THE NEGOTIATOR Th e M a g a z i n e o f t h e C a n a d i a n A s s o c i at i o n o f Pe t ro l e u m L a n d m e n October 2014 Understanding the impact the Grassy Narrows and Tsilhqot’in Decisions Separating Primary and Thermal Production Rights The Grassy Narrows and Tsilhqot’in Decisions Selling of Assets and Expectations of Vendors Top-Court Provides Clarity for Projects Affecting Aboriginal Lands New CAPL Course: Understanding Reserve Evaluations Your energy partner Building on over 20 years of recognized oil and gas leadership and valued relationships with CAPL, McMillan continues to be your trusted and experienced energy counsel. For information on the services McMillan’s Energy Group can provide, please visit our website or contact Michael Thackray, QC. Michael A. Thackray, QC e: [email protected] t: 403.531.4710 THE NEGOTIATOR Th e M a g a z i n e o f t h e C a n a d i a n A s s o c i at i o n o f Pe t ro l e u m L a n d m e n Senior Editorial Board Director of Communications Brad Reynolds [ph] Advertising Editors Kevin Young [ph] Coordinating Editor Krissy Rennie [ph] Feature Content Editor Mark Innes [ph] Regular Content Editor Anne Macedo [ph] Social Content Editor Jason Peacock [ph] Editorial Committee Dave Lewis Amy Kalmbach Nathan Roberts Dinora Santos [ph] [ph] [ph] [ph] THE NEGOTIATOR 403-215-9159 403-724-4450 403-663-2595 403-818-7561 403-699-6451 403-691-7077 403-968-2673 403-619-2868 403-268-3006 403-470-1558 Design and Production Rachel Hershfield, Folio Creations Features October 2014 2 C ase Comment: Tsilhqot’in Nation v. British Columbia, 2014 SCC 44 Printing McAra Printing Submissions For information regarding submission of articles, please contact a member of our Senior Editorial Board. Disclaimer All articles printed under an author’s name represent the views of the author; publication neither implies approval of the opinions expressed, nor accuracy of the facts stated. Advertising For information, please contact Colin Taylor (403-777-3347) or Kevin Young (403-724-4450). No endorsement or sponsorship by the Canadian Association of Petroleum Landmen is suggested or implied. The contents of this publication may not be reproduced either in part or in full without the consent of the publisher. Ann Bigué, Bernard Roth, Alexandre-Phillipe Avard and Dan Collins 5 S CC Confirms Ontario’s Ability to “Take Up” Lands Under Treaty 3 Ann Bigué, Bernard Roth, Alexandre-Phillipe Avard and Dan Collins 7 T he Legal Implications of Separating Primary and Thermal Production Rights 2014–2015 CAPL Board of Directors President Michelle Radomski Vice-President Nikki Sitch, P.Land, PSL Director, Business Development Alberta & British Columbia Andrew Weldon Director, Business Development Saskatchewan & Alberta Oilsands Michelle Creguer Director, Communications Brad Reynolds, P.Land Director, Education Connie De Ciancio Director, Field Acquisition & Management Paul Mandry, PSL Director, Finance Larry Buzan, P.Land Director, Member Services Kent Gibson Director, Professionalism Joanna Shea Director, Public Relations Gary Richardson, PSL Director, Technology Mandy Cookson Secretary/Director, Social Andrew Webb Past President John Covey Readers may obtain any Director’s contact information from the CAPL office. Suite 350, 500 – 5 Avenue S.W. Calgary, Alberta T2P 3L5 [ph] 403-237-6635 [fax] 403-263-1620 www.landman.ca Kaitlin Polowski Denise Grieve Irene Krickhan Karin Steers [email protected] [email protected] [email protected] [email protected] Nigel Bankes In Every Issue 17 Board Briefs 19 Get Smart 24 The Negotiator’s Message From the Board: Communications 25 Roster Updates 31 The Social Calendar 32 CAPL Calendar of Events 32 October Meeting 32 November Meeting Also in this issue 6 Oktoberfest Charity Land Social 28 Scott Land & Lease Junior Landman Charity Golf Classic 30 2014 CAPL Golf Tournament THE NEGOTIATO R / OC TO BER 20 14 Case Comment: Tsilhqot’in Nation v. British Columbia, 2014 SCC 44 Introduction Background On June 26, 2014 the Supreme Court of Canada The Tsilhqot’in Nation (the “Tsilhqot’in”) is a (the “SCC”) released its much anticipated decision group of six indigenous semi-nomadic bands situ- in Tsilhqot’in Nation v. British Columbia.1 The case is ated in British Columbia. In 1983, the Government significant, in part, because it is the first SCC deci- of British Columbia granted a commercial logging sion where the applicant First Nation successfully licence for an area that the Tsilhqot’in consid- proved its claim to Aboriginal title. The case also ered part of their traditional territory. In lengthy provides further guidance for government and reasons, which followed a 339-day trial spanning industry interested in new developments on lands a five-year period, the trial judge concluded that that are subject to Aboriginal title. Overall, it is a the Tsilhqot’in were entitled to a declaration of logical and natural evolution of the jurisprudence Aboriginal title for part of their claimed tradi- Phillipe Avard and developed by the SCC in cases such as Calder , tional land, but refused to make that declaration Dan Collins Guerin , Sparrow and Delgamuukw. for procedural reasons. This territory potentially Dentons Canada LLP 2 3 2 4 5 6 Written by Ann Bigué, Bernard Roth, Alexandre- subject to Aboriginal title included not only village sites, but also to occupy the lands, decide how to use the lands, and to the territories that the Tsilhqot’in’s ancestors used regularly and economic benefits of those uses.12 The court emphasised that exclusively for hunting, fishing, and other activities. Aboriginal title is sui generis or unique. It is a communal right The British Columbia Court of Appeal overturned the trial held for the benefit of all present and future members so that any judge’s decision, but left open the possibility that the Tsilhqot’in contemplated uses must not substantially deprive future genera- could, in the future, bring a claim for Aboriginal title to certain tions of the benefit conferred by the title.13 specific sites with defined boundaries that were used intensively at the time of European sovereignty. Beyond those limited title Infringements on Aboriginal title claims, the Court of Appeal held that the Tsilhqot’in could exer- The SCC is clear in Tsilhqot’in that the rights conferred by cise their established aboriginal rights.7 Aboriginal title mean that governments and other parties seeking to use the land must obtain the title-holding group’s consent. The Decision However, if the Aboriginal group does not consent, the govern- Test for Aboriginal title ment could justify the proposed incursion on the land under Writing for a unanimous court, McLachlin CJC largely affirmed its s. 35 of the Constitution Act, 1982.14 The test for justifying infringe- previous jurisprudence on the test for Aboriginal title. To establish ment requires the Crown to demonstrate, inter alia, a compelling a claim for Aboriginal title, the burden rests with the applicant to and substantial governmental objective. The court affirmed that establish that, at the assertion of Crown sovereignty: economic development initiatives including forestry, mining and 8 hydroelectric developments are capable of justifying infringe1. their ancestors occupied the lands in a manner sufficient to ground their claim, ment, provided the proposed incursion on the Aboriginal right is consistent with the Crown’s fiduciary duty towards Aboriginal 2. they have continuously occupied those lands since the asser- people.15 The court emphasised that the focus must be on the tion of sovereignty (if current occupation is relied upon to economic value of the project relative to the detrimental effects ground the title claim), and on the Aboriginal rights holder and on whether or not the project 3. they have exclusively occupied and exercised effective control over the lands. would substantially deprive future generations of the benefit of the land.16 The court’s approach to the first branch of the test is of particular Remedies importance. The SCC rejected the notion relied upon by the court Finally, the SCC held that the remedies available to an Aboriginal of Appeal; that the Tsilhqot’in needed to demonstrate intensive group vary over time on a spectrum. The Chief Justice wrote:17 occupation of particular tracts of land to establish Aboriginal title. It held that Aboriginal title can be established by showing regular “The practical result may be a spectrum of duties appli- use of the territory by ancestors based on a “strong presence on or cable over time in a particular case. At the claims stage, over the land claimed, manifesting itself in acts of occupation that prior to establishment of Aboriginal title, the Crown owes could reasonably be interpreted as demonstrating that the land in a good faith duty to consult with the group concerned question belonged to, was controlled by, or was under the exclu- and, if appropriate, accommodate its interests. As the sive stewardship of the claimant group” in a manner “comparable claim strength increases, the required level of consultation to what would be required to establish title at common law”. and accommodation correspondingly increases. Where a 9 The determination of whether regular use of the territory is claim is particularly strong — for example, shortly before made out is a question of fact that will depend on the specific a court declaration of title — appropriate care must be circumstances of each case and, in particular, the characteris- taken to preserve the Aboriginal interest pending final tics of the Aboriginal group (number of members, nomadic or resolution of the claim. Finally, once title is established, semi-nomadic way of life, etc.) and the character of the land the Crown cannot proceed with development of title land subject to the claim (size, topography, availability of the resources not consented to by the title-holding group unless it has necessary to sustain the Aboriginal group, etc.). discharged its duty to consult and the development is justi- The SCC also noted that not every nomadic passage or use will fied pursuant to s. 35 of the Constitution Act, 1982. subjective or internally understood by the Aboriginal group.11 Once title is established, it may be necessary for the Crown to reassess prior conduct in light of the new Characteristics of Aboriginal title reality in order to faithfully discharge its fiduciary duty The SCC reiterated its past comments on the rights conferred by to the title-holding group going forward. For example, Aboriginal title. Aboriginal title holders have an exclusive right if the Crown begins a project without consent prior to 3 TH E NEGOTIATOR / OCTO BER 20 14 ground title to land.10 Moreover, the occupation cannot be purely Aboriginal title being established, it may be required More than ever, industry proponents must be sensitive to to cancel the project upon establishment of the title if Aboriginal law issues. They must make sure that the governments continuation of the project would be unjustifiably infring- fulfil their duties to consult and accommodate the First Nations ing. Similarly, if legislation was validly enacted before title was established, such legislation may be rendered inap- when appropriate. m plicable going forward to the extent that it unjustifiably Notes infringes Aboriginal title.” 1. 2014 SCC 44. 18 2. Calder v. Attorney General of British Columbia, [1973] SCR 313. The court also formulated the following solution to limit the risks 3. Guerin v. The Queen, [1984] 2 SCR 335. related to a potential declaration of Aboriginal title: 4. R v. Sparrow, [1990] 1 SCR 1075. 5. Delgamuukw v. British Columbia, [1997] 3 SCR 1010. “Governments and individuals proposing to use or exploit 6. Tsilhqot’in Nation v. British Columbia, 2007 BCSC 1700. land, whether before or after a declaration of Aboriginal 7. Xeni Gwet’in First Nations v. British Columbia, 2012 BCCA 285. title, can avoid a charge of infringement or failure to 8. Supra note 1 at para 26. adequately consult by obtaining the consent of the inter- 9. Ibid at para 38, 42 and 54. ested Aboriginal group.” 10. Ibid at para 33. 11. Ibid at para 38. Implications for Industry 12. Ibid at para 73. This case may give First Nations additional incentive to claim 13. Ibid at para 86. Aboriginal title over significant territories and increase the pres- 14. Ibid at para 76. sure on the governments and industry proponents. That being 15. Ibid at para 83. said, Aboriginal title, as the most comprehensive of the Aboriginal 16. Ibid at para 127. rights, remains particularly difficult to prove. Moreover, First 17. Ibid at para 91-92. Nations do not have a veto over land development, particularly in 18. Ibid at para 97. THE NEGOTIATO R / OC TO BER 20 14 cases where Aboriginal title is asserted, but still unproven. 4 SCC Confirms Ontario’s Ability to “Take Up” Lands Under Treaty 3 Grassy Narrows First Nation v. Ontario (Natural Resources) 2014 SCC 48 Introduction On July 11, 2014 the Supreme Court of Canada (the “SCC”) released The second phase of the trial will eventually involve a determi- its decision in Grassy Narrows First Nation v. Ontario (Natural nation of the Grassy Narrows’ claim that the specific forestry Resources).1 The unanimous decision affirms the Ontario Court of licenses at issue are invalid. This second phase of litigation has Appeal judgement which held that the Province of Ontario does yet to commence. not require Government of Canada approval to develop certain The trial judge held that Treaty 3 established a two-step lands surrendered by the Ojibway First Nation to the Crown under process for taking up treaty lands.5 Ontario could not take up any Treaty 3. portion of the Keewatin area without the federal government’s 2 approval. Moreover, the trial judge further held that provinces Background cannot infringe treaty rights even if such an infringement could In 1873, the Dominion of Canada concluded Treaty 3 with the be justified, because of the constitutional doctrine of interjurisdic- Ojibway Chiefs for the surrender of approximately 55,000 square tional immunity.6 miles of land in what is now Northwestern Ontario and Eastern The Ontario Court of Appeal unanimously reversed the lower Manitoba. The Dominion of Canada needed to secure safe passage court decision and confirmed Ontario’s ability to take up lands through these lands to promote settlement in Western Canada without any involvement from the Government of Canada.7 and build the Canadian Pacific Railway. In exchange for surrendering the lands, the Crown granted the Ojibway reserve lands in the The Decision area. Treaty 3 also gave the Ojibway rights to harvest non-reserve The SCC unanimously upheld the Ontario Court of Appeal deci- lands in their traditional territory until those harvest lands were sion. The SCC essentially based its reasoning on provisions of the “taken up” for settlement, mining, lumbering or other purposes by Constitution Act, 1867, on the text of Treaty 3, and on legislation the Government of the Dominion of Canada. dealing with Treaty 3 lands. 3 In 1997, Ontario granted a timber licence to Abitibi-Consolidated Inc. (now known as Resolute FP Canada Inc.) to conduct clear-cut Constitutional Authority of the Province forestry operations on Crown lands situated in a portion of the The SCC held that Treaty 3 was fundamentally an agreement Treaty 3 lands known as the Keewatin area. At the time Treaty 3 with the “Crown”, a concept that includes all government power was concluded, the Keewatin area was under the exclusive control (i.e. federal and provincial).8 It rejected the theory that since Treaty of Canada. However, it was subsequently annexed to Ontario 3 was made with the federal Crown (as opposed to the Crown through the enactment in 1912 of the Ontario Boundaries Extension in right of Ontario), only the federal Crown had obligations and Act. powers over matters covered by Treaty 3. In 2005, the Grassy Narrows First Nations (the “Grassy According to the SCC, it is the division of powers established in Narrows”), descendants of the Ojibway First Nation, brought an the Constitution Act, 1867 that determines which of the federal or action to set aside the forestry licence on the basis that it violated provincial governments is entitled to exercise the Crown’s rights their Treaty 3 harvesting rights. under Treaty 3.9 Given that the Keewatin area was annexed to Ontario in Judicial History 1912, section 109 of the Constitution Act, 1867 establishes that In 2006, a case management judge divided the trial into two Ontario holds the beneficial interest in these lands and the phases. The first phase consisted of two threshold questions: resources on or under these lands. Furthermore, section 92(5) 4 1. Whether Ontario has authority to “take up” tracts of land within diction over “Management and Sale of Public Lands belonging the Keewatin area so as to limit Treaty 3 harvesting rights? to the Province and the sale of Timber and Wood thereon”. 2. If the answer to the first question is no, does Ontario have Finally, section 92A gives the province jurisdiction to make laws authority under the Constitution Act, 1867 to justifiably infringe in relation to non-renewable natural resources, forestry resources, the appellants’ treaty rights? and electrical energy. These provisions of the Constitution Act, 1867 5 TH E NEGOTIATOR / OCTO BER 20 14 of that Constitution Act, 1867 gives provinces an exclusive juris- collectively give Ontario an exclusive constitutional authority to of Ontario to consult and, if appropriate, accommodate First take up provincial lands for provincially regulated purposes. Nation interests.13 The Grassy Narrows argued that the federal government’s The court also reiterated its recent dicta in Tsilhqot’in Nation v. authority over “Indians and Lands Reserved for Indians” set out in British Columbia14 that the doctrine of interjurisdictional immunity section 91(24) of the Constitution Act, 1867 gives Canada a residual does not prevent provincial laws from justifiably infringing treaty role in respect of the taking up of Treaty 3 lands. The SCC rejected rights.15 Consequently, where a province’s taking up of lands this argument. It noted that while section 91(24) allows the federal amounts to an infringement of treaty rights, this infringement government to enact legislation dealing with Indians and lands can be justified if the provincial government satisfies the require- reserved for Indians that may have incidental effects on provincial ments of the Sparrow/Badger analysis under section 35 of the lands, it does not give Canada authority to take up lands for exclu- Constitution Act, 1982.16 sively provincial purposes such as forestry, mining or settlement. 10 m Ann Bigué, Bernard Roth, Alexandre-Phillipe Avard and Dan Collins Interpretation of Treaty 3 and subsequent legislation Dentons Canada LLP According to the SCC, both the text of Treaty 3 as well as subsequent legislation dealing with Treaty 3 lands support the conclusion that Notes only Ontario could properly take up Treaty 3 lands. Indeed, the 1. 2014 SCC 48. text of Treaty 3 does not contemplate a two-step process involv- 2. Keewatin v. Ontario (Minister of Natural Resources), 2013 ONCA ing federal and provincial approval. Likewise, reciprocal statutes 158, 114 OR (3d) 401 [“Keewatin”]. enacted after the conclusion of Treaty 3 in order to resolve a 3. Supra note 1 at para 2. boundary dispute between Canada and Ontario or to extend the 4. Ibid at para 19. borders of Ontario, did not mention any continuing supervisory 5. Keewatin v. Minister of Natural Resources, 2011 ONSC 4801. role for Canada in the taking up of lands by the Province, or any 6. Ibid at para 22. two-step process involving both levels of governments. 7. Keewatin, supra note 2. 8. Supra note 1 at para 39. Limits on the Power to Take Up Lands 9. Supra, note 1 at para 30. Finally, the SCC held that Ontario’s power to take-up lands 10. Supra note 1 at para 37. under Treaty 3 is not unconditional. Based on prior decisions 11. [2005] 3 SCR 388. such as Mikisew Cree First Nation v. Canada (Minister of Canadian 12. Supra note 1 at para 50. Heritage) , the SCC reaffirmed that the province, “must exer- 13. Ibid at para 52. cise its powers in conformity with the honour of the Crown, 14. 2014 SCC 44. and is subject to the fiduciary duties that lie on the Crown in 15. Ibid at para; Tsilhqot’in Nation v. British Columbia, 2014 SCC 44. dealing with Aboriginal interests”.12 This requires the Province 16. Supra note 1 at paras 52 and 53. 11 Oktoberfest Charity Land Social October 9, 2014 • National on 10th • $60/Ticket projects and offers the same opportunities to donors and As the Landman Charity event approaches its 5th year, we’ve volunteers. For those who decided to shake things up a little and throw our community. A big reason for choosing this organization is its an Oktoberfest themed event that will have ability to create high impact sustainable projects that we can see THE NEGOTIATO R / OC TO BER 20 14 everyone talking. This year we’ve decided to donate all proceeds the results of first hand. to the Mary A. Tidlund Charitable Foundation. The Mary A. Tidlund In following the Oktoberfest theme there will be schooners of Charitable Foundation is a charitable organization that designs beer and Bavarian style food supplied with the purchase of your and funds sustainable development projects around the world. $60 ticket. In addition, there will also be a large silent auction that Established as a Canadian public foundation, it began operat- always has a variety of great items to bid on. For information regard- ing on October 14, 1998. Through the generosity of friends and ing sponsorship or purchase of tickets please visit the CAPL website supporters, it funds, operates and participates in a wide range of 6 don’t know, Mary Tidlund is a former landman with close ties to or contact Christopher Ellis at [email protected]. m The Legal Implications of Separating Primary and Thermal Production Rights Nigel Bankes the property would take the form of enhanced or sors in interest continue with primary production? ing: (1) What property interest did IFP acquire? This was the issue at the heart of this decision. (2) What is the test for determining whether a thermal production. In the course of his lengthy 73 page judgement Chief Justice Neil Wittmann (acting in place of Justice Ron Stevens (deceased)) addressed a number of questions of oil and gas law which will be of interest to the energy bar including the follow- The answer is that B gets shafted; B should have working interest owner has reasonable grounds for B.A., M.A., LL.M. taken better steps to protect itself rather than refusing consent to an assignment of shared inter- University of Calgary simply assume that all future production from est lands under the 1990 CAPL Operating Procedure? 7 TH E NEGOTIATOR / OCTO BER 20 14 Written by Case Considered: IFP Technologies (Canada) v. Encana Midstream and Marketing, 2014 ABQB 470 What happens when A sells B its working interest in the thermal or enhanced production from an oil and gas property and A or its succes- (3) What is the legal position where a working interest purports to operating procedure, which was an amended version of the CAPL withhold consent and the court subsequently determines that 1990 Operating Procedure. This second set of agreements covered the withholding of consent was unreasonable? (4) Did the devel- both the original CS Resources lands as well as other lands rolled opment of the property through primary production techniques in to the deal by PCR, including properties referred to as the Eyehill substantially nullify the benefit for which IFP (B) had bargained so Creek Assets. At the time of the AEA there were already 222 conven- as to amount to a breach of contract? (5) Assuming that there was a tional wells on these lands. breach of contract, how should damages be assessed? (6) Assuming Under the AEA, IFP was to acquire a 20% working interest in liability should any claim for damages be capped by a contractual the PCR lands including the Eyehill Creek Assets. The granting agreement between the parties? language of the AEA provided as follows: The Facts and the Agreements Between the Parties? [67] PCR hereby agrees to sell, assign, transfer, convey and IFP (a wholly owned subsidiary of IFP Energies Nouvelles of France) set over to IFP, and IFP hereby agrees to purchase from PCR, all had expertise and technical information in relation to the drilling, of the right, title, estate and interest of PCR (whether absolute placement and completion of horizontal wells. Beginning in the late or contingent, legal or beneficial) in and to the PCR assets,… 1980s IFP entered into a series of agreements with CS Resources, all subject to an in accordance with the terms of this Agreement. a pioneer in the use of horizontal wells for the development of (Emphasis is CJ Wittmann’s) heavy oil resources. As part of the first series of these agreements CS Resources granted IFP a 3% gross overriding royalty (GOR) on all The idea that IFP’s interests were actually limited to thermal and CS lands on which IFP’s technology was applied. PanCanadian (PCR) enhanced production first seems to have been introduced in the acquired CS Resources in 1997. IFP and PCR eventually concluded terms of the JOA which was scheduled to the AEA. Clause 4(c) that the GOR model was inappropriate and agreed to replace it provided (at para 92): with a working interest model. That agreement was recorded in an Memorandum of Understanding (MOU) of July 1998 and an 4(c) It is specifically agreed and understood by the parties Asset Exchange Agreement (AEA) of October 1998 to which were that the working interests of the parties as described in Clause 5 scheduled a Joint Operating Agreement (JOA) and its appended of this Agreement relate exclusively to thermal or other enhanced THE NAME IN SURFACE LAND ACQUISITIONS THE NEGOTIATO R / OC TO BER 20 14 LAND ACQUISITIONS FIRST NATIONS CONSULTATION PROJECT MANAGEMENT AER CROWN APPLICATIONS SHERWOOD PARK 8 ANNUAL COMPENSATION REVIEWS DAMAGE SETTLEMENTS PUBLIC CONSULTATIONS & NOTIFICATIONS 1.888.321.2222 www.hurland.com [email protected] recovery schemes and projects which may be applicable in developing other assets such as its Christina Lake prop- respect of the petroleum substances found within or erty. One of PCR’s Eyehill leases had expired and in other under the Joint Lands and the Title Documents. Unless cases Alberta Energy had issued notices on continued leases specifically agreed to in writing, IFP will have no interest and requiring PCR to establish the productivity of the properties. will bear no cost and will derive no benefit from the recovery of Oil prices were depressed and PCR had shelved any idea of petroleum substances by primary recovery methods from any of introducing a thermal recovery operation at Eyehill. Given these the rights otherwise described as part of the Joint Lands or the concerns and concerns as to the abandonment liabilities asso- Title Documents. ciated with its existing wells, PCR was receptive to proposals to (Emphasis is CJ Wittmann’s) removing itself from the property. In 2001 PCR executed a letter agreement with Wiser which was a form of farmout agreement Other provisions of the JOA, including the definition of working (ultimately formalized as an Abandonment, Reclamation and interest and the nature of the parties’ participating interests, all Option Agreement (ARO)) pursuant to which Wiser would earn simply referred to the interests of the respective parties in the PCR’s working interest in the Eyehill Creek lands by “dealing lands without further qualification by reference to the nature of with” the existing 222 wells by abandonment and reclamation, the production process. by re-working them or by putting them on production. It was Under the attached CAPL operating procedure the parties had elected the right of first refusal option (ROFR) under Article 24 clear that Wiser was only interested in the primary production possibilities from these lands. (at para 110) and the agreement seems to have contained PCR gave IFP the ROFR notice to which it was entitled in April the standard provisions on independent operations (with some 2001. At about the same time Wiser also sought (unsuccess- amendments) with a 400% penalty (at para 107). Another element fully) to clarify with IFP that IFP’s working interest was confined of the JOA was a series of clauses that relieved IFP of any to enhanced and thermal recovery operations. IFP declined to responsibility for the abandonment of the conventional (primary exercise its ROFR but did withhold consent to the disposition on production) wells on the Eyehill Creek property (at para 33). the grounds that Wiser “had no technical capability or intent to By the late 1990s PCR was concerned about its ability pursue thermal or other enhanced recovery” (at para 52; see also to hold on to the Eyehill Creek lands and was focusing on para 167). PCR proceeded to execute the ARO. Wiser protected NO TERRAIN IS TOO TOUGH. With over 41 years of geomatics and surveying experience, we don’t shy away from tough or rugged terrain. Contact us today for your next project. Edmonton Grande Prairie Swift Current Fort Nelson Fort St. John 1 800 478 6162 | canam.com 9 TH E NEGOTIATOR / OCTO BER 20 14 Calgary itself through an indemnity agreement with PCR. Wiser was never the royalty-as-interest-in-land cases culminating in Bank of Montreal novated into the AEA and related agreements. Wiser commenced v. Dynex Petroleum Ltd, 2002 SCC 7. If an interest in the proceeds of the operations contemplated by the ARO and earned its interest. production cannot give an interest in land how can a party have a Wiser never informed or consulted IFP as to the nature of those tenancy in common (not just any old interest in land, but an undi- operations. Canadian Forest acquired Wiser’s interests in 2004. vided interest) in a Crown lease that is contingent on the mode of All of the operations conducted by Wiser and Canadian Forest production of the leased substances? were primary production operations; none involved enhanced or thermal recovery. How was this issue resolved here? Chief Justice Wittmann seems to suggest that both the plaintiff and the defendant On the basis of these facts IFP alleged that the Wiser farmout adopted some version of the property-limited-by-contract (the ARO) was a breach of contract and sought damages. PCP took approach but the Chief Justice himself preferred some version of the view that IFP had unreasonably withheld its consent to the the property approach: proposed agreement. [97] I find that IFP’s working interest pursuant to these What Property Interest Did IFP Acquire? agreements has always been limited to thermal and other I think that there are two possible interpretations of what IFP enhanced recovery methods. I find the AEA did not grant acquired. One interpretation (which I will refer to as the prop- broad rights that were subsequently reduced or modi- erty-limited-by-contract interpretation) is that IFP acquired an fied by the JOA, as assumed by both the Plaintiff and the undivided interest as a tenant in common of the relevant Crown Defendants. The AEA does not define the term working leases and other assets (subject to some contractual limitations interest. The Preamble to the AEA states, however, that on its precise rights in relation to those assets). A second interpre- the ownership of working interests is subject to and in tation (which I will refer to as the property interpretation) would accordance with the terms and conditions of the JOA. hold that IFP acquired something in the nature of a working inter- Furthermore, the JOA is incorporated by reference into the est in production from the lands resulting from thermal or other AEA as though it were contained in the body of the AEA. enhanced recovery techniques. There are pros and cons to each As such, the definition of working interest in the JOA is of these interpretations. incorporated by reference into the AEA. The principal argument in favour of the property-limitedby-contract interpretation is based upon the natural interpretation (See also para 194 where the Chief Justice comments of the granting words used in the dominant agreement, the AEA. further on the relationship that the parties have created.) THE NEGOTIATO R / OC TO BER 20 14 It also has the advantage that it accords IFP a legally coherent 10 and cognizable interest in the property. We know what the basic But whatever interpretation is adopted it is still necessary to work rights of a tenant in common are. The contrary argument is that through the applicability of the operating procedure to primary this classification does not seem to be consistent with the overall production. We don’t have the complete story from the judge- intentions of the parties which suggested that IFP’s rights prima ment and in particular we do not know the full extent to which facie did not extend to primary production. But the best way to the parties modified the CAPL 1990 form, but one would antici- respect that intention is to conclude that the property rights of pate that significant changes would be required to make it work IFO as a tenant in common were limited by the terms of the other in these circumstances. Consider, however, what we do know. contractual arrangements between them, including the key provi- We know (see para 54) that Wiser carried out operations on the sion in the JOA referred to above. lands once it had acquired its interest in the property and we The principal argument in favour of the property interpre- know that it did not inform IFP about those operations. We can tation is that it delivers a result that seems to comport with the infer from this that Wiser was not in the habit of sending IFP AFE overall result intended by the parties reading all of the agreements (authorizations for expenditure) notices (which passes without together and the commercial context for those agreements. The comment in the judgement). Yet on the other hand the Court and principal knock against this interpretation is that it fails to respect the parties assume the applicability of the independent opera- the dominant conveyancing language of the AEA and as a result tions clause (modified as discussed at paras 105-107) with the delivers an interest which is unrecognizable in terms of property result that Chief Justice Wittmann concludes that IFP might have law. It is one thing to have an undivided interest which is confined been able to trigger the clause – although as a matter of practice to a particular formation or formations; or to have an undivided it lacked both the capital and the operational expertise to be able interest in a particular substance; but we create a whole new layer to do so (at para 197). But even aside from this practical problem of complexity when we admit of the possibility that ownership of facing IFP, it would be extremely difficult legally for IFP to propose an interest in land varies with the nature of production from those an effective independent operation where there were already lands. Not only is this complex but it seems to be inconsistent with licensed wells for the relevant drilling spacing units. Standard Land Since 1994, Standard Land’s experience in negotiating land access in highly sensitive environments with multiple stakeholders has served a single purpose: success. Let us put our experience to work for you. CORE SERVICES » Everything “Land” From simple consultation to large-scale project management, Standard Land expertly manages it all: • Freehold Mineral Acquisition • Crown Sales • Surface Land • First Nations Consultation • Non Routine Project Management • Surface and Regulatory Compliance • Full suite of additional Services KEY PERSONNEL Surface Acquisition: Randy Funkhouser [email protected] Mineral Acquisition: Mikala Hansen [email protected] With over 100 employees across Canada, contact Standard Land to discuss your project today. Crown & Mineral Administration: Terri Dechka [email protected] Head Office Calgary Tel: 403-265-1116 1300, 734 - 7th Ave SW, Calgary, AB T2P 3P8 [email protected] www.standardland.com Calgary: 1-866-858-1116 Vancouver: 1-877-687-1102 Standard Land Company Inc Regina: 1-866-441-2039 Winston E. Gaskin, President Toronto: 1-877-598-1116 11 TH E NEGOTIATOR / OCTO BER 20 14 FULL SERVICE PROVIDER OF LAND SERVICES The complexities of determining the applicability of various The ROFR provision of the 1990 CAPL afford each working interest clauses of the CAPL procedure (absent an express statement as owner (WIO) two independent rights: the ROFR right itself and the to applicability) seem legion. What about the applicability of the right to refuse consent to the proposed transfer even where the CAPL provisions dealing with access to information? Was IFP WIO will not exercise the ROFR. entitled to information about primary production from the lands (referred to at para 176)? What about Article XI dealing with the 2401B(e) In the event that the working interest described surrender of joint lands (referred to at para 221)? in the disposition notice is not disposed of to one or more The difficulties were also evident with respect to Article 24, of the offerees pursuant to the preceding Subclause, the the ROFR/consent provision of the procedure. Given Chief Justice disposition to the proposed assignee shall be subject to the Wittmann’s conclusions as to just what it was that IFP had obtained consent of the offerees. Such consent shall not be unreasonably (i.e. a working interest in only thermal and enhanced production) withheld, and it shall be reasonable for an offeree to withhold there was a certain logic to PCR’s position (at para 140) that the its consent to the disposition if it reasonably believes that transfer to Wiser should not trigger Article 24 since Wiser was only the disposition would be likely to have a material adverse interested in primary production. The difficulty with that argument effect on it, its working interest or operations to be conducted however was that whatever Wiser’s intentions with respect to what hereunder, including, without limiting the generality of it would produce (and how), Wiser was clearly acquiring PCR’s all or any part of the foregoing, a reasonable belief that entire interest in the property. Thus Chief Justice Wittmann is surely the proposed assignee does not have the financial capa- correct in concluding (at paras 141-145) that the Wiser transaction bility to meet prospective obligations arising out of this did trigger Article 24. The question would have been more difficult Operating Procedure. … had PCP retained its rights to thermal and enhanced production. THE NEGOTIATO R / OC TO BER 20 14 What is the Test For Determining Whether a Working Interest Owner Has Reasonable Grounds For Refusing Consent to an Assignment of Shared Interest Lands Under the 1990 Capl Operating Procedure? Bus (403) 229-1500 Fax (403) 245-0074 Shawn Irwin, President (Emphasis is CJ Wittmann’s) This gives rise to two questions. The first is really a methodological question – how should the Court go about analyzing such a question. And the second is that of how to apply the preferred approach to the facts at hand. As for the methodology, both eml. [email protected] 1250, 396 – 11th Ave S.W. Calgary, AB T2R 0C5 www.petroland.ca Representatives in: Calgary, Edmonton, Lethbridge, Regina, Carlyle, Grande Prairie, Victoria Surface Acquisitions Pipeline Right-of-Way Crown Sales Mineral Acquisitions Rent Reviews Confidential Deals Damage Settlements Public Consultant & Notification 12 counsel and the Court (at para 152) decided to rely on case law the circumstances a reasonable person would have refused dealing with the unreasonable withholding of consent in the to consent to the assignment. context of the landlord and tenant relationship. There might [156] A party must not refuse consent where such refusal be some doubts as to the applicability of this body of law in is calculated to achieve a collateral purpose, or benefit, not this setting and thus it is useful to have the Court affirm its contemplated by the original contract: Welbow at para 9. relevance. From this body of law the Chief Justice derived the [157] Proceeding with an assignment in the face of a following principles: reasonable refusal to consent is a clear breach of a negative covenant: Exxonmobil at para 51. [153] The burden of proof is on the party asserting [158] The court should not defer to the party withholding consent was unreasonably withheld: Sundance Investment consent, but must assess the reasons for withholding Corporation Ltd v. Richfield Properties Limited (1983), 41 AR 231 consent and consider whether a reasonable person in simi- at para. 23 (CA). lar circumstances would have made the same decision. The [154] The party whose consent is required is entitled to base court should consider the purpose of the consent clause its decision on its own interests alone: Community Drug Marts and the meaning and benefit it was intended to confer. P & S Inc, Estate of v. William Schwartz, Construction Co Ltd, 31 AR 466 at para 41, (QB), aff’d [1981] AJ No 537. Notably absent from this list is any reference to the venerable [155] Whether a person has acted reasonably in withhold- decision of the English Court of Appeal in Houlder Brothers v. ing consent depends on all the factual circumstances: Gibbs, [1925] 1 Ch 575, which stands for the proposition that a Exxonmobil Canada Energy v. Novagas Canada Ltd, 2002 ABQB lessor will be able to withhold consent on grounds related to the 455 at para 49. The question is not whether a reasonable personality of the proposed assignee or the use and occupation person might have given consent, but whether a reasonable that the proposed assignee will make of the leased premises. person could have withheld consent in the circumstances: Admittedly it is very difficult to reconcile Houlder Brothers with 1455202 Ontario Inc v. Welbow Holdings Ltd, [2003] OJ No 1785 the majority decision of Alberta’s Court of Appeal in Sundance, at para 9 (ONSC) (“Welbow”). In Exxonmobil, Park J reviewed but recall that in Sundance the majority was clearly of the view the evidence on an objective basis to determine whether in that a lessor had good grounds to object to any assignment TH E NEGOTIATOR / OCTO BER 20 14 13 that prejudiced the lessor’s financial interest. I have never not to be unreasonably withheld) the assignment or sublease been very persuaded by that approach and much prefer Justice is not invalid or void but the tenant is in breach of its covenant Harradance’s dissenting judgement but in this case both Houlder and the landlord will typically have reserved a right of re-entry and the majority judgement in Sundance seemed to offer some for breach. Similarly, if the landlord withholds consent and the comfort to IFP. tenant believes the withholding to be unreasonable the tenant Indeed, if one looks simply to the outcome of the transfer in may elect to proceed knowing that if it can establish that the this case it look like a case in which IFP should be able to with- landlord’s behavior is unreasonable it will not be in breach of hold consent. After all, if IFP failed to forestall the transfer it was its covenant. This is a high risk course of action since in the going to be forced into a joint venture with a party that had the case of a lease the penalty for being wrong may be the loss of announced interest of exploiting the property exclusively for its the lease. As a result, the assignee may well, as here, demand primary production potential. Not only would that exclude IFP from an indemnity. High risk it may be but it is a more expeditious the opportunity to take its 20% share of production, it would also way of proceeding than the alternative which is to apply for a prejudice the economics and perhaps physical feasibility of future declaration as to the unreasonableness of any withholding of enhanced or thermal recovery operations at the site. But for Chief consent (and note that under the CAPL the arbitration provisions Justice Wittmann this was an oversimplification. He concluded that of Article 24 apply to valuation issues in package deals; they do IFP’s withholding of consent was unreasonable. not apply to the consent issue). Ultimately I think that the principal reason for this conclusion The issue is a bit more complicated in the context of CAPL is that as a matter of law IFP is no worse off after the Wiser trans- because of the novation provisions of the agreement – modi- action than it was before the transaction. This is because PCR was fied in this case and universally by the terms of the CAPL under no legal obligation to develop the thermal and enhanced Assignment Procedure. These provisions are designed to provide recovery potential of the lands. IFP had failed to contract for that for deemed novation in certain circumstances but the provisions obligation. One may question how consistent this is with the land- can only be triggered if the parties are in compliance with the lord and tenant cases which I think clearly allow the landlord to consent provisions. use the right to withhold consent as a means of ensuring that the In this case Chief Justice Wittmann concluded that the logic of property is not used for certain purposes even though the landlord all of this was applicable to the joint operating context and thus: had not specifically contracted against those uses in the lease: (1) PCR was not in breach of the covenant not to assign without Houlder Brothers and Sundance both support that proposition. consent, because consent was withheld unreasonably, (2) the Perhaps more convincing is Chief Justice Wittmann’s overall deemed novation provisions were not precluded from applying by assessment of (un)reasonableness in light of the dire circum- the absence of consent, and (3) therefore Wiser had been novated stances facing PCR (and therefore ultimately IFP itself). Essentially into the relevant agreements. PCR was sitting on a dying property in the form of a set of leases The reader may be wondering where this argument was (although PCR did hold the freehold mineral title to some of the going and who was on what side of it. The issue had been raised lands) that were going to expire or be cancelled unless somebody by IFP. IFP wanted to argue that if Wiser had not been novated did some work on the property (and PCR certainly had no obli- into the JOA the provisions in the JOA that limited IFP’s inter- gation to do that). Seen in this light the transfer to Wiser was a est to an interest in thermal or enhanced recovery could not means of saving the properties and saving IFP’s interest in those be enforced against IFP – IFP could then be taken to have an properties even if it might have prejudiced the adoption of ther- unqualified 20% undivided interest in the property. And on that mal and enhanced recovery in the future. In other words, better basis IFP sought an accounting of its share of production rely- the chance of the continuing possibility of future thermal and ing on the Statute of Anne, 4 Anne c 16, s 27 (UK). Chief Justice enhanced recovery (however remote) than the inevitable (and Wittmann concluded (at paras 402-403) that his earlier findings relatively immediate) loss of the properties. But if one takes this as to the limited nature of IFP’s interest and his conclusion on broad view of reasonableness then it might also be necessary to the novation argument just referred to were a complete answer consider the extent to which the dire circumstances in which to the claim for an accounting. PCR found itself were inevitable or whether they were of PCR’s THE NEGOTIATO R / OC TO BER 20 14 own making. What is the Legal Position Where a Working Interest Purports to Withhold Consent and the Court Subsequently Determines That the Withholding of Consent Was Unreasonable? 14 Did the Development of the Property Through Primary Production Techniques Substantially Nullify the Benefit For Which Ifp (B) Had Bargained so as to Amount to a Breach of Contract? It seems to me that Chief Justice Wittmann dealt with this issue in If a tenant assigns a lease in breach of the covenant not to two parts of his judgement, first at paras 199-212 under the head- assign or sublet without the landlord’s consent (such consent ing “4. What is the relevance of the reasonable expectations of the parties?’ and then later at paras 220-270 under the heading “6. established that “an operator pools on a reserves basis if the Has the opportunity to pursue a thermal or other enhanced geographical data clearly shows the boundaries of the reservoir, recovery project at Eyehill Creek been destroyed or damaged?” and those boundaries are significantly at variance with the size In framing the issue in terms of substantial nullification rather of the corresponding surface parcels…”. Given the unusual nature than adopting the Chief Justice’s headings I am drawing on Justice of the split rights in this case it was clearly going to be difficult Kerans’ judgement in the Court of Appeal in Mesa Operating Ltd for IFP to establish an analogous body of practice to support its Partnership v. Amoco Resources (1994), 149 AR 187 (which the Chief contentions in this case. Justice refers to at paras 199-201). I think that the Mesa case Chief Justice Wittmann concluded that IFP could not make and the substantial nullification test referred to in that decision out its case under either of these two headings. IFP had not provide an appropriate umbrella for the consideration of these bargained for a prohibition on primary production (at para 212) two headings in part because there is no discussion of any appli- (and thus that benefit was not in the contemplation of both cable law under heading (6) in the chief justice’s judgement. Thus parties and had not been nullified) and while there was much it seems best to bring the “destroyed or damaged” framing of evidence that it would be more difficult and more expensive to heading (6) under the Mesa umbrella. introduce a thermal or enhanced recovery operation into a field In Mesa, Mesa held a GOR in half a section of lands and argued that had been drilled out and depleted through conventional that Amoco breached its contractual obligations to Mesa when it recovery measures and conventional cementing jobs, such an carried out an administrative pooling of its lands on an acreage operation would not be impossible (at paras 267 – 268). In so basis rather than on a reserves basis thereby effectively diluting concluding the Chief Justice establishes that Mesa sets a very Mesa’s royalty entitlement. Amoco had the power to pool under high threshold. The application of the test does seem justified the terms of the GOR agreement and thus the question was in this case because the parties clearly contemplated some whether it had abused its discretion in the manner in which it continuing primary production, and, as the Court notes at para went about exercising that power. The Court of Appeal concluded 195, given that, some level of conflict between those who own that this was a case in which pooling should have taken place all the rights and those who only own some rights (the right to on a reserves basis largely because it was able to say, consider- enhanced or thermal production) is inevitable. ing the traditions and practices of the industry, that it was well YOU HAVE A LOT ON YOUR MIND – WE CAN HELP With extensive experience in the oil and gas sector and a strong energy regulatory practice, our Calgary office is perfectly positioned to assist Western Canada’s energy industry. Randy Madsen Jason Paton Jay Lalach Bernadita Tamura-O’Connor #1 regional law firm in British Columbia, Alberta and the territories, Canadian Lawyer magazine (2010-2014). 15 TH E NEGOTIATOR / OCTO BER 20 14 Paul Negenman Assuming that there was a breach of contract how should damages be assessed? focusing on the price environment at that time is that PCR would Although Chief Justice Wittmann concluded that PCR was not and wait for prices to improve. not have been able to hold on to the properties (see paras 377-378) liable to IFP he did go on and consider whether IFP had been able posed three questions: (1) Was the claim of lost opportunity to Assuming Liability Should Any Claim for Damages be Capped by a Contractual Agreement Between the Parties? develop the thermal and enhanced recovery potential of the Article 9 of the AEA provided that in no event should PCR’s liability property real or fanciful? (2) If real what was the value of the to IFP exceed the value of the PCR assets. The parties assigned a opportunity? (3) What was the likelihood that IFP would have value of $16 million to those assets; IFP’s claim for damages was been able to realize this opportunity and what discounting factor for $45 million. Chief Justice Wittmann commented as follows: to establish that it had suffered any damages. The Chief Justice should be applied? Chief Justice Wittmann concluded (at paras 284- 285) that the claim of lost opportunity was not merely fanciful. PCR disposed [406]…. Given the language of the contract, IFP’s claim for $45 million in damages was untenable. of the Eyehill Creek property for strategic reasons not because it believed that that the property had no potential for thermal Such limitation of damages clauses are common in purchase and development. He was less sympathetic to the plaintiff on the sale agreements for oil and gas properties and confirmation of other two questions concluding (at para 364) that the plaintiff had been unable to establish any value for its lost opportunity and their enforceability will be welcomed. m concluding further that there was zero chance that PCR would have initiated a thermal recovery operation in the absence of a Reprinted with permission. First published farmout because of the poor economics and IFP would have been August 18, 2014 on ABlawg.ca. To subscribe unable to initiate such an operation itself. I have not dug too to ABlawg by email or RSS feed, please go to deeply into these sections of the judgement but they seem very ab.lawg.ca Follow ABlawg on Twitter @ABlawg. much to emphasise the economics of a thermal recovery project THE NEGOTIATO R / OC TO BER 20 14 based upon oil prices at the time of the farmout. The rationale for 16 Board Briefs procedures manual for the BOD’s approval to then be available on the website. • Michelle Radomski reminded Directors of the following: The key discussion items at the CAPL Board of Directors’ • The next Board of Directors’ Meeting will be held September Meeting held June 23, 2014 at Michelle Radomski’s residence were as follows: 9th, 2014. • The next General Meeting is on September 22nd in Jasper at the CAPL Conference. m Andrew Webb In Attendance L. Buzan B. Reynolds M. Cookson J. Shea M. Creguer N. Sitch K. Gibson A. Webb P. Mandry A. Weldon M. Radomski Absent C. De Ciancio G. Richardson J. Covey Secretary/Director, Social Guests None The key discussion items at the CAPL Board of Directors’ Meeting held September 9, 2014 at Range Royalty’s offices were as follows: * Note: G. Richardson participated in meeting by teleconference • Michelle Radomski tabled the proposed CAPL Bylaw Amendments for Board approval. As a result of discussion and request for further Member Services Committee input, the final bylaw amendments were subsequently approved by the Board by unanimous email vote and to be presented to membership for approval by Special Resolution at next General Meeting. In Attendance Absent L. Buzan B. Reynolds P. Mandry M. Cookson G. Richardson J. Covey J. Shea M. Creguer N. Sitch C. De Ciancio A. Webb K. Gibson A. Weldon M. Radomski Guests Roland Guenette Eric Bedford • Larry Buzan, Director of Finance outlined our current marketing process and discussed feedback from our sponsors and • Larry Buzan, Director of Finance, presented a Treasurer’s Report members. Larry presented a centralized marketing strategy as of August 31st, 2014, showing CAPL investments totalling proposed to provide a more consistent and streamlined process $977,145 CDN along with a cash balance of $709,568 CDN. for obtaining and managing sponsorship funds for annual The CAPL Scholarship Fund has a balance of $243,636 CDN. budget planning purposes. There were no transfers made since the last report. • Gary Richardson (via speakerphone) provided an update to the • Kent Gibson presented seven Active, three Associate and ten Board with regards to the CAPL Annual Publication. G. Richardson Student membership applications to the Board of Directors, recommended the CAPL use June Warren Publications on the which were subsequently approved. basis of value and distribution. The Board approved using June Warren Publications for the CAPL Annual Publication. • A new Privacy and Anti-Spam Policy as well as a new “Who We Are” Introduction to CAPL were approved for posting to the new • Andrew Weldon presented the concept of event insurance for website when launched in September; the annual CAPL Conference. A. Weldon recommended that • Nikki Sitch advised the Board that the Office Space Review payment if cancellation is necessary. The Marketing group will Committee (OSRC) is looking into new office space as the look into the “force majeure” clauses of all major agreements current lease with Chevron is coming to an end on July 31, 2015. and make a recommendation on next steps. Colliers has presented three potential lease options thus far, all of which are centrally located in the downtown core. The OSRC • Michelle Radomski advised that she has updated the privacy and anti-spam policy for the CAPL. Michelle will update the new is looking for space to accommodate four offices and two classrooms to host educational classes (~4800-5000 sq. ft.) website page for “who we are” and pull together a policy and 17 TH E NEGOTIATOR / OCTO BER 20 14 the CAPL look into getting coverage for the speakers and band • Larry Buzan updated the Board on the Central Marketing • CAPL has held or has scheduled meetings with CAPLA and Initiative. He has received feedback from sponsors and commit- CAPP to investigate opportunities for joint public relations and tee members on the suggested framework which is currently government liaison initiatives. being evaluated. A Central Marketing committee will be formed consisting of six members. • CAPL is to again act as a sponsor and participant at the next PLS Calgary Deal Makers Expo in October 2014. • Joanna Shea provided an update on the Professionalism Initiative. Through discussions with land executives and other • Michelle Radomski reminded Directors of the following: CAPL members it has become apparent that the CAPL needs to build credit and market value for its designations through • Process and Procedures Manuals and Terms of Reference marketing and wider adoption of the CML, CSL, PSL , and outlining goals, objectives and accountability are to be devel- P.Land® amongst members. oped for the Office and for each of the directors’ portfolios ® and the committees. • Roland Guenette and Eric Bedford from CIBC Wood Gundy provided the Board with an overview of the service they provide • The next Board of Directors’ Meeting will be held on October 7, 2014. as account managers for the CAPL’s investment accounts. • The next General Meeting will be held at the Annual Roland and Eric summarized the various options the CAPL has Conference Opening Breakfast on September 22, 2014 in with regards to low risk investments suitable for an organization similar to the CAPL. Jasper. m Andrew Webb • Paul Mandry’s report was read advising the Board as to the Secretary/Director, Social proposed amendments to the Saskatchewan Surface Rights Act, and provided an update on the Aboriginal Consultation Levy Act and where the Government of Alberta is at in its implementation. THE NEGOTIATO R / OC TO BER 20 14 & transactions Are you missing pieces to your pending A&D transaction? Jaguar Land’s Quality, Focused and Value Driven Land Professionals can put the pieces together. 18 Contact Jaguar Land 403-718-0525 jaguarland.ca Get Smart The CAPL Education Committee is pleased to present the following courses: British Columbia P&NG Regulations October 1, 2014 Professional Ethics: Core Values 8:30 a.m. to 4:30 p.m. October 8, 2014 8:30 a.m. to 4:30 p.m. The seminar will provide an overview of the British Columbia This seminar is suitable for all interested land personnel and is Petroleum and Natural Gas Act and associated regulations, includ- required for prospective CAPL members as well as CAPL’s profes- ing such topics as the land tenure system and the Crown sales sional certification program. In this course the participants will be process. A question and answer period will follow the presentation. given the opportunity to identify their core values, the possible sources for those values, and how those values express them- British Columbia Surface Rights (PSL®) October 2, 2014 selves in both their personal and professional life. Attention will 8:30 a.m. to 4:30 p.m. also be given to the development of personal mission and vision statements and how they reflect the core values identified. In this This course is intended for surface landmen and administra- seminar there is an emphasis on the practical application of the tors interacting in all facets of surface activities and associated themes discussed. regulations in British Columbia. This seminar will cover a wide Fundamentals of Oil and Gas Law range of issues provided under the jurisdiction of the British October 9, 2014 Columbia Surface Rights Board and the British Columbia Oil & 8:30 a.m. to 4:30 p.m. Gas Commission. An overview of oil & gas activities in British Columbia will also be presented by the operations manager of the This seminar will cover a range of legal issues, including environ- Canadian Association of Petroleum Producers. mental law and regulatory matters, but will focus on the types of contracts most often dealt with in the upstream oil and gas indus- Fundamentals of Surface Agreements (PSL®) October 7, 2014 try. This is intended for junior to intermediate industry personnel. 8:30 a.m. to 4:30 p.m. A question and answer period will be scheduled. Freehold Mineral Lease This course is for the purposes of having detailed discussions on October 14, 2014 those surface land agreements that are most commonly used 9:00 a.m. to 4:30 p.m. during the surface acquisition process. Types of agreements include the Surface Lease, Right-of-Way Agreement, Lease and Grant, This seminar is intended for industry personnel who require Amendments, Damage releases, and temporary agreements. Other a detailed knowledge of freehold mineral rights. Anyone who miscellaneous surface documents will be discussed as to when, is taking this seminar should previously have taken CAPL’s Oil where and how they are to be used. This course also covers the basic and Gas Law or an equivalent course and/or have several years concepts of contract law in order to learn how to make appropriate of experience in land. The instructor will discuss the Torrens System in Alberta (with some reference to Saskatchewan), the changes to existing documents, and draft proper letter agreements. Elexco_Negotiator qrtrhoriz4CfinPage 1 6/24/11 7:47:54 Schedules and addendums and their uses will also be discussed. concept of indefeasibility and its qualification, historical searches, A FULL SERVICE LAND COMPANY SERVING NORTH AMERICA Elexco Ltd. Canada: 1.800.603.5263 www.elexco.com Elexco Land Services, Inc. New York: 1.866.999.5865 Michigan: 1.800.889.3574 Pennsylvania: 724.745.5600 19 TH E NEGOTIATOR / OCTO BER 20 14 • Mineral and Surface Leasing • Right-of-Way Acquisitions • Mineral Ownership/Title Curative • Seismic Permitting • Mapping/GIS Services • Abstracts of Title PM registration and caveating issues. The instructor will then review tenure regulations and guidelines. The course will focus on gain- the nature and ownership of oil and gas in place, covering such ing an understanding of the current oil sands tenure regulations issues as: the rule of capture and legal and regulatory entitlement and guidelines. Topics to be discussed will include: public and to various substances such as coal bed methane. The topics to be private sales; rights conveyed by oil sands agreements; types of covered under the Freehold Oil and Gas Lease will be: the prin- oil sands agreements; solution gas in oil sands; continuation of ciple features of the lease, its standard clauses, the formalities oil sands leases; minimum level of evaluation criteria; escalating of completion and execution of the lease, the termination of the rentals; development, research and exploration offsetting costs; lease, and top leasing. A review of current court and regulatory bitumen upgrading as it relates to offsetting costs; lease designa- decisions regarding freehold leases will complete the day. tions; changing from nonproducing to producing and vice versa. Well Spacings and Holdings Understanding Reserve Evaluations NEW COURSE October 15, 2014 8:30 a.m. to 4:30 p.m. October 20, 2014 1:00 p.m. to 4:30 p.m. This seminar is designed for landmen and other individuals who This half-day session will be of interest to people interested in wish to become familiar with the concepts and regulations asso- understanding reserve evaluations. This seminar will present a ciated with drilling spacing units and target areas in Alberta and detailed discussion on the methodologies used when estimat- B.C., the implications of these and how they could impact a land- ing hydrocarbon reserves under various techniques such as man’s negotiations. Emphasis will be placed on reviewing existing Volumetrics, Tank Type Material Balance, Exponential Production regulations (including holdings) and the consequences of variation Decline and Analogy. The seminar will also briefly touch on from normal spacing units through practical problems. Information reserve estimates developed by hyperbolic and harmonic perfor- resource sources will be discussed, in addition to the implications of mance analysis as well as model studies. Participants will the Lahee Well Classification System and surface stakeholder consid- engage in a dialog on a number of rules of thumbs regarding erations. Dispute resolution mechanisms will also be discussed. the estimate of reserves and as reserves are the cornerstone of economic analysis, reference will be made to both asset and Alberta Crown Lease Continuation October 16, 2014 corporate economic assessments. 8:30 a.m. to 12:00 p.m. Professional Ethics: Theory & Application This seminar is intended for land personnel who are involved in October 21, 2014 8:30 a.m. to 4:30 p.m. the Alberta Crown Lease process. Technical personnel will also benefit from taking this course. An overview of the regulations This seminar is suitable for all interested land personnel and is and geological case studies governing lease continuation will be required for prospective CAPL members as well as CAPL’s profes- provided by instructors from the Alberta Department of Energy. sional certification program. This seminar is intended to increase the understanding of ethics and the dimensions to ethical behav- Oil Sands Tenure October 16, 2014 ior by stimulating the ethical thought process, providing a forum 1:00 p.m. to 4:30 p.m. for discussions with respect to land related ethical issues. Case studies will encourage class discussion and give each participant This seminar is intended for land personnel who require an insight into the morality vs legality question. THE NEGOTIATO R / OC TO BER 20 14 understanding and working knowledge of the current oil sands Land Acquisitions Freehold Mineral Secialists Surface Acquisitions Pipeline Right-of-Way Rental Reviews Damage Settlements Crown Sale Attendance Title Registration Potash Projects Wind Generation Projects Suite 201, 2629 – 29th Avenue Regina, Saskatchewan S4S 2N9 20 Geology October 22, 2014 8:30 a.m. to 4:30 p.m. October 23, 2014 8:30 a.m. to 4:30 p.m. This seminar is designed for oil and gas personnel that require a general understanding of geological prospect evaluation. Landmen, technologists and other personnel involved in written or oral communication with the geological department will benefit from attending this seminar. This two day seminar will provide an overview of geology as it applies to petroleum exploration in Canada. Workshops and exercises are an integral part of the seminar. The instructor will review the geological exploration tools, models and concepts as they apply to oil and gas exploration in Canadian sedimentary basins. Topics to be discussed include: Seeking Renewed Depth In A Land Services Provider? rocks and minerals, geological time scale, plate tectonics and reconstruction, development of hydrocarbon reservoirs and traps, the generation and entrapment of oil and gas and the historical geology of the Western Canadian sedimentary basin. The geological tools used in exploration and formation evaluation will be utilized throughout the seminar, including well cuttings, cores, wireline and geophysical well logs, drillstem tests, surface and subsurface maps and cross-sections. The integration of geological data with geophysical, land, engineering and other disciplines will also be discussed. Contract Administration: An Overview October 29, 2014 8:30 a.m. to 4:30 p.m. An overview of the mechanics required to compile and administer efficient land systems and controls will be presented. The daily expectations and responsibilities of the land administrator will also be discussed. Practical examples will be provided Integrity Runs Deep and a discussion of common problems will be encouraged. Topics include: role of the land administrator, the relationship between mineral leases and contracts, land survey systems, wells, common agreements (JOA, Farmout, Pooling, Royalty, CAPL 1990 Operating Procedure, PASC 1996), Notice of Assignment, terms used in the industry and check lists. Alberta P&NG Regulations October 30, 2014 8:30 a.m. to 4:30 p.m. This seminar is intended for land personnel who require an understanding and working knowledge of the Alberta Mines and Minerals Act and associated regulations as it relates to P&NG toll free: 1.877.998.1500 | www.integrityland.com tions for primary and continued leases; groupings and validation of licenses; registration of liens and transfers, surrenders, rentals, offsets; the P&NG sales process and trespass. 21 TH E NEGOTIATOR / OCTO BER 20 14 tenure. This seminar will cover the administration of continua- Contractual Issues Relating to Acquisitions and Divestments November 5, 2014 8:30 a.m. to 12:00 p.m. This seminar will focus on the legal aspects of the acquisition of oil and gas reserves and facilities. Special emphasis will be on emphasize situations and circumstances where fiduciary duties do and do not arise and the nature of these duties. Indian Oil & Gas Canada November 6, 2014 1:00 p.m. to 3:00 p.m. legal issues, such as the rights to deposit, basic tax issues, the treatment of effective date vs. closing date, conditions precedent, The session provides an overview of IOGC, the Indian Oil and consents, ROFRs, due diligence and indemnities. Gas Act and regulations, IOGC’s role in assisting First Nation develop their oil and gas, the two key approaches to negotia- Principles of Contract Drafting and Interpretation November 5, 2014 1:00 p.m. to 4:30 p.m. tions and a review of IOGC’s current sub surface and surface disposition processes, applicable federal legislation and regulator requirements. The principles of drafting and interpreting contracts that have evolved in case law over the years will be presented. In addition to reviewing case studies, the instructor will discuss the essential Geophysics for Non Geophysicists November 12, 2014 8:30 a.m. to 4:30 p.m. concepts in drafting and suggestions for improving essential parts This seminar will introduce the field of geophysics as it pertains of agreements. to hydrocarbon exploration in Western Canada. The instructor Fiduciary Duties November 6, 2014 will focus on a number of personal cases to exemplify the use 9:30 a.m. to 12:00 p.m. of seismic data. Simple in-class exercises will show some of the THE NEGOTIATO R / OC TO BER 20 14 limitations of seismic data in a cost-effective exploration program. 22 This half day seminar will focus on problem areas arising in Ownership issues and legal obligations of acquiring seismic data the context of both transactions and day-to-day operations. in Canada will also be introduced. Sample show and tell scenar- Case examples and court decisions specific to land related issues ios employing geophysics will demonstrate how the information will be presented and discussed. Specifically, this course will acquired in this course can benefit a non-geophysicist. Aboriginal Affairs November 13, 2014 Saskatchewan P&NG Regulations 8:30 a.m. to 12:00 p.m. November 20, 2014 8:30 a.m. to 4:30 p.m. This session is especially useful for those interacting with The seminar will provide an overview of the Saskatchewan Aboriginal governments, businesses and communities, and helps Petroleum and Natural Gas Regulations. Emphasis will be placed in building positive relationships to enhance effectiveness with on the land tenure system, lease continuation, posting and Aboriginal people. bidding on Crown Land. A question and answer period will follow the presentation. 2007 CAPL Operating Procedure November 18, 2014 8:30 a.m. to 4:30 p.m. 1990 CAPL Operating Procedure Boot Camp Nov 25 & 26, 2014 8:30 a.m. to 4:30 p.m. This one day course is an overview of the 2007 CAPL Operating Procedure focused specifically on the changes between the 1990 and This is a challenging interactive two day course in which partic- the new document. It is meant to enable personnel to appreciate ipants work through case studies on the 1990 and 2007 CAPL substantive differences between the 1990 and the 2007 documents. Operating Procedures in small work groups for presentation to the larger group. The case studies address subtleties of the Saskatchewan P&NG Regulations November 19, 2014 Operating Procedure in the context of issues that could easily 8:30 a.m. to 4:30 p.m. arise on files, so that attendees improve their understanding of those topics. The course is also designed to build the capability The seminar will provide an overview of the Saskatchewan Petroleum and Natural Gas Regulations. Emphasis will be placed on the land tenure system, lease continuation, posting and of attendees to assess and resolve Operating Procedure issues more generally. m bidding on Crown Land. A question and answer period will follow the presentation. OIL & GAS MINERAL RIGHTS & ROYALTY MARKETPLACE BUY • SELL • LEASE SEARCH 400+ PROPERTIES IN NORTH AMERICA OWNERS PUBLISH ADS FOR FREE BUYERS SUBSCRIBE TO VIEW 23 TH E NEGOTIATOR / OCTO BER 20 14 WWW.LISTMINERALRIGHTS.COM FOLLOW US. WE CAN GET YOU THERE. The Negotiator’s Message From the Board The core Communications Committee now consists of: Mark Innes, Anne Macedo, Jason Peacock, Krissy Rennie, Colin Taylor, and Kevin Young. This team THE NEGOTIATOR Th e M a g a z i n e o f t h e C a n a d i a n A s s o c i at i o n o f Pe t ro l e u m L a n d m e n September 2014 CAPL WELCOMES THE 2014 BOARD OF DIRECTORS puts in countless hours of volunteer time each month I would like to begin by saying thank you to all of the individuals that took the time to write an article for The Negotiator over the past year. The mandate of the to obtain and manage content, coordinate advertisements, and secure feature articles. I want to express my gratitude to Terminating a Freehold Oil & Gas Lease Difficult to Terminate Non-Producing Leases in Summary Judgment CAPL 2014 Freehold Lease New Changes to CAPL Lease Form CAPL Merit Awards Honouring Exceptional CAPL Members & Individuals 20229_CAPL_September2014_Negotiator | Cyan Magenta Yellow Black | 27-AUG-1414:20:14 these Committee members as well as the other individuals of our Communications Portfolio is to keep team including: each of the proofreaders, the editors listed on the CAPL membership informed, on a timely basis, of ongoing the inside front cover of every Negotiator issue, as well as McAra activities and initiatives both within the CAPL and in industry Printing, and Rachel Hershfield of Folio Creations. in general. This is something that could not be accomplished Education and diversity of articles has been a key focus of without the time and effort our writers put into each article. The Negotiator over the past year. Since October 2013 we have had All of the feature articles within The Negotiator are written by indi- pieces on tenure regulation changes, unconventional reservoirs, viduals willing to share their knowledge and expertise with the water use, License Liability Rating, First Nations consultation, Association and their volunteer efforts help educate us all. The Unitization and EOR schemes and a variety of other topics. CAPL membership is diverse and comprised of individuals with Over the next year, be on the lookout for a quarterly M&A unique experiences, backgrounds, and specialties. If you have feature that will highlight industry transactions and deal metrics. knowledge of a particular industry trend, regulatory change, or Additionally, we hope to continue our relationship with the any other topic you feel should be shared with the CAPL member- PJVA and receive articles on an array of topics. For a look-back ship please consider giving back to the Association and writing an or keyword search for any articles published in The Negotiator article for The Negotiator. Submission Guidelines for The Negotiator please visit the CAPL website where archived issues dating back can be found on the CAPL website. Please keep in mind that the to January 2000 can be found. Finally, I would like to remind submission deadline is typically five (5) weeks prior to publication. our members that they can elect to receive only the electronic While educational and thought provoking articles contrib- version of The Negotiator. Should a member wish to only receive ute to the success of The Negotiator, the magazine would not be the electronic copy and no longer receive a paper copy, they possible without the efforts of the strong volunteers within the simply need to make this election by updating their profile on the Communications Committee. Paul Cooper, Jared Frese, and Mark Horne were three long-term volunteers with the Communications CAPL website. m Committee that have recently moved on to contribute their volun- Brad Reynolds teer efforts elsewhere and I would like to thank each of them for their Director, Communications THE NEGOTIATO R / OC TO BER 20 14 dedication and great work while they were with our Committee. HMA Land Services is now RPS HMA. At RPS HMA we place significant value on developing and maintaining excellent relationships with our clients and industry partners. Our team is dedicated to providing the same level of professional service, reliability and expertise that our clients have come to expect from us. Toll Free (866) 412-5263 Pipeline Exploration & Production ( E&P) Telecom Power 24 www.hmaland.com | www.rpsgroup.com Roster Updates New Members The following members were approved by a Motion on September 9, 2014: Mark MacKay Applicant Current Employer Sponsors Active Shell Canada Energy Linda Edmunds Kristin Rennie Kevin Walz Matthew Rasula Husky Oil Operation Dan Halper Colin Taylor Limited Zvonko Rimac Jeremy Wallis Ryan B. Thompson Aryn Flette Jennifer Ho Robert Bodzioch TORC Oil & Gas Ltd. Shaun Cooper Crescent Point Energy Corp. Craig Stayura Joe Swift Nina Gesell TAQA North Ltd.Ann Janicki Cari Williams Shelley Wilson Todd Girbav McNally LandTerry Cutting Services Ltd. David Savage, P.Land Robert Telford, P.Land, PSL Jordan Kersch Apache Canada Ltd. Associate Fabio Marson SarPointMandy Ediger Engineering Ltd.Aaron Giovanetto Keely O’Neil Trevor Rose ConocoPhillips Canada John Miele Bruce Robertson Bill Schlegel, P.Land Colin Szopa XI Technologies Inc.Garrett Laudel Wayne Ellis Craig Stayura Wayne Geddes, P.Land Jared Tchir Brad Johnston LandLine Divestco iLand and LandRite Together at Last Contact us today to learn more about our surface land data pipeline. 587.952.8000 | [email protected] | www.divestco.com 25 TH E NEGOTIATOR / OCTO BER 20 14 LandLine transfers iLand sub files and crossings that you acquire directly into LandRite’s surface files and third party agreements. Student Independent to Taddun Land Consultants Inc. Darrell Boldon University of OklahomaSteve Long Evan Bowers-McCaw Olds CollegeTara Lloyd Amber Elie Athabasca Oil Sands Corp. Shannon Eastcott Mount Royal University Jillian Philpott to Independent Kimberly Folkins Mount Royal University Jillian Philpott Dorothy Else DDSB Consulting Ltd. Dylan Johnson University of CalgaryRobert Schulz to PanTerra Resources Corp. Joshua Lewis Mount Royal University Mayank Parmar Mount Royal UniversityAndrea Gill Chris Hillebrand Sunshine Oilsands Ltd. Steve Sawa Mount Royal UniversityKimberly Dirven to SunOcean Energy Ltd. Alexandre Ste-Marie University of CalgaryRobert Schulz Mike Macdonald Apache Canada Ltd. to ARC Resources Ltd. Marshall McCarthy, PSL Bellatrix Exploration Ltd. to Independent Natalie Taylor Jillian Philpott Mount Royal UniversityAndrea Gill On the Move THE NEGOTIATO R / OC TO BER 20 14 Dennis Eisner, P.Land m Brad Campbell Pengrowth Energy Corporation Len Moriarity, P.Land Crescent Point Energy Corp. to Independent to Jupiter Resources Inc. Dali Courtright Crescent Point Energy Corp. Bruce Murray Tydyl Holdings Ltd. to Independent to Powder Mountain Energy Ltd. Helmut Eckert, P.Land Crocotta Energy Inc. Karen Riep Independent to Leucrotta Exploration Inc. to Indian Oil and Gas Canada LANDGROUP LANDGROUP [email protected] [email protected] www.traverselandgroup.com www.traverselandgroup.com Calgary Calgary | 260, | 260, 68156815 8 St.8NE, St. Calgary, NE, Calgary, AB TAB 2E T7H7 2E 7H7 403.265.1050 403.265.1050 Sedgewick Sedgewick | 4911 | 4911 48 Ave., 48 Ave., P.O. P.O. Box Box 36, Sedgewick, 36, Sedgewick, AB T0B AB T0B 4C0 4C0780.384.3565 780.384.3565 Grande Grande Prairie Prairie | #101, | #101, 10419 10419 99 Ave., 99 Ave., Grande Grande Prairie, Prairie, AB T8V AB T8V 0S4 0S4 780.532.7630 780.532.7630 26 Rich Rowe Manitok Energy Inc. to PanTerra Resources Corp. Joanne Sipka, P.Land Independent 30, 2014 at the age of 85 years. John was born in Regina and after to Jupiter Resources Inc. graduating from high school he attended McGill University where Rhonda Trautman CanEra Energy Corp. to Independent Brittney Walchuck Independent to Koch Oil Sands Operating ULC Aaron Williams Crescent Point Energy Corp. Association of Petroleum Landmen). John was proud to be a to Rolling Hills Energy Ltd. member of the CAPL for over 60 years. Kim Young CanEra Energy Corp. to Crescent Point Energy Corp. Wiley Zimmerman Cheveyo Energy Inc. to Independent John Gareau The CAPL announces the recent passing of John Gareau on July he received a Bachelor of Science degree. He then began a long and successful career as a landman and executive in the oil and gas industry, initially in Regina and then in Calgary, with a two-year period in Houston. While living in Regina, John became a member of the Saskatchewan Landmen’s Association in 1953 (which eventually became the Canadian John is survived by his wife Ethelene and several other family m members. He will be missed by all those that had the opportunity to know him. Brian Williams The CAPL announces the recent passing of Brian Williams on August 8, 2014 at the age of 67 years. Brian attended the University In Memoriam of Alberta where he received a degree in Business and Commerce. He began his career in the oil and gas industry shortly after graduating and became a member of the CAPL in 1983 while he was employed at Dome Petroleum Limited. During his career, Brian Gary Aitken worked in many oil and gas companies and eventually moved The CAPL announces the recent passing of Gary Aitken on August from Calgary to Edmonton. 12, 2014 at the age of 72 years. Gary was born in Edmonton and Brian is survived by his wife Cynthia Rothwell and several attended the University of Alberta where he received a degree in other family members. He will be missed by all those that had the Commerce. In 1967 he began his career in the oil and gas industry in Calgary and became a member of the CAPL in 1968. In April of opportunity to know him. m 2014, Gary proudly received his forty-five year CAPL pin. He also received his Professional Landman (P.Land®) designation in 1988. Gary is survived by his wife Judy, his daughters Jill Rossi (Ken), Laura Metcalfe (Darryl) and his son Ross (Kirsteen), as well as several other family members. He will be missed by all those that had the opportunity to know him. w w w. p r o g r ess l a n d . c o m 12831 – 163 Street, Edmonton, Alberta T5V 1M5 27 TH E NEGOTIATOR / OCTO BER 20 14 1.866.454.4717 Scott Land & Lease Junior Landman Charity Golf Classic A big thank-you to everyone that joined us this past June for another successful tournament. For anyone that could not make the event, we welcome you to check out the Photos tab on our website www.jrlandmanclassic.ca. To date we have raised $40,000 and are on pace to surpass our goal of raising $50,000 for the PLM Endowment fund by next year. We could not have done this without our sponsors support so please take the time to review our Sponsors Page on the website listed above. The team of volunteers pulled off another great tournament so thankyou to the following people for organizing this year’s tournament: Brad Johnston, Wayne Ellis, Garrett Laudel, Ryan Gillen, Brittney Walchuck, Danielle Suchan, Sean Weld, and Akash Asif. We look forward to seeing everyone in June 2015! THE NEGOTIATO R / OC TO BER 20 14 Josh Wylie 28 m WESTERN CANADA LAND SALE and DRILLING RIG REVIEW August 2014 Land Sale Data 5,000.00 BriƟsh Columbia Alberta Saskatchewan AREA Manitoba BC 4,500.00 AB - Foothills 4,000.00 3,500.00 Average $/Ha 3,000.00 Total Ha Sold Average $ / Ha 7,737 $387 9,792 $426 AB - Plains 17,339 $394 AB - Northern 58,814 $1,250 SK 25,263 $1,916 2,334 $88 MB NOTE: Numbers are rounded 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0.00 Drilling Report for Last 5 Years Drilling Rig UƟlizaƟon Rate 70% 60% 50% 900 800 40% 700 600 Drilling 500 Down 400 Total 300 Total Down Drilling 200 100 0 August 2009 August 2010 August 2011 August 2012 August 2013 August 2014 30% UƟlizaƟon Rate 20% 10% 0% August 2009 August 2010 August 2011 August 2012 August 2013 August 2014 THE EXPERTS IN LAND ACQUISITION AND MANAGEMENT SERVICES. LandSolutions LP #200, 601 - 10 Ave SW Calgary, AB T2R 0B2 1-866-834-0008 www.landsolutions.ca 2014 CAPL Golf Tournament beverages and even a tasty Spolumbo Burger. Coming off the course our membership convened inside with a beer garden sponsored by Gowlings and a fantastic dinner with support from Universal Surveys and Progress Land. Dee Three again made a generous donation to provide wine to complement the meal. The staff at Heritage Pointe ensured that dinner ran smoothly and CAPL once again held their annual golf tournament at Heritage Pointe Golf Club on August 21st this year and was once again provided exceptional service. Prizes were distributed hosted by title sponsor geoLOGIC. Our players were met by many support. It is through their generous contributions that we are able familiar faces at the registration desk receiving coffee & Baileys to keep entry fees down, provide breakfast, baileys and coffee, on from Davis LLP and a new pair of stylish Nike golf shoes courtesy course refreshments and snacks, beer gardens, dinner with wine of our friends at Standard Land. Golfers could grab a breakfast and lots of great prizes. This tournament would not have been sandwich (or two) courtesy of Lexterra with the opportunity to possible without the contributions of all our sponsors and member- meet with former touring professional Richard Zokol. As an added ship support. A full listing of all our sponsors can be found below. worthy cause in the Canadian Red Cross – Flood Relief Fund. Thank you to all of our other sponsors for their continued A special thanks to the chair of the committee Craig Stayura Golf Course in Vernon, BC and the chance to win a fantastic golf for shouldering the load on organizational duties. And last but package. The charity putting contest presented by XI Technologies not least the relentless efforts of the Golf Committee: Alayne benefiting Spokes for Little Folks went off on the putting green Fernquist, Cam Urquhart, Craig Thomas, Dave Boisjolie, Kristen and the relaxed atmosphere encouraged catching up with old Dublonko, Lawrence Fisher, Len Moriarity, Jeff Talbot, Garrett Zokol friends and even a little bit of focused networking. As the golf- and Trevor Burke. conditions did not deteriorate too much and golfers were kept dry in their carts sponsored by Can Am Geomatics. Scores were low for our sandbagging members and the rest of us were kept happy and refreshed with a variety of snacks, We will see everybody again next August for the 2015 CAPL Golf Tournament at Heritage Pointe Golf Club. m Jeff Talbot CAPL Golf Tournament Committee Member Title Sponsor Dinner Sponsors Nexen Birchcliff Energy geoLOGIC Universal Surveys Group Integrity Land Inc. PNG Exchange Ltd. Progress Land Services ConocoPhillips Canada Resources Corp. Lawson Lundell CORE Geomatics All-Can Engineering Golf Ball Sponsor Steward Weir Legacy Oil & Gas Shell Canada Limited Millennium Geomatics McElhanney Land Surveys Tee Gift Sponsor Standard Land Charity Putting Green Sponsor Shell geologic Systems XI Technologies Inc. Wine Sponsor Caltech Surveys IHS Dee Three Exploration Ltd. Precision Geomatics Midwest Surveys Crescent Point McMillan Water Sponsor Divestco Integrated Geomatics Divestco PanTerra Resources Corp. Pandell LW Survey Canada Enerplus Beer Garden Sponsor Gowlings LLP Baileys & Coffee Sponsor Davis LLP Prize Sponsor Standard Land Hole Sponsors Sinopec Daylight Vertex Britt Land Services Contributors Land Solutions Synergy Land Services Petroland Services Compass Geomatics Lighstream Resources Cart Sponsor Action Land Sayer Securities Scott Land & Lease Can-am Geomatics Nuvista Oil and Gas Index Focus Prospect Land Services P2 Energy solutions Altus Geomatics Direct Energy THE NEGOTIATO R / OC TO BER 20 14 Energy. This year’s mulligan draw saw nearly $2,500 donated to a bonus every golfer was offered gift certificates to Predator Ridge ers hit the course the rain started to sprinkle but thankfully the Breakfast Sponsor Lexterra Land Ltd. 30 to the lucky winners in part thanks to sponsorship from Direct The Social Calendar Event DATE TIME LOCATION COST (INCLUDING GST) CONTACT NAME CONTACT PHONE CONTACT EMAIL REGISTRATION DEADLINE CAPL Oktoberfest Charity Land Social Networking Night 9-Oct-04 4:30 PM The National on 10th $60.00 Christopher Ellis (403) 817-4586 [email protected] 9-Oct-14 CAPL October General Meeting 15-Oct-14 11:30 AM The Westin $31.50 for Student Members $63.00 for non-Members Karin Steers (403) 237-6635 [email protected] 9-Oct-14 CAPL November General Meeting 13-Nov-14 5:00 PM The Westin $52.50 for Student Members $105 for non-Members Kaitlin Polowski (403) 237-6635 [email protected] 6-Nov-14 * Please note: Registration forms can be downloaded from the CAPL website: General Meetings: http://landman.ca/events&meetings/general_meetings.php Social: http://landman.ca/events&meetings/social_events.php “SKY’S THE LIMIT” Servicing Alberta and Saskatchewan since 2001 Branch Office: 18008 – 107 Avenue Edmonton, Alberta T5S 2J5 Toll Free: 1-855-425-2530 www.actionland.ca Surface Acquisition EAP First Nation Consultation Rental Reviews Environmental Assessments 31 TH E NEGOTIATOR / OCTO BER 20 14 Corporate Office: Box 20096, Kensington P.O. Medicine Hat, Alberta T1A 8M4 Toll Free: 1-866-528-2558 [email protected] CAPL Calendar of Events October 1 Wednesday 1 2 6 7 7 8 8 9 9 13 14 15 15 15 16 16 20 21 22, 23 29 29 30 Wednesday Thursday Monday Tuesday Tuesday Wednesday Wednesday Thursday Thursday Monday Tuesday Wednesday Wednesday Monday Thursday Thursday Monday Tuesday Wed-Thurs Wednesday Wednesday Thursday November 4 Tuesday 5 5 5 THE NEGOTIATO R / OC TO BER 20 14 5 6 6 11 12 13 18 19 19 20 25, 26 27 32 Alberta Land Sale British Columbia P&NG Regulations British Columbia Surface Rights (PSL®) Saskatchewan Land Sale Board Meeting Fundamentals of Surface Agreements (PSL®) British Columbia Land Sale Professional Ethics: Core Values Fundamentals of Oil and Gas Law Charity Event Thanksgiving Freehold Mineral Lease Alberta Land Sale Well Spacings and Holdings CAPL General Meeting Alberta Crown Lease Continuation (am) Oil Sands Tenure (pm) Understanding Reserve Evaluations (am) Professional Ethics: Theory and Application Geology Alberta Land Sale Contract Administration: An Overview Alberta P&NG Regulations m Board Meeting Wednesday British Columbia Land Sale Wednesday Manitoba Land Sale Wednesday Contractual Issues Relating to Acquisitions and Divestments (am) Wednesday Principles of Contract Drafting and Interpretation (pm) Thursday Fiduciary Duties (am) Thursday Indian Oil & Gas Canada (pm) Tuesday Remembrance Day Wednesday Geophysics for Non Geophysicists Thursday Aboriginal Affairs (am) Tuesday 2007 CAPL Operating Procedure Wednesday Alberta Land Sale Wednesday Saskatchewan P&NG Regulations Thursday Saskatchewan P&NG Regulations Tue-Wed 1990 CAPL Operating Procedure Boot Camp Thursday Drilling and Production Operations m October Meeting October 15, 2014 Speaker: TBD Lunch: 11:30 a.m. Where: The Westin 320 4 Avenue S.W. Cost: Members: No Charge Guests: $63.00 (Includes GST) Student Members: $31.50 (Includes GST) All student members and guests will be required to purchase a ticket. Registration form is available on the CAPL website. Email responses to Karin Steers at [email protected]. Please purchase tickets prior to noon on October 9, 2014. m November Meeting November 13, 2014 Speaker: TBD Dinner: 5:00 p.m. Where: The Westin 320 4 Avenue S.W. Cost: Members: No Charge Guests: $105.00 (Includes GST) Student Members: $52.50 (Includes GST) All student members and guests will be required to purchase a ticket. Registration form is available on the CAPL website. Email responses to Kaitlin Polowski at [email protected]. Please purchase tickets prior to noon on November 6, 2014. m NOW LAND ACQUISITION AND ENVIRONMENTAL SERVICES CAN FOLLOW THE SAME PATH. The experts in Land Acquisition offer Environmental Services as well. Imagine that. An A to Z solution that is far more efficient and effective, making your life so much easier. Your experts are standing by. Call 403-290-0008 or visit landsolutions.ca Trust your Surface Land Project to the Professionals at Scott Land! Left to Right: Celeste Farrow, Maureen Gieg, Terry Wark, Todd Plandowski, Lorne Pudsey. Scott Land is a leader in the Surface Land industry acquiring more Crown and freehold surface land each year than any other firm. We are known for our highly experienced surface land team located in 7 full-service offices across Western Canada. We have handled some of the industry’s most demanding and complex projects in all regions including large drilling projects, facilities, sour gas, oilsands, stakeholder engagement and pipelines of all sizes. We charge from our closest office to your project. Our Project Managers ensure a smooth acquisition and administration process for you. Calgary Edmonton Grande Prairie Our competitive advantages are many: stellar service, trusted experience, strategic advice, proven processes, solid reputation, local relationships, technical knowledge, quality administration, community involvement and competitive rates. We have our own in-house First Nations consultation team and an alliance with an environmental company for one-stop service. The stakes are high, use the best land company you can to ensure your project moves forward successfully. Have a talk with one of the professionals at Scott Land about your next project. Fort St. John Suite 900, Bow Valley Square 1, 202 – 6 Avenue SW, Calgary, Alberta, T2P 2R9 SLL Negotiator Ad 2014-10.indd 1 Lloydminster Regina Saskatoon Ph: 403 261 1000 www.scottland.ca 2014-09-12 11:25 AM
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