Oil & Gas – Page 39

By: Nigel Bankes

PDF version: Time to Proclaim the Compulsory Unitization Provisions of the Oil and Gas Conservation Act

Decision Commented On: Butte Energy Inc Application for Special Oil Well Spacing, Chigwell Field, 2013 ABERCB 005

Regular readers of this blog will know that this is not the first time that I have used this forum to call for the proclamation of the compulsory unitization provisions of the Oil and Gas Conservation Act (OGCA) RSA 2000, c O-6 (see here) but the facts surrounding this decision of the Energy Resources Conservation Board (ERCB, or Board) present a particularly compelling case for compulsory unitization to deal with holdouts which might convince even the sceptics.

The interaction of the offset well and default clauses of an oil and gas lease

By Nigel Bankes

On April 18, 2013

In Oil & Gas

PDF version: The interaction of the offset well and default clauses of an oil and gas lease

Case commented on: 1301905 Alberta Ltd v Sword Energy Inc, 2013 ABQB 113.

In this case the Court granted summary judgement for breach of the offset well obligation in an oil and gas lease. Assessment of damages was referred to a referee.

When Does the Purchaser of an Interest in a Natural Gas Processing Plant also Purchase an Interest in the Sulphur Block Associated with the Plant? Answer: Only when the Agreement (or perhaps ‘the Elephant in the Room’) says so!

By Nigel Bankes

On April 12, 2013

In Contracts, Oil & Gas

PDF version: When does the purchaser of an interest in a natural gas processing plant also purchase an interest in the sulphur block associated with the plant? Answer: only when the agreement (or perhaps ‘the elephant in the room’) says so!

Case commented on: Talisman Energy Inc v Esprit Exploration Ltd, 2013 ABQB 132

Talisman purchased Canadian 88’s interest in the East Crossfield Conditioning Plant in 2000. Did it also purchase the sulphur block and the liabilities associated with ownership of the block? In this case, and after undertaking an extensive and detailed contractual paper trail, Justice Sal LoVecchio concluded that the answer was no. The ‘elephant in the room’ was C88’s draft purchase and sale agreement (PSA) (which Talisman elected not to use) which, had it been executed, would have dictated the opposite result.

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Summary judgement on an oil and gas lease termination case

By Nigel Bankes

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.

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

By Nigel Bankes

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.