Author Archives: Nigel Bankes

About Nigel Bankes

Nigel Bankes is emeritus professor of law at the University of Calgary. Prior to his retirement in June 2021 Nigel held the chair in natural resources law in the Faculty of Law.

What’s the Next Step when Shallow Rights Become Deep Rights?

PDF version: What’s the next step when shallow rights become deep rights?

Cases considered: Talisman Energy Inc. v Energy Resources Conservation Board, 2010 ABCA 258; ERCB Decision 2009-050, Nexxtep Resources Ltd., Pool Delineation Application: Redesignation of the Lower Mannville C Pool to Rock Creek, Wilson Creek Field, August 7, 2009; ERCB letter decision, June 23, 2010, unpublished, available here.

The purpose of this note is to update readers on the developments in a set of facts that first came before the courts in 2007 and on which I blogged in July 2008.

The Facts

The facts, as outlined in my earlier blog, were as follows:

“Nexxtep purchased certain petroleum and natural gas rights under Crown oil and gas leases from the base of the Mannville through the Rock Creek formation to the base of the Pekisko pursuant to a purchase and sale agreement (PSA) of March 2004 with Talisman. The assets included a horizontal well but not a more prolific vertical well which, at the time of the PSA, both parties assumed to be producing from above the base of the Mannville. Subsequent investigations by Nexxtep established that the vertical well was producing from the Rock Creek formation below the Mannville. When Nexxtep’s requests that Talisman shut in the vertical were unsuccessful, Nexxtep commenced an action [the QB action] and brought an application for an injunction requiring Talisman to shut in the vertical well below the Mannville. Talisman in turn sought an order for summary judgment and in the alternative security for costs.”

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How Should Society Deal with the Question of Long Term Liability for Carbon Capture and Storage?

By: Nigel Bankes

PDF Version: How Should Society Deal with the Question of Long Term Liability for Carbon Capture and Storage?

Report Commented On: Report of the Interagency Task Force on Carbon Capture and Storage, August 2010

I don’t often sing the praises of government reports. Often written in turgid prose, they seem more concerned to find the lowest common denominator that all can live with rather than to identify and evaluate the policy problem and policy options to address that problem. This is even more likely to be the case where you have an “inter-agency” report; a report cobbled together by multiple cooks and authors, where the LCD really is the way to go. But I like this report of the United States federal Interagency Task Force on Carbon Capture and Storage, which came out earlier this month. It should be compulsory reading, not just for CCS wonks, but also for anybody engaged in formulating public regulatory policy in response to any new technology.

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The Supreme Court of the United Kingdom (fka the House of Lords) Decides an Oil and Gas Case

By: Nigel Bankes

PDF Version: The Supreme Court of the United Kingdom (fka the House of Lords) Decides an Oil and Gas Case 

Case Commented On: Star Energy Weald Basin Limited v Bocardo SA, [2010] UKSC 35

It is not every day, or even every year, that the highest court in the United Kingdom passes judgement in an oil and gas case. But the Supreme Court of the United Kingdom did so at the end of July and while much of the Court’s reasoning turns on the details of the UK’s petroleum legislation, and in particular on the terms of the Crown vesting legislation in that jurisdiction, the Court also had something to say about the common law ownership rights of the surface owner. These comments merit carefully scrutiny in the context of the ongoing debate in Alberta and elsewhere about ownership rights in relation to pore space, an important issue in the context of carbon capture and storage (CCS).

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Mutatis Mutandis: The ERCB Speaks (in Latin) on the Subject of Carbon Capture and Storage

By: Nigel Bankes

PDF Version: Mutatis Mutandis: The ERCB Speaks (in Latin) on the Subject of Carbon Capture and Storage

Matter Commented On: ERCB Bulletin 2010 – 22, ERCB Processes Related to Carbon Capture and Storage (CCS) Projects, June 29, 2010

After a long period of cogitation the chief energy regulator in the province has finally provided a statement of how it proposes to approach the regulation of carbon capture and storage (CCS) projects. The message is simple: apply the current rules, so far as they are applicable to CCS (the basic idea of mutatis mutandis). The issue is important: several task forces and many commentators have emphasised that the proponents of CCS projects need regulatory certainty if they are to plan and implement commercial scale CCS operations. Whether this ERCB Bulletin provides sufficient guidance to industry and sufficient comfort to the citizens of the province that CCS projects will be handled safely remains to be seen.

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Estoppel arguments fail once again in an oil and gas lease case

PDF version: Estoppel arguments fail once again in an oil and gas lease case 

Case considered: Desoto Resources Limited v. Encana Corporation, 2010 ABQB 448

In this case Justice William Tilleman dismissed an appeal from Master Jodi Mason’s decision in chambers in which she had granted summary judgement in favour of the defendant in the action, Encana. Desoto had been seeking a declaration that it had a number of valid leases notwithstanding that the primary term of the leases had expired in the 1970s and that there had been no production on the leases for a period beginning in the late 1990s. This was apparently, at least at the outset, as a result of the properties being shut-in by order of the Energy Resources Conservation Board because of the failure of the then lessee to pay well abandonment deposits.

I blogged on Master Mason’s decision – see Successful application for summary dismissal in an oil and gas lease validity case.

On appeal, Desoto focused on estoppel arguments urging that the leases should survive on the basis of promissory estoppel, estoppel by acquiescence, or estoppel by deed.

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