Nigel Bankes - ABLawg

Case Considered: Signalta Resources Limited v. Dominion Exploration Canada Limited, 2007 ABQB 636

Keywords: oil and gas law, expert witnesses, unit agreements, limitations, damages

PDF Version: What Zones Were the Subject of a Unitization Agreement?

The question of what substances are the subject of a unitization has been before the courts on at least one other occasion in Prism Petroleum Ltd v Omega Hydrocarbons Ltd, [1994] 6 WWR 585 (Alta. C.A.). The issue in that case involved a split petroleum and natural gas title. Signalta v. Dominion does not involve a split title in that sense. Rather the issue was whether the title that had been committed to a unitization agreement was confined to the Viking or whether it also included the Glauconite. Put in these terms the issue seems relatively simple but the paper trail was very complex. Combine a complex set of facts with competing expert opinions from well known legal (Ballem and Thackray) and land (O’Byrne) experts and the result is a very lengthy 74 page judgement from Justice A.G. Park in which he concluded that the Glauconite for the relevant tract was never included in the original unitization.

PDF Version: Alberta’s Royalty Review and the Law of Grandparenting

The Royalty Review Panel made it quite clear in its Report that existing projects should not be protected from the proposed changes. In other words it recommended in very strong terms that there should be “no grandparenting”. In recent days this position has been the subject of considerable comment and reaction. Some (e.g. Murray Edwards of Canadian Natural Resources) seem to suggest that the refusal to grandparent constitutes an interference with vested rights and have further suggested that, if implemented, the decision not to grandparent will be open to challenge in the courts. Deborah Yedlin, a columnist, offered comments on CBC Radio on September 26 which seemed to concur and suggested that the panel’s refusal to grandparent is a “non-starter” and “has to be taken off the table”. Others have suggested that this may be a matter on which the government might indeed seek to “pick and choose” i.e. to accept the panel’s recommendation on a go-forward basis but not to apply the recommendations to existing projects. And finally we are told that the American Embassy has been warning us that Alberta should not seek to change arrangements for existing projects.

In sum, the grandparenting issue is emerging as one of the critical issues in the debate on the implementation of the recommendations of the Review Panel. In this comment I propose to examine: (1) the reasons that the panel gave for not grandparenting, (2) the law on grandparenting, and (3) the (potentially) unique position of the Syncrude and Suncor projects.

Author: Nigel Bankes

What Zones Were the Subject of a Unitization Agreement?

Alberta’s Royalty Review and the Law of Grandparenting