100. Amounts under $10 may be held until production or the purchaser's payment responsibility ends, unless the owner asks for annual payment. If the owner asks, amounts over $25 and under $100 must be paid monthly. Before accumulating more than $25, the purchaser must notify the owner of the monthly-payment option and how to request it. (Ala. Code § 9-17-33(c))
A first purchaser, or a substituted operator or lessee, that violates the section owes the unpaid proceeds plus 12% annual interest from the date the proceeds were due. Where proceeds cannot be paid on time because title is not marketable, interest is instead set at the Federal Reserve Discount Rate in effect on the first day of each month. (Ala. Code § 9-17-33(d); Ala. Code § 9-17-33(c))
The only statutory ground we found for delaying payment is unmarketable title. Proceeds that cannot be paid on time for that reason must later be paid to the owners ultimately determined, with interest at the Federal Reserve Discount Rate. A title problem with one interest may not delay payment to owners whose title is marketable. Marketability is judged under current real property law governing oil and gas title. (Ala. Code § 9-17-33(c))
We found no Alabama statute setting rules for division orders: when one may be required, what it may or may not change, or the effect of signing. Ala. Code § 9-17-33(a)(2) only defines 'division order' for that section, as a contract prepared from a title opinion or other accepted ownership documentation and signed by the interest owners.
A first purchaser, or a substituted operator or lessee, that violates § 9-17-33 is liable to the people entitled to the proceeds for the unpaid amount plus 12% interest. Suits under the section go to the circuit court of the county where the well is located. The section sets no notice-before-suit requirement, attorney-fee award or lease-cancellation remedy. (Ala. Code § 9-17-33(d); Ala. Code § 9-17-33(e))
Every payment to a royalty or working interest owner must show nine items on the check stub or an attachment, unless the information is otherwise provided on a regular basis. The items include lease/well identification, month and year of sale, volumes, the owner's price, taxes, net value, decimal interest, and the owner's gross and net share. A 'check stub' includes a record mailed separately at or near the time of the check. (Ala. Code § 9-17-33(b); Ala. Code § 9-17-33(b)(1)-(4); Ala. Code § 9-17-33(b)(5)-(9); Ala. Code § 9-17-33(a)(1))
Alabama's unclaimed property act sets no separate dormancy period for mineral proceeds; they fall under the catch-all: property is presumed abandoned three years after the owner's right to demand it, or the obligation to pay it, arises (whichever is first), if the owner has not communicated with the holder or shown interest. The program is run by the Alabama State Treasurer. (Ala. Code § 35-12-72(a)(19); Ala. Code § 35-12-72(c))
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Educational only — not legal advice; statutes change, so confirm the current version and consult a qualified attorney for your situation. For a question about a specific payment, consult an attorney licensed in Alabama.
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