By: Nigel Bankes

PDF Version: Payout under Alberta’s Oil Sands Royalty Regulation

Case Commented On: Fort Hills Energy Corporation v Alberta (Minister of Energy), 2018 ABQB 905

A year ago, ABlawg posted a case comment on a dispute related to the determination of payout with respect to the Hibernia project on the East Coast. That case, Newfoundland and Labrador v ExxonMobil Canada Properties, 2017 NLDT(G) 147, 2017 CanLII 56724 (NL SCTD), involved an arbitration followed by an unsuccessful application by the Province of Newfoundland and Labrador to have the court overturn the arbitral award. Fort Hills, perhaps more conventionally, involves the definition of payout under the terms of Alberta’s Oil Sands Royalty Regulation, 2009, Alta Reg 223/2008, (OSRR). In this case the matter arises as an application for judicial review with respect to the Minister’s decision on one element of the payout account for the Fort Hills Oil Sand Project (FHOS Project), namely a category of expenses referred to as ‘prior net cumulative balance’ (PNCB). The differences between the parties were massive. Suncor had originally claimed a PNCB of $1,898,205,145; the minister allowed a PNCB of a little more than $33 million, and a further review and audit reduced this to $NIL. Definitely worth fighting about!

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By: Nigel Bankes

PDF Version: A Bill to Restrict the Interprovincial Movement of Hydrocarbons: a.k.a. Preserving Canada’s Economic Prosperity [Act]

Bill Commented On: Preserving Canada’s Economic Prosperity Act, Bill 12 [Alberta], First Reading, April 16, 2018

This post examines two key questions: (1) What does Bill 12 do? and (2) What are the constitutional underpinnings of the Bill? The post does not examine whether or not the Bill is consistent with Alberta’s obligations under internal trade agreements or Canada’s obligations under the North American Free Trade Agreement. But first, some brief background to provide context for this unusual (and unusually titled) Bill. Continue reading →

By: Nigel Bankes

PDF Version: Ontario Court of Appeal Decision Provides Guidance on the Application of Dynex

Case Commented On: Third Eye Capital Corporation v Ressources Dianor Inc, 2018 ONCA 253 (CanLII)

In 2002 the Supreme Court of Canada handed down its decision in Bank of Montreal v Dynex Petroleum Ltd, 2002 SCC 7 (CanLII) in which it confirmed that a gross overriding royalty (GOR) carved out of a working interest in oil and gas rights was capable of subsisting as an interest in land as a matter of law. In an earlier post on post-Dynex litigation I observed that:

Whether any particular GORR created an interest in land, or simply a contractual claim, depends upon the intentions of the parties as revealed in the language adopted by the parties to describe the GOR. There is presumably no objection to expressing this intention with words such as “the parties intend that the right and interest created by clause x of this agreement is to be an interest in land” – so long as this intention is not contradicted by other language in the agreement when construed as a whole in accordance with the usual rules on the interpretation of contracts. Continue reading →