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Summary judgement on an oil and gas lease termination case

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On March 25, 2013

In Oil & Gas

PDF version: Summary judgement on an oil and gas lease termination case

Decision commented on: P Burns Resources Limited v Locke, Stock and Barrel Company Limited, 2013 ABQB 129.

In this appeal from an unreported decision of Master Laycock, Justice Bensler granted partial summary judgement on an application for a declaration that a petroleum and natural gas lease had expired during its secondary term for want of production or working operations. The evidentiary basis for this conclusion consisted primarily of production records filed with the Energy Resources Conservation Board (or its predecessors). On the appeal before Justice Bensler in the Court of Queen’s Bench the lessee supplemented the record with evidence of one of its employees and one of its consultants.

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A Farmee that Spuds in the Test Well has the Right to a Default Notice

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On March 22, 2013

In Oil & Gas

PDF version: A farmee that spuds in the test well has the right to a default notice

Case commented on: EOG Resources Canada v Unconventional Gas Resources Canada Operating Inc, 2013 ABQB 105 (MC)

This decision interprets the default clause (Article 13) of the Canadian Association of Petroleum Landmen’s (CAPL) Farmout and Royalty Procedure. It confirms that there is no automatic termination of the farmee’s right to earn provided that the farmee has spudded in the earning well; the farmee is entitled to proper notice of default and the opportunity to rectify that default.

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Whoever heard of such a thing? A Crown oil and gas lease an intangible form of personal property?

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On March 1, 2013

In Bankruptcy and Insolvency, Oil & Gas

PDF version: Whoever heard of such a thing? A Crown oil and gas lease an intangible form of personal property?

Case considered: Kasten Energy Inc v Shamrock Oil and Gas Ltd, 2013 ABQB 63.

In this case Justice Lee granted Kasten’s application to appoint a receiver\manager over all of the assets of Shamrock, including Shamrock’s Crown oil and gas lease. Kasten was a secured creditor of Shamrock claiming under a general security agreement (GSA) over Shamrock’s present and after acquired personal property. In the course of making his decision to appoint a receiver Justice Lee concluded that Shamrock’s lease was an intangible form of personal property. Kasten brought its application for the appointment of a receiver\manager Kasten under section 13(2) of the Judicature Act, RSA 2000, c J-2 rather than under section 65(7) of the Personal Property Security Act, RSA 2000, c P-7 (PPSA).

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When is a Lease Issued “In Lieu” of an Existing Lease?

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On February 20, 2013

In Limitations, Oil & Gas

PDF version: When is a lease issued “in lieu” of an existing lease?

Case Commented In: Canadian Natural Resources Limited v Jensen Resources Ltd, 2012 ABQB 786

In the early 1980s the Government of Alberta decided to make a clearer distinction in its tenure regime between grants of conventional petroleum and natural gas (PNG) rights and grants of oil sands rights. In implementing this policy the province went so far as to redefine the rights contained in existing Crown PNG leases. But in return, it allowed the affected PNG lessees to apply for a form of oil sands tenure for the rights that had been excluded from the PNG leases. That’s what happened in this case and the issue was whether Jensen’s gross overriding royalty (GOR) which clearly applied to the PNG leases also carried over to the oil sands rights. Justice Jo’Anne Strekaf held that it did.

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A new approach to regulating unconventional resource plays in Alberta: the ERCB takes a bold step forward

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On January 10, 2013

In Energy, Natural Resources, Oil & Gas

PDF version: A new approach to regulating unconventional resource plays in Alberta: the ERCB takes a bold step forward

Document commented on: ERCB Discussion Paper, Regulating Unconventional Oil and Gas in Alberta, 2012.

In the weeks before Christmas the Energy Resources Conservation Board (ERCB) released a number of documents all dealing with aspects of the development of unconventional resources. The documents included two inquiry reports dealing with serious incidents in relation to horizontal wells (here and here) and multi-stage fracturing, a draft Directive on Hydraulic Fracturing and the document which is the focus of this post, the Discussion Paper, Regulating Unconventional Oil and Gas in Alberta. The release of this paper is a welcome development because it provides a practical example of how a regulator can take the initiative in trying to manage cumulative impacts and the risks associated with the application of known technologies to new challenges. It is fully consistent with the planning approach espoused by the Alberta Land Stewardship Act, SA 2009, c A-26.8 and the Land-use Framework. And for once it demonstrates the ability of the Board to lead and get out in front of its critics – ironically, precisely at the moment when it is about to be replaced by new Energy Development Authority (I was going to title this blog “The ERCB and the Owl of Minerva” but thought that some might infer from that title that it was a post on species at risk).

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