DORIN LAND AND OILFIELD MANAGEMENT INC.
9760 60 Ave, Edmonton
Alberta, Canada T6E 0C5
Telephone (780) 430-0840
Fax (780) 430-0367
[email protected]
March 12, 2015
Government of Alberta
Alberta Infrastructure
Anthony Henday Drive Transportation Utility Corridor
Main Infrastructure Building
6950 – 113 Street
Edmonton, Alberta, T6H 5V7
VIA E-MAIL
Attention: Mr. Art Becker
Dear Sirs:
Re:
Armisie Oil Field Oil Tank Battery Licence No. F-20254 and Related Access Road
S.W. and S.E ¼ of 4-52-25 W4M
Anthony Henday Drive TUC Corridor at 184th Street, Edmonton
Further to the recent telephone conversation between Mr. Art Becker and Mark Dorin in respect
of the above and other matters, we write for the following purposes:
1. To seek an easement across Crown lands within the subject TUC corridor, along a road
alleged to be leased by Penn West Petroleum Ltd. (“Penn West”) for access to lands
lying immediately adjacent to the south, and to open discussion in such regards.
2. To provide information in respect of trespass allegations as to the following:
a)
An alleged surface lease agreement with effective date of January 1 1962:
Lessor:
Lessee:
Initial Term:
Extension:
Caveat:
Dr. William Sloane Seale (W.S.S.) Armstrong
Armisie Oil Company Limited
Ten (10) years (pursuant to paragraph 1)
Ten (10) years (pursuant to paragraph 5(a))
937UY.
Surface Area Leased and Granted: That area defined in paragraph 1 of said
lease agreement, quoted below:
“…all and singular those parts and portions of the land …shown
coloured in orange, brown and yellow upon the plan hereto annexed and
marked “A” (hereinafter referred to as “the leased lands”) for use of the
Lessee in connection with the operating of petroleum, natural gas and
related hydrocarbon wells on the above described lands to be held by the
Lessee as tenant for the space of ten (10) years from the date hereof
renewable as hereinafter provided.” [Underline emphasis added.]
The above-described alleged surface lease is referred to herein as the “Armstrong
Lease” and appears to relate to Crown lands including TUC lands.
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
Armisie Field Issues
Section 4-52-25 W4M
March 12, 2015
b)
c)
The fact that said Armstrong Lease expired on its term no later than December 31,
1981, in which case Penn West is trespassing unless:
(i)
the owner of the lands granted a new right of entry; or,
(ii)
the operator obtained a new right of entry pursuant to a right of entry order
issued by the Surface Rights Board.
The fact that Caveat No. 937UY contains as Schedule “A” thereto:
(i)
d)
a copy of the Armstrong Lease (absent said appended plan of survey marked
“A” setting out “the leased lands”) (attached).
The fact that said oil sour tank battery (including a gas compressor and emergency
sour gas incinerator stack) is situated:
(i)
as to the north portion (some 1.27 acres) on Crown land (“Battery North);
(ii)
as to the south portion (some 1.31 acres) on lands we manage, owned by nine
persons comprising the Braun et al ownership group (“Battery South”); and,
(iii) less than 800 metres from the centre of the Anthony Henday Drive / 184
Street or Cameron Heights Drive overpass major intersection.
3. To advise that an abandoned well, Licence No. 3291, Well Name Armisie No. 3, illegally
licenced, exists within the Anthony Henday Drive TUC at 11-4-52-25 W4M.
The Licensee of record is still Armisie Oil Company Limited, which company was struck
from the corporate record in 1964. The statutory scheme in Alberta is no person is
entitled to hold a well drilling licence that is not a corporation in good standing and does
not possess the underlying minerals or a right to such minerals or to work them. Armisie
Oil Company Limited sold its rights in the subject freehold minerals (previously owned
by Dr. Armstrong, now owned by the beneficiaries of his estate) under a mineral lease to
Denison Mines Limited circa August 24, 1962 (Penn West claims to be a successor in
interest to such companies, which formerly possessed the right to the minerals).
4. To advise that Penn West claims a right of entry to the Battery South surface area, as well
as to two well sites, various access roads, and numerous pipeline areas on Braun et al
lands, pursuant to another alleged surface lease also dated January 1 1962, allegedly
amended as at circa February 4, 2004, described below:
Lessor:
Lessee:
Term:
Caveats:
Frank S. Lieber
Armisie Oil Company Limited
As long as production being taken pursuant to a freehold mineral
lease dated October 20, 1951
6577MS, 725VA, and formerly 4404MT (recently withdrawn).
(Herein the “Lieber Lease”).
Satellite images with the issues above illustrated upon such images and two plans of survey have
been provided as visual aids.
2
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
Armisie Field Issues
Section 4-52-25 W4M
March 12, 2015
Armstrong Lease Issues (Crown Land Including TUC Lands)
Item 2(b) above is the most straightforward:
1. The Crown is the successor in interest to Dr. Armstrong under the Armstrong Lease.
2. If in fact Penn West continues to rely on the Armstrong Lease as the legal instrument
providing a legal surface right of entry to Crown lands, Penn West is patently trespassing
in the regards, and for the reasons, stated in Item 3 below.
3. The Armstrong Lease expired decades ago. Therefore, if no new surface lease has been
put in place, Penn West is patently trespassing on Crown land, and is patently
trespassing:
a) as to allegedly regulatory non-compliant oil tank battery operations partially on
Crown lands and partially on Braun et al lands; and,
b) to reach well sites to the south on Braun et al and Singh lands.
4. A decision of the Surface Rights Board rendered in 2007, in the matter of Penn West
Petroleum v. Singh, 2007 CanLII 81479 (ABSRB), clearly set out that Penn West relied
on a surface lease with effective date of January 1, 1962 as the legal instrument relied on
by Penn West to claim a legal right of entry.
No Plans of Survey to Set Out Leased Surface Area Appended to Lease Agreements
For a lease agreement to be valid and legally enforceable pursuant to contract law and the Land
Titles Act, certain minimum requirements must be met. Not the least of such requirements is the
agreement must adequately describe, in writing, the leased lands or the portion of the overall
lands granted and leased by the lessor to the lessee.
Penn West has repeatedly admitted, since circa November of 2012, that it cannot produce plans
of survey in respect of three surface leases related to the S.W. and S.E. quarters of the subject
Section 4. Therefore, the possibility that the three surface leases Penn West relies on have never
provided the necessary legal rights of entry is not only real, such possibility could well be a legal
fact.
We strongly believe, a reasonable inference drawn after a three-year investigation of hundreds of
documents and consideration of many known surrounding facts, that:
1. the Armstrong Lease and Lieber Lease were drawn up circa August of 1962 and
backdated to January 1, 1962 (because of a surface rights sale in November of 1964);
and,
2. a certain plan of survey dated August 2, 1962 (attached), was commissioned by Armisie
Oil Company Limited, and was to be marked “A” and appended to the Armstrong Lease
and the Lieber Lease:
a) with the Armisie No. 1 battery site coloured in orange;
b) with various well sites and access roads coloured in red, green, brown and yellow.
3
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
Armisie Field Issues
Section 4-52-25 W4M
March 12, 2015
The August 8, 1962 Plan of Survey
Our firm belief set out in Item 2 immediately above derives in part from:

a plain reading of paragraphs 1 of the Armstrong Lease and Lieber Lease quoted below;

the fact that two existing photocopies of the plan of survey dated August 8, 1962 show
shading, in various shades of black and white (grey), applied to the plan of survey; and,

the facts that affidavits of signatures related to the Armstrong Lease and Lieber Lease are
dated in late August of 1962, which date corresponds to the date the well sites and battery
were sold by Armisie Oil Company Limited to Denison Mines Limited (well documented
in well licencing records of the AER).
The related verbiage of the Armstrong Lease reads, in respect of the surface rights granted by the
owner Dr. Armstrong and leased:
“…all and singular those parts and portions of the land …shown coloured in
orange, brown and yellow upon the plan hereto annexed and marked “A”
(hereinafter referred to as “the leased lands”),”. [Underline and bold emphasis added.]
The related verbiage of the Lieber Lease reads, in respect of the surface rights granted by Frank
Lieber (not a surface owner) and leased:
“…all and singular those parts and portions of the land …shown coloured in red,
orange, and green upon the plan hereto annexed and marked “A” (hereinafter
referred to as “the leased lands”),” [Underline and bold emphasis added.]
One can reasonably infer the original copy of the black and white August 8, 1962 survey
attached was coloured in orange as to the Armisie No. 1 battery site, and in the other colours
signifying other areas, to enable use of one plan of survey associated with two surface lease
agreements.
Therefore, if the Crown is not in possession of a plan or sketch marked “A” appended to the
Armstrong Lease, Penn West need to either concede that the August 8, 1962 plan of survey sets
out “the leased lands” defined in the the Armstrong Lease and the Lieber Lease, or concede
trespass since at least January 1, 1962, if not since the first wells were drilled in 1951.
Other Problems Associated with the Armisie Sour Oil Tank Battery
As Mr. Becker was recently advised by telephone, a multitude of licencing, safety, and
regulatory non-compliance issues remain in dispute between Penn West and the Braun et al land
surface owners and occupants, a situation that has worsened, rather than improved, over the past
three years.
A sour oil tank battery is not to be located within 800 metres of the intersection of two major
highways. Plans are for 184th Street to connect with 23 Avenue and be a main artery. The
distance from the Armisie Battery to the centre of the overpass is some 745 metres.
Penn West has been fully and repeatedly advised, but refuses to take action to restore legality
and safety in respect of its various operations within the S.W. and S.E quarters of 4-52-25 W4M.
4
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
Armisie Field Issues
Section 4-52-25 W4M
March 12, 2015
Similarly inspectors employed by the former Energy Resources Conservation Board (“ERCB”),
a tribunal which no longer exists (the Alberta Energy Regulator now possesses the ERCB’s
former jurisdiction plus additional mandates), have repeatedly been advised of various problems,
but have taken few actions to ensure regulatory compliance, and/or that minimum human and
environmental safety standards are being met in respect of Armisie Field operations.
It would appear that various formal applications to board members of the Alberta Energy
Regulator (“AER”) and/or the courts may be necessary to restore land rights and regulatory
compliance. It would appear AER inspectors believe they lack the necessary jurisdiction to
intervene and/or thoroughly investigate numerous problems and fact-based allegations.
Many of the unresolved issues are technical in nature. One must have a thorough understanding
of the overall statutory scheme, which is extensive and somewhat over-complicated, plus at least
basic oil and gas operational knowledge, to fully appreciate how many risks Penn West has
failed to identify and mitigate. We can only surmise Penn West management, executives, and
legal counsel, and perhaps AER inspectors, lack the necessary basic oil and gas knowledge and
experience to recognize the numerous operational risks, and shut down or otherwise mitigate
operational risks creating unacceptable levels of risk to the public and the environment.
Under Alberta law, in respect of sites where oil storage tanks and other sources of ignitable
vapours exist (in this case the emergency incinerator stack), one party alone – the operator or
licensee – is responsible to enforce the applicable regulations. Put bluntly, Penn West is in
essence required by law to self-police itself, but is failing to fulfil its legal obligations.
Such responsibility arises from Section 8.090(10) of the Oil and Gas Conservation Rules, AR
151/1971, which reads:
“(10) Each licensee of a well or operator of a facility at which there is located an oil
storage tank or other source of ignitable vapour shall enforce the provisions of this
section.”
The AER, which authority has the sole mandate to audit and inspect oil and gas operations to
ensure regulatory compliance, is similarly failing in carrying out its mandate if such authority is
aware of the problems.
Therefore, formal applications to the AER under Section 42 of the Responsible Energy
Development Act, to review, amend, suspend, or rescind licencing decisions, will almost
certainly be required to restore safety and to determine if AER Board members, who clearly
possess authority and have responsibilities AER inspectors may not be charged with, will enforce
the laws of Alberta and restore safety to the greater area.
Trespass Issues
The road on Crown land leading to the battery and well sites is the only access to Braun et al
lands. Penn West has provided permission for the Braun owners and occupants, and our
employees, to use such road. However, one cannot legally grant to another that which one does
not legally possess. An easement or permission to enter upon Crown lands is therefore
requested.
5
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
Armisie Field Issues
Section 4-52-25 W4M
March 12, 2015
The AER believes it has no jurisdiction to shut down oil and gas activities when an operator
possesses no legal right of entry to the surface of Alberta land, which are matters governed by
the Surface Rights Act.
With the greatest of respect, we do not necessarily share such an interpretation of the overall
statutory scheme. We simply face up to the fact that it is very unlikely that the AER will chance
exceeding its jurisdiction in such regards.
Therefore, unless Penn West cures its various trespasses, applications to the Alberta Surface
Rights Board for trespass damages, and/or applications made to the courts requesting the courts
to declare the obvious – that surface leases expired long ago and are invalid – will be required.
What Penn West is doing, in essence, is daring the Braun et al landowners, if not also the Crown,
to file formal applications, and hoping no Armisie Field surface owner actually does so, in order
that Penn West may continue to illegally and unsafely operate next to the busy Anthony Henday
Freeway.
Against such a pernicious concept we resolutely set our face. We ask the Crown to join us in
demanding that an Alberta operator live up to its responsibilities under the law, and that Alberta
authorities charged with administrative law responsibilities similarly do so.
For orientation purposes, we attach a 2003 Individual Ownership plan by a survey commissioned
at that time by Petrofund Energy Trust (a company amalgamated into Penn West). In such
survey:



Crown lands are shown outlined in shades of green and yellow;
Braun et al lands are outlined in blue; and,
Singh lands are outlined in shades of pink and purple.
We trust this will open up further dialogue on a number of highly important issues and how best
to resolve them, to belatedly eliminate risks to loss of human life in the greater area.
Yours truly,
DORIN LAND AND OILFIELD MANAGEMENT INC.
Original signed by
Mark Dorin
President
Attachments:
1.
2.
3.
4.
Copy of the Armstrong Lease (Source, Exhibit “A” to Caveat No. 938UY)
Satellite Images of the greater area (the lands and overpass nearby)
Satellite Image of alleged leased areas, particularly Battery North and Battery South
Plan of Survey dated August 8, 1962. Allegedly that plan commissioned to be appended
to the Armstrong Lease and Lieber Lease.
5. 2003 Compiled Plan Showing Leased Area and Landowners
6
RESIDENTAL AND OIL AND GAS DEVELOPMENT CAN CO-EXIST
FIGURE 1A: Satellite Image, Armisie Field Area. September 24, 2013
Section 4-52-25 W4M, in Edmonton, Alberta.
NOTE
Section 4-52-25 W4M
Permits and approvals are required for:


A sour oil tank battery within 800
metres of the intersection of two
major highways (from Alberta
Infrastructure); and,
Oil and gas surface operations in
environmentally sensitive areas,
(from Alberta Environment).
Section 5
52-25 W4M
15 16
13 14
12 11
Penn West Petroleum Ltd. claims to lease
the entire surface area the majority of
LSD 5, 6, 7 and 8, of Section 4-52-25 W4,
a claim disputed by the surface owners
said by Penn West to have granted such
lease (pursuant an alleged surface lease
amendment agreement effective February
4, 2004).
745 Metres
10 9
ENVIIRONMENTAL
RESERVE
The issues are numerous and in dispute.
Four issues illustrated by Figure 1A at
right are:
 Did Penn West obtain the
necessary approval from Alberta
Infrastructure to modify the Armisie
No. 1 battery circa 2001?
7 8
5 6
7 8
2 1
4 3
2 1
 Did Penn West obtain the
necessary approval from Alberta
Environment to lease the surface
area in LSD 7 and 8 designated
environmental reserve, pursuant to
its claims?
Section 33-51-25 W4M
 Should environmental restrictions
or protection orders be issued for
the above and several other
reasons?
 Why is EUB Decision No. 2005-085
silent as to consideration of such
issues (the decision was to grant
Licence No. 335815 for a well with
surface at 7-4 in 2005)?
13 14
15 16
12 11
10 9
2 FIGURE 1B: Satellite Image, the Sites of Armisie Field. South Half of 4-52-25 W4M, and North Half of 33-51-15 W4M. September 24, 2013
In Edmonton, Alberta.
Armisie No. 1
Oil Tank Battery and Gas Compressor
7-4 Multi-Well
(4) Site
(2 active)
6-4 Well Site
5 6
7 8
4 3
2 1
3-4 Multi-Well
(6) Site
South 1/2 Section 4-52-25 W4M
North 1/2 Section 33-51-25 W4M
13-33 Multi-Well
(4) Site
13 14
15 16
12 11
10 9
3 FIGURE 1C: The January 1, 1962 Surface Leases of Armisie Field (Appendix D). INTERPRETATION SCENARIO 1.
Caveat Nos. 6577 MS (Dunn Holdings), 938UY (Armstrong), 725VA, (Braun et al)
In Edmonton, Alberta.
ALL ACREAGES STATED ARE PATENTLY ASSUMPTIONS, RELIED ON IN PAYMENT OF ANNUAL COMPENSATION AND TWO SURFACE RIGHTS BOARD DECISIONS
The “Original” 1962
Surface Leases
Despite the facts that:


five well sites, not
certified as reclaimed
and taken in 1951
existed as at January
1, 1962; and,
there were two owners
of the surface rights;
in respect of existing
Armisie Field operations
within the S 1/2 of 4-52-25
W4M, Armisie Oil
Company Limited as
Lessee entered into three
surface lease agreements
with the Lessor parties
listed below as to three
well sites, the Armisie No 1
Battery, and access roads,
all in undescribed locations
of unstated acreage:
BATTERY
NORTH
Surface Owner Dr. W.S.S. Armstrong
Surface Owner Dunn Holdings Ltd.
BATTERY
SOUTH
ARMISIE NO. 2
ARMISIE NO. 1
5 6
7 8
4 3
2 1
1. Dr. W.S.S. Armstrong;
Lessor as to an access
road area and a battery:
(Said to be 4.7 acres)
2. Frank S. Lieber; Lessor
as to Armisie No. 1 and
Armisie No. 2 oil wells,
and a battery, roads:
ARMISIE NO. 5
(Said to be 7.88 acres)
3.
Dunn Holdings Ltd.;
as Lessor as to
Armisie No. 5 oil well
and a road from 6-4:
(Said to be 3.73 acres)
South 1/2 Section 4-52-25 W4M
The Problems: All three surface leases with effective dates of January 1, 1962 rely on annexed plans marked “A” to set out “the leased lands” as defined in each agreement. However, the
successor in interest to Armisie Oil Company Limited cannot produce copes of such plans marked “A”. As such there is currently no accurate means of ascertaining the surface area and
location of any surface rights granted as at January 1, 1962, by way of three surface leases clearly meant to cure a lack of formal surface rights granted circa 1951.
4