The Extreme Operating Procedure Makeover Is Complete – Part II
Transcription
The Extreme Operating Procedure Makeover Is Complete – Part II
THE NEGOTIATOR Th e M a g a z i n e o f t h e C a n a d i a n A s s o c i at i o n o f Pe t ro l e u m L a n d m e n April 2016 The Extreme Operating Procedure Makeover Is Complete – Part II Do We Really Need Stricter Regulation on A&D Activity in This Market? Further Improvements introduced in the 2015 CAPL Operating Procedure Changes to the AER License Transfer Process and impact on industry Red Water or Murky Water? AER vs Grant Thornton, as Receiver for Spyglass Your energy partner Building on over 20 years of recognized oil and gas leadership and valued relationships with CAPL, McMillan continues to be your trusted and experienced energy counsel. For information on the services McMillan’s Energy Group can provide, please visit our website or contact Michael Thackray, QC. Michael A. Thackray, QC e: [email protected] t: 403.531.4710 THE NEGOTIATOR Th e M a g a z i n e o f t h e C a n a d i a n A s s o c i at i o n o f Pe t ro l e u m L a n d m e n Senior Editorial Board Director of Communications Kent Gibson [ph] Advertising Editors Kevin Young [ph] [ph] Trevor Rose Coordinating Editor Krissy Rennie [ph] Feature Content Editor Mark Innes [ph] Regular Content Editor Martin Leung [ph] Social Content Editor [ph] Jason Peacock Editorial Committee Amy Kalmbach Nathan Roberts Dinora Santos THE NEGOTIATOR 403-698-8822 403-831-4908 403-233-3136 403-663-2595 403-818-7561 403-699-5864 403-691-7077 [ph] 587-794-4723 [ph] 403-268-3006 [ph] 403-470-1558 Features April 2016 2 T he Extreme Operating Procedure Makeover is Complete – Part II Design and Production Rachel Hershfield, Folio Creations Printing McAra Printing Submissions For information regarding submission of articles, please contact a member of our Senior Editorial Board. Disclaimer All articles printed under an author’s name represent the views of the author; publication neither implies approval of the opinions expressed, nor accuracy of the facts stated. Advertising For information, please contact Kevin Young (403-831-4908) or Trevor Rose (403-233-3136). No endorsement or sponsorship by the Canadian Association of Petroleum Landmen is suggested or implied. The contents of this publication may not be reproduced either in part or in full without the consent of the publisher. 2015–2016 CAPL Board of Directors President Nikki Sitch, P.Land, PSL Vice-President Larry Buzan, P.Land Director, Business Development Alberta & British Columbia Ted Lefebvre, P.Land Director, Business Development Saskatchewan & Alberta Oilsands Michelle Creguer Director, Communications Kent Gibson Director, Education Bill Schlegel, P.Land Director, Field Acquisition & Management Paul Mandry, PSL Director, Finance Andrew Webb Director, Member Services Ryan Stackhouse, P.Land Director, Professionalism Noel Millions, PSL Director, Public Relations Gary Richardson, PSL Director, Technology Mandy Cookson Secretary/Director, Social Jordan Murray Past President Michelle Radomski Jim MacLean 8 D o We Really Need Stricter Regulation on A&D Activity in This Market? Paul Negenman 12 R ed Water or Murky Water? Carole Hunter & Hazel Saffery 16 Royalty Review Report Gary Richardson In Every Issue 19 The Negotiator’s Message From the Board: Technology 19 The Negotiator’s Message From the Board: Vice President 21 Board Briefs 23 Get Smart 26 Roster Updates 28 31 32 32 32 Guest Speaker – April General Meeting The Social Calendar CAPL Calendar of Events April Meeting May Meeting Also in this issue Readers may obtain any Director’s contact information from the CAPL office. 11 2016 CAPL Barnburner 2.0 Suite 1600, 520 – 5 Avenue S.W. Calgary, Alberta T2P 3R7 [ph] 403-237-6635 [fax] 403-263-1620 www.landman.ca 29 2016 CAPL Squash Tournament Kaitlin Polowski Denise Grieve Irene Krickhan Karin Steers [email protected] [email protected] [email protected] [email protected] 29 Scott Land & Lease Junior Landman Charity Golf Classic 30 All Good Things Must Come to an End THE NEGOTIATOR / APRIL 2 016 The Extreme Operating Procedure Makeover is Complete – Part II 2 THE PARALLEL UPDATES TO THE 2007 CAPL OPERATING PROCEDURE, THE 1997 CAPL FARMOUT & ROYALTY PROCEDURE AND THE 1997 CAPL OVERRIDING ROYALTY PROCEDURE WERE ENDORSED BY CAPL IN LATE 4Q2015. The documents Next month’s article will address the remaining were finalized after three industry drafts and the 2007 CAPL Operating Procedure and those various additional iterations with the comment- who have been reluctant to shift from the 1990 ing parties to optimize the handling of their CAPL Operating Procedure to the 2007 docu- comments, to obtain their insights on other ment. These materials include: (i) an overview changes and to confirm alignment. of the project scope and the major changes in substantive changes in the Operating Procedure. The CAPL website includes various materials relating to the 2015 CAPL Operating Procedure that are designed to facilitate a transition to the new document by both users comfortable with This is the second of a series of articles to a user friendly format; (ii) a detailed table that outline the more significant changes in the outlines in summary form all material changes updated documents, and is the second of three relative to the 2007 CAPL and the rationale for articles on the updates to the Operating Procedure. those changes; (iii) a clean copy of the text and Last month’s article addressed the case for change annotations; (iv) a redlined copy of the text and the updates associated with Horizontal Wells and annotations relative to the 2007 CAPL; (v) a and unconventional projects. This month’s article Word version of a sample election sheet; (vi) a provides an overview of the changes in the docu- detailed table that outlines in summary form all WRITTEN BY ment due to some intervening legal developments. material changes in the 2007 and 2015 Operating JIM MACLEAN Procedures relative to the 1990 CAPL and the rationale for We discovered late in the update process for the 2015 docu- those changes; (vii) a redlined copy of the text and annotations ment a legal article that demonstrated that we had blurred the relative to the July, 2015 draft; (viii) a matrix showing industry distinction between the discrete concepts of gross negligence, comments on the July draft and our responses; and (ix) copies wilful misconduct, wanton misconduct and recklessness/reckless of letters of support for the project from CAPLA, CAPPA, EPAC, disregard when creating the 2007 definition. In essence, the 2007 PASC and the PJVA. definition was inadvertently written in a way that focused on the wilful or wanton misconduct, reckless disregard components You Don’t Bring Me Lawsuits Anymore without sufficient reference to the gross negligence component. One of the things that would surprise people who do not work While there is probably a very modest difference in outcomes in our industry is how few disputes relating to our land and JV between the 2007 and 2015 definitions in practice, the inclusion of agreements ever escalate to litigation relative to the number and the “marked and flagrant departure” test in the updated definition value of these transactions. aligns more closely to our original intention, the state of the law in There are a number of reasons for this. To a large degree, Canada and the approach in the PJVA CO&O Agreement definition. this reflects the value that our industry and our profession place on relationships and the general willingness to talk through Liability and Indemnification (Article 4.00), Clause 3.04 problems to attempt to find a mutually acceptable resolution in and Definition of Operation due course. To some degree, this reflects the fact that we do not The definition of “Operation” and the annotations on Clauses 3.04 live in a litigious society. But to a large degree, it also reflects the and 4.01 were modified to address the Adeco case noted above. major efforts that industry associations have invested over time Notwithstanding that the Adeco case was ultimately decided to create balanced documents that increasingly attempt to offer based on a determination that the Operator’s conduct in reasonable solutions to reasonably foreseeable problems in order losing a title document constituted “gross negligence or wilful to mitigate the potential for unnecessary disputes to disrupt or misconduct” under the 1990 CAPL, the Alberta Court of Appeal damage ongoing relationships. commented on other provisions of the 1990 CAPL in its judgment. That being said, some disputes do escalate to the courts, and The Court of Appeal offered significant certainty respecting the 2015 document has been updated to reflect learnings from the introduction of Clause 401 of the 1990 CAPL by confirming those cases, as noted below. that the “Notwithstanding” reference at the beginning of Clause 401 applied the higher gross negligence standard to breaches of Gross Negligence or Wilful Misconduct Clauses 303 and 304 of that document. There were three cases on Gross Negligence or Wilful Misconduct However, the Adeco decision has created significant uncer- (Adeco Exploration Company Ltd. v. Hunt Oil Company of Canada Inc., tainty about the interpretation of the standard of performance to Trident Exploration Corp. (Re) and Bernum Petroleum Ltd. v. Birch Lake be applied to an Operator for other contractual duties under the Energy Inc.). The first two were cases involving the loss of a title pre-2007 CAPL Operating Procedures. In the context of the Court’s document under the 1990 CAPL Operating Procedure, and the interpretation of “joint operations” in the 1990 CAPL document as third related to the manner in which an Operator conducted basically including any activity that benefits the Joint Account, certain drilling operations under the 2007 CAPL Operating the Court also concluded in Adeco that the effect of Clause 401 of Procedure. the 1990 document was that the Operator would typically only Based on the facts, the Court found that the Operator’s conduct in the loss of the title documents in Adeco and Trident ever be solely responsible for losses that fell within the scope of the gross negligence or wilful misconduct test therein. fell within the scope of “gross negligence or wilful misconduct” The weight to be given to that particular aspect of the judg- under the 1990 CAPL and that the Operator’s conduct in Bernum ment over time with respect to the 1990 document is unclear, did not fall within the scope of the 2007 definition of Gross though. The finding that the Operator’s conduct constituted Negligence or Wilful Misconduct. gross negligence was such that the additional comments were The annotations on the definition of Gross Negligence or Wilful Misconduct and Subclause 3.10A were modified to reflect Taken literally, this aspect of the judgment would potentially mean that a Non-Operator seeking recovery of funds for breach of On a more substantive basis, we modified the definition of the Accounting Procedure or for misappropriation of funds under Gross Negligence or Wilful Misconduct in the 2015 update to add Clause 507 of the 1990 document, for example, would have to a new item (i) respecting “a marked and flagrant departure from prove that the Operator’s conduct constituted “gross negligence the standard of conduct of a reasonable operator acting in the or wilful misconduct” in order to be successful in recovering circumstances at the time of the alleged misconduct”. funds properly belonging to it. As noted in the annotations on 3 THE NEGOTI ATO R / APRIL 201 6 those cases. not actually necessary for the determination of the case. the 2015 CAPL, this issue is addressed expressly in the 2007 Subclause 5.05F that the Operator’s books and records constituted and 2015 CAPL Operating Procedures. These documents allow a prima facie proof of the amount owing. The Court determined Non-Operator to pursue traditional legal remedies for breach of that Blaze was not able to withhold payment with respect to contract, other than for the specific Clauses and Subclauses iden- the invoices while auditing or otherwise disputing the amounts tified in Paragraph 4.02(b) for which the Gross Negligence or Wilful owing. In making its finding, the Court determined that “…the Misconduct standard applies. As a result, a Non-Operator seeking JIB invoices were prepared in good faith in the ordinary course recovery of funds it alleges belong to it (versus damages suffered of business. In other circumstances, for example, if there was as a result of a field event, for example) under the post-1990 docu- evidence of fraud or other misfeasance, the same result may not ments is required to prove only that the amounts are owing to it occur.” This case is currently under appeal. in contract without having to prove that the Operator retained them because of its Gross Negligence or Wilful Misconduct. The Brookfield case illustrates the risks to Non-Operators if they allow an Operator to hold funds on their behalf for an extended As a consequence of the interpretation of “joint operations” period. The issue in the case was whether the trust created by in Adeco, the definition of Operation in the 2015 CAPL was Clause 507 of the 1990 document gave the Non-Operators prior- modified to be clear that an Operation relates primarily to “the ity to funds in the Operator’s bank account relative to a secured exploration, development or exploitation of the Joint Lands creditor. The Operator in the case had removed trust funds from (rather than tasks that are primarily administrative or mana- the commingled funds in its account for unauthorized purposes. gerial in nature)…”. In essence, the modified definition is well Had the trust funds remained in the Operator’s bank account, aligned to industry expectations by linking the term to a specific the Court confirmed that those funds would have been regarded field activity or study. The 2015 CAPL definition is clear that it as being held in trust for the Non-Operators in priority to the does not include such “overhead” type back office tasks as land Operator’s secured creditor. administration and accounting that are not typically regarded Faced with deciding which of two innocent parties would be by industry personnel as “operations” and that have never been adversely impacted, the Court of Appeal found in this particular conducted as a direct charge activity for the Joint Account under instance that the trust obligation applied only to the lowest posi- any version of the Operating Procedure. tive balance in the Operator’s bank account at the relevant time. The Court also noted that the Non-Operators created the risk of Article 5.00 misappropriation of funds by allowing commingling. There were three cases of significance with respect to Article 5.00 This decision shows the vulnerability of a Non-Operator that are addressed in expanded annotations. Two, the Bernum any time that a distressed Operator diverts trust funds for case noted above and SemCAMS ULC v. Blaze Energy Ltd., related other purposes in a way in which the account balance was less to the rights of set-off granted to an Operator under Paragraph than the amount that should have been held as trust funds. 5.05(d) and the third, Brookfield Bridge Lending Fund Inc. v. Karl Oil Non-Operators can mitigate their risk in this area by being vigi- and Gas Ltd., related to commingling and Clause 5.07. lant in watching for warning signs of an Operator’s insolvency, The Bernum case considered the Paragraph 5.05B(d) right of by taking in kind, by not allowing an Operator to hold produc- set-off in circumstances in which a Non-Operator argued that tion proceeds for any material period of time in contravention it was not required to pay amounts owing when it was making of Clause 6.06 and by refusing to advance 100% of their share a counter-claim against the Operator with respect to an issue of approved Operations under Subclause 5.03C (versus the one that was not yet legally determined. The Court recognized that month capital advance contemplated under Subclause 5.03A). THE NEGOTIATOR / APRIL 2 016 the parties were free to contract out of equitable relief, such as set-off. It was unwilling to offer the Non-Operator relief against Disposition of Interest (Article 24.00) payment of the amount owing to allow the second issue to be There were two significant cases with respect to this Article. One tried after failure of the Non-Operator’s original Gross Negligence related to ROFRs (Canadian Natural Resources Ltd. v. Encana Oil & Gas or Wilful Misconduct allegation. It was unclear from the judg- Partnership) and the other related to the 24.01A consent not to be ment if the Court was aware that the last sentence of Clause unreasonably withheld mechanism (IFP Technologies (Canada) v. 4.02 precluded the Non-Operator from withholding any payment Encana Midstream and Marketing). The CNRL case was unusual, in of the applicable costs before the original Gross Negligence or that the Court of Appeal referred the case back to trial for a deter- Wilful Misconduct claim was judicially determined. The annota- mination through regular proceedings after an initial decision tions on Clause 4.02 were also expanded to reflect Bernum. through summary proceedings, but it appears that the parties A Paragraph similar to Paragraph 5.05B(d) was the subject 4 were able to resolve their issues without returning to trial. matter of a request for summary judgment in SemCAMS. The CNRL case addressed the situation in which the interest The applicable agreements also included a provision similar to being disposed of under the 1990 CAPL was part of a larger earning agreement in which operations were being conducted in phases. and option agreement”. It is comprised of a farmout component The disposing party (Encana) issued the disposition notice for this and one or more indeterminate option components that only truly phase of the work program when the commitment to conduct the become farmouts of the applicable Joint Lands if and when the work program had crystallized after the farmee’s selection of its farmee makes the commitment to proceed with the applicable earning blocks. It forwarded its disposition notice to CNRL in early option well. The logic of this categorization of the transaction is December for wells that were to be spudded in mid-January. apparent when one realizes that the alternative perspective would Notwithstanding that the farmee’s obligation had not crystal- potentially see an offeree receiving a series of disposition notices lized at the time that the original agreement was completed, one under the pre-2007 documents for the same parcel of Joint Lands of CNRL’s arguments was that the disposition notice should have because they were not earned within the time period prescribed been issued at that time because a “farmout” was regarded as a by provisions comparable to Paragraphs 24.01B(h) and (i). form of disposition in the 1990 CAPL. Encana, on the other hand, The “Insofar as” sentence was added in Paragraph 24.01B(a) of argued that a farmout agreement is not necessarily a dispo- the 2015 document in the context of the CNRL case. It addresses sition of all of the lands-no notice is actually required until a the situation in which multiple wells may be drilled under an disposition is imminent. The Chambers Judge preferred Encana’s earning agreement that is not otherwise ROFR exempt under argument on this point, and the updates in the 2015 document Clause 24.02. It provides the disposing party with the ability to are consistent with this approach. defer issuance of a disposition notice to the offerees until such As there were no further trial proceedings on the issues in that time as it becomes apparent to it that the applicable Joint Lands case, this potentially leaves some ambiguity with respect to the have been selected in an earning block for a specific committed handling of the issue under pre-2007 versions of the document well. It also eliminates any argument by an offeree that it has the for any earning agreement that included a commitment well and inherent right to extend a ROFR on one particular block into all of one or more optional wells. This type of transaction would typi- the lands subject to the earning agreement. cally be referred to as a “farmout” because of the committed well. While a very real potential issue in the pre-2007 documents, However, the description of that transaction that addresses its this is unlikely to be an issue in practice in the post-2007 docu- essence much more accurately would be to refer to it as a “farmout ments. The 35% net ha exception in Paragraph 24.02(e) will apply THE NEGOTI ATO R / APRIL 201 6 5 Although the CAPL Operating Procedure has been the subject of a significant number of cases over time, the document has, on balance, held up very well in the eyes of the Courts. This gives industry greater confidence in the document… to most larger scale earning agreements, and cause them to be that a primary production development could have on its future ROFR exempt transactions. ability to proceed with a thermal development. The CNRL case also considered the potential application In reviewing the consent issue, the Court noted, “The court of a provision similar to Paragraph 24.01B(f). CNRL had made should not defer to the party withholding consent, but must an unqualified ROFR election and then sought relief from two assess the reasons for withholding consent and consider whether aspects of the farmee’s obligations under the farmout agree- a reasonable person in similar circumstances would have made ment. CNRL wanted to drill the earning wells at a location of its the same decision. The court should consider the purpose of the choice in accordance with the farmout agreement (rather than at consent clause and the meaning and benefit it was intended the farmee’s elected locations). It also wanted to drill on a sched- to confer.” ule that recognized the operational logistics of conducting the One of Encana’s key arguments was that the withholding of drilling operations (e.g., surface rights, regulatory approvals and consent was unreasonable if the objecting party would receive as supply logistics) that were inherent when receiving the dispo- much following the disposition as it would if the disposition had sition notice in early December with a contemplated January not been made. There were primary production assets located on 15 commencement date. As the case never did return to trial, the lands, and there was no commitment by Encana to advance it is not clear how those two issues would have been resolved. a thermal development project. The retention of much of the There was a suggestion by the Chambers Judge in the lower tenure was also at near-term risk if no development activities court decision, though, that CNRL should have requested a cash were conducted, where Wiser’s activities allowed tenure to equivalent value under the comparable provision to Paragraph be retained for the benefit of IFP. While IFP may have had an 24.01B(c) because it could not have matched the farmee’s consid- expectation that a thermal project would be advanced, that eration in kind. expectation was not shared. As a result, the Court found that the The IFP case pertained to IFP’s refusal to grant consent consent had been unreasonably withheld. to a disposition by Encana. The facts were unusual, in that The IFP case also reinforces to a party receiving a request for Encana and IFP had entered into a JOA using a modified 1990 consent the potential risks in refusing consent, particularly during CAPL whereby IFP held a 20% working interest in thermal and a period of volatile commodity prices. A disposing party that loses enhanced recovery operations with Encana in circumstances in a potential transaction as a result of the refusal of another party to which Encana retained 100% of the interest in primary produc- grant consent would potentially have a claim for damages against tion. In essence, this saw the ownership linked to the manner in the party that refused its consent in that circumstance if it could which the rights were produced, such that the interests were, as then only dispose of the property for a lower price. the Court described them, “competing working interests”. Issues arose after Encana disposed of its entire interest in Miscellaneous Legal Developments the property to Wiser under an agreement that required Wiser Other cases of note since completion of the 2007 CAPL Operating to earn its interest for conducting operations with respect to the Procedure and their impact on the 2015 CAPL are as noted below: existing primary production assets, where Wiser’s focus was on THE NEGOTIATOR / APRIL 2 016 establishing primary production from the lands. There were no I. protections included in the IFP agreement offering it any protec- were modified to address some of the comments in Solara tions if the working interest owner of the primary production Exploration Ltd. v. Richmount Petroleum Ltd. about potential rights were to proceed with a development of those rights. The case raised several issues. One related to the consent not 6 The definition of Completion and the related annotations ambiguity in the traditional provision. II. The annotations on the definition of Title Documents were to be unreasonably withheld mechanism in Subclause 2401B(e) expanded to address Canadian Natural Resources Ltd. v. Jensen of the 1990 document-a parallel provision to Alternate 2401A Resources Ltd. That case considered the “replacement” aspect included in the ROFR process since the 1990 document. IFP had of a similar definition in the context of a new lease “executed refused its consent because of the adverse impact it believed in lieu thereof”. It found that the acquisition of an oil sands lease as a matter of right because of the status as the holder issued by a lessor. There was also some language in the of a P&NG lease satisfied the “in lieu thereof” test. judgments bringing into question whether a well was actu- III. The annotations on Paragraph 2.02B(a) were expanded to ally a well to preserve title if it was being drilled for reasons address Signalta Resources Ltd. v. Land Petroleum International other than to preserve title. This was notwithstanding that Inc. in the context of the 1990 CAPL. In that case, Signalta the Clause in each case was entirely focused on outcomes obtained the consent of all Non-Operators to replace the (rather than intention) and that wells are typically drilled to Operator after Signalta acquired the interest of another position the parties to produce petroleum substances and Non-Operator. The Operator attempted to retain opera- generate revenue, not only to retain land. It was also not torship, based primarily on an argument that Signalta’s apparent if the Court in Primrose considered the potential predecessor was indebted to it under the agreement. This impact of the Waiver Of Relief Clause introduced as Clause was even though the Operator did not object to the proposed 2807 of the 1990 document. assignment of the Working Interest to Signalta in accor- VII. The annotations on Clause 12.01 were expanded to address dance with the 1993 CAPL Assignment Procedure. The Court Baytex Energy Ltd. v. Sterling Eagle Petroleum Corp., which granted injunctive relief to require the Operator to transfer reinforces the importance of managing the abandonment operatorship to Signalta. process carefully if one of the Parties is in receivership under IV. The annotations on Clause 2.03 were expanded to address the protection of the Companies’ Creditors Arrangement Act Diaz Resources Ltd. v. Penn West Petroleum Ltd., which related (Canada). In an Alberta context, the Parties should become to the corresponding 1990 Clause. This case reinforces the familiar with the requirements of the Alberta “Orphan Well challenge (pardon the pun) in trying to use the challenge Fund”, which currently sees the Operator make a claim after Clause. The challenging Non-Operator had issued its chal- the required work is complete and a delay in the recovery of lenge on the basis of eliminating joint account charges for funds. There will be circumstances in which the most expe- a Production Office/Field Office and First Level Supervision dient way to address the issue will be for the Operator to in the field without any attempt to quantify the financial assume the incremental costs for its own account. There will impact of these changes on the joint account or otherwise be others in which the magnitude of the costs and the time commenting on the manner in which its assumption of the at which costs would be expected to be recovered from the position would impact the joint account. The Court found fund are such that the Operator will require the other Parties V. that the information provided in the challenge notice did to share this burden proportionately under Clause 5.06. not satisfy the requirements of the Clause. The Court deter- VIII.The Addendum annotations on the case law relating to mined that it did not need to address other concerns of the fiduciary obligations, good faith performance and breach of Operator about the ability of the Non-Operator to take over confidence were updated with the assistance of Professor responsibility for managing the property. Nigel Bankes of the University of Calgary Law School. The annotations on Clause 3.09 were expanded to address Nexen Inc. v. Fort Energy Corp., which considered the rights We Fought the Law and… of a Non-Operator with respect to surface rights held by The CAPL Operating Procedure has been, is and always will be the Operator for the Joint Account in the context of the a document that evolves over time to reflect intervening legal 1990 document. The Court found that a Party conducting developments and industry’s changing business needs. an Independent Operation was entitled to an assignment Although the CAPL Operating Procedure has been the subject of the applicable surface rights held for the Joint Account of a significant number of cases over time, the document has, on to conduct that Operation and that the scope of the refer- balance, held up very well in the eyes of the Courts. This gives ence to records in Clause 3.07 includes the documents industry greater confidence in the document, and further rein- under which the surface rights are held. The Court also forces industry’s preference to resolve issues through negotiation determined that the Non-Operator was not entitled to an having regard to both the words and spirit of the document. assignment of the surface rights to facilitate the conduct of operations under a different agreement. Next month’s article will be the final article on the modifications in the 2015 CAPL Operating Procedure. It will address the residual substantive changes in the document that do not relate address in greater detail Amethyst Petroleums Ltd. v. Primrose to intervening legal developments or Horizontal Wells and the Drilling Ventures Ltd., which related to a determination of whether a well was a title preserving well under the 1990 shale revolution. m CAPL. The Court found the classification to be a question of fact in the context of a previously challenged offset notice 7 THE NEGOTI ATO R / APRIL 201 6 VI. The annotations on Subclause 10.10A were expanded to Do We Really Need Stricter Regulation on A&D Activity in This Market? THE NEGOTIATOR / APRIL 2 016 (AER Bulletin 2015-34 – Pipeline Records and LTA) and gathering systems are transferred as part of wells, facilities and pipeline license transfer application (LTA) process. IN ALBERTA, WE COULD, UNTIL NOW, SORT OF, KIND OF, IGNORE SMALL PIPELINE TRANSFERS IN A&D TRANSACTIONS. This is because the Alberta Energy Regulator (AER) pipeline licenses for flowlines 8 We could ignore the pipe because the pipeline portion of the LTA does not attract a licensee liability ratio (LLR) calculation. Small pipelines WRITTEN BY currently have no assigned asset value or liability PAUL NEGENMAN value. All is good. You simply list the pipeline LAWSON LUNDELL LLP licenses, or segments of the license on a partial pipeline transfer, Under existing regulatory requirements, AER pipeline and move onto the more onerous aspects of the LTA process, licensees are required to conduct activities such as inspec- such as trying to figure out how to transfer the well and facility tions, testing, monitoring, and assessments to manage licenses without triggering a massive LLR Security Deposit. pipeline integrity and safety and maintain records of Well, those stress free days are over my friends. And really, these activities. AER pipeline licensees must also retain thank goodness, because the cozy life of $30 oil and $2 gas was records of pipeline incidents and failure investigations. making me sort of fat and lazy anyway. Probably a good time to Whenever a pipeline is sold, all records that exist for that add one more little rule change, and possible costs, to A&D deals. pipeline must be transferred to the new owner. I bet all of our international competitors are adding lots more rules and costs to their processes too. We are not simply talking about locating and cross-referencing The changes were announced in a very brief AER Bulletin the relevant surface files (surface leases, rights of way, road (Bulletin 2015-34) on December 17, 2015. The changes will be use, etc.) pertaining to sold pipelines. This is the minimum incorporated into the AER digital data submission (DDS) online requirement. You must have access to your pipe or you are LTA form effective April 1, 2016. You need to be aware of these noncompliant. Incidentally, this seemingly basic task is some- changes prior to pushing the LTA button on any deals submitted times difficult to complete in complex transactions with short after April 1. timelines. Some vendors cut corners in their surface tenure transfer due diligence. But I digress. Same Rules, So Why Worry? The Bulletin begins rather innocuously: You must also locate, deliver and cross-reference all of the other non-land files and other materials, such as: construction files, surveys, maintenance files and environmental and Effective April 1, 2016, the Alberta Energy Regulator (AER) safety records and compliance reports. Are you sure all those is amending its pipeline licence transfer application items are properly set up in your record management systems? process to require written confirmation that records required Can they be easily cross referenced and packaged for delivery to by CSA Z662: Oil and Gas Pipeline Systems and Part 4 of the the purchaser on sale? Pipeline Rules have been maintained by the seller (transferor) Under current practise, a vendor delivers all such documents of the pipeline licence and have been transferred to the it can locate to purchaser, in due course, using reasonable efforts, purchaser (transferee) of the licence as of the effective date at or shortly after closing. Now, a vendor needs to locate all such of the licence transfer. [emphasis mine] documents, cross referencing same back to all sold pipelines, and has real issues if there are any document deficiencies. Oil and gas companies must already follow CSA Z662 and the Pipeline Rules when constructing and maintaining pipelines. Reasonable efforts are not enough. Missing or incomplete documentation is a non-compliance event. So really, nothing is new. Right? Just in case you are suspicious of the benign effect of the Written Confirmation – LTA Statutory Declaration Government action on your business, the Bulletin goes out of All of this pipeline document due diligence needs to be completed its way to let you know that you are being paranoid, by stating: prior to submission of the LTA. The Bulletin is clear on timing: Confirmation by the transferor and transferee of an … the confirmation is intended to ensure that the transfer AER pipeline licence of the transfer of records does not of all required records to the new licensee occurs before impose any new or additional requirements since pipe- the pipeline licence transfer application is processed and line licensees are already required to maintain the records approved by the AER. [emphasis mine] mandated under the Pipeline Rules and CSA Z662. To ensure compliance, the AER will now make you promise that you have complied with the pipeline due diligence requirements at the time you submit and concur a LTA. Required Pipeline Records on Transfer Transferor Declaration Let’s start with the pipeline records a vendor must locate, orga- When the vendor (transferor) completes the draft LTA and nize and pass over to a purchaser: pushes the DDS LTA submission button, someone, on behalf of the transferor, needs to swear a statutory declaration that all 9 THE NEGOTI ATO R / APRIL 201 6 Well thank goodness. Please only read on if you fear the AER doth protest too much. is good. I assume that someone will be an officer of the vendor. to establish that the pipe meets the reporting requirements. The specific wording of the declaration is as follows: This could easily create significant new costs in LTA approvals. Transferor statement: The transferor hereby confirms that Pipeline Suspension on Audit it has collected and retained all records required under Further, document deficiencies can lead to pipeline suspension: the Pipeline Rules and CSA Z662. The transferor confirms that it has provided these records to the transferee by the The AER will conduct compliance monitoring to ensure effective date of the licence transfer. that these records have been transferred. Licensees who fail to produce these records are considered to be in Transferee Declaration noncompliance with AER 2 Bulletin 2015-34 requirements. But wait, there is a kicker. The Bulletin paragraph above continues Depending on the situation, the AER may suspend opera- with the following additional statutory declaration requirement: tion of the pipeline pending completion of an engineering assessment that demonstrates that the pipeline is fit for Transferee statement: The transferee hereby confirms its intended purpose and service. that it has received all records required to be collected and retained under the Pipeline Rules and CSA Z662 from It is unclear whether these audits would occur during the LTA the transferor. The transferee is responsible for produc- process or under a random AER pipeline compliance audit. If the ing these records on request by the AER. Failure to do so former occurs, closing may be at risk. For the latter, a company constitutes a noncompliance of AER requirements. could see revenue affected due to production being shut-in until engineering assessments are completed and approved by the AER. Ergo, both the transferor and the transferee are required to swear all is good. It seems tough enough for the vendor (transferor) to A Note On PSA Considerations make such a declaration. I would really, really, not want to be the Under a typical purchase and sale agreement (PSA), the vendor poor dude working for the purchaser (transferee) who makes the already agrees to provide all documents and records to purchaser. declaration and pushes that button on a large LTA for a deal that However, it may now be prudent to specifically consider this closes, in like, you know, 60 days. Bulletin in PSA drafting (much like I do in BCOGC “as built” situ- Pitter-patter. Pipeline due diligence must now be done ations). Issues may include: by both sides, before submitting the LTA, and completed in a manner sufficient to allow an officer of the vendor and purchaser • A vendor representation regarding pipeline records sufficiency. to swear that you got everything covered. Hope your whole surface department didn’t get let go in the last round of cuts. • A purchaser condition precedent for conducting pipeline records due diligence. Engineering Assessment if Deficient The real impact of the Bulletin may be in the unforeseen costs • Who pays the engineering assessment costs to become associated with becoming compliant enough to allow the LTA to compliant if a LTA audit requires engineering assessments be processed. The Directive states: prior to the LTA transfer? What about a post-closing audit? … If relevant records are lost, damaged, destroyed, or • How do the parties govern themselves if there is LTA limbo incomplete, the pipeline must be proven to be fit for service during the engineering assessment process? Can you close on through an engineering assessment. [emphasis mine] the assets and leave the LTA for post-closing? The requirement of an “engineering assessment” is what concerns me the most. I hope I am making a mountain out of • Be ready to add a transitional services agreement if this becomes a live issue near closing. THE NEGOTIATOR / APRIL 2 016 a molehill. However, my experience with the costs and delays related to the BCOGC “as built” requirement on pipeline license transfers makes me leery. • Can we still rush to close deals without all surface paper being completed? If the AER is zealous in the pipeline compliance process, it could easily find deficiencies in the documentation required to • How about closing prior to boxing up and delivering files to purchaser? allow the transfer of many pipelines. In short, the failure to have Again, I hope I am overreacting. Only time will tell. m all the old paper could trigger a full engineering assessment 10 2016 CAPL Barnburner 2.0 Thank you for the support from our 2016 Sponsors listed below: Aim Land Services Ltd. AMAR Surveys Ltd. Aurora Land Consulting Ltd. Bear Land Services Bennett Jones LLP Canada West Land Services Ltd. CGI Challenger Geomatics Ltd. JOIN US ON APRIL 14, 2016 AT COWBOYS DANCEHALL FOR BARNBURNER 2.0 IN SUPPORT OF ALBERTA 4-H FOUNDATION. CAPL’s partnership with 4-H not only provides D.R. Hurl & Associates Ltd. for enriching experiences for youth across the province, it also L W Survey creates a positive image and recognition of our Association in the Marquee Land Services Ltd. towns and communities in which we work. McNally Land Services Ltd. Last year’s Barnburner was a huge success with 500 plus in FortisAlberta Inc. Integrity Land Inc. Pembina Pipeline Corporation attendance! BB 2.0 promises to be another great CAPL network- Precision Geomatics Inc. ing event so don’t miss out. Doors open at 4:00 p.m. Tickets Progress Land Services Ltd. are $40.00 each, and bring a friend for $20.00. Tickets include Prospect Land Services (BC) Ltd. a drink and appetizers provided by Zen8 from 4:30–6:00 p.m. Quorum Business Solutions Inc. Performances feature music stars and local talents Blake Reid, Scott Land & Lease Ltd. Two Shine County and Maureen Murphy. Spur Resources Ltd. Register at the CAPL website at www.landman.ca or visit Synergy Land Services Ltd. www.cowboysnightclub.com or www.getqd.com/barnburner2. Taylor Land Services For more information, please contact: Touchdown Land Consultants Ltd. Traverse Landgroup Ltd Janice Redmond at [email protected] Terry Cutting at [email protected] Vertex Resource Group Ltd. m W W W. P R O G R E S S L A N D . C O M 1.866.454.4717 11 THE NEGOTI ATO R / APRIL 201 6 12831 – 163 Street, Edmonton, Alberta T5V 1M5 Red Water or Murky Water? ONE OF THE MOST ANTICIPATED COURT DECISIONS OF THE YEAR, AT LEAST IN THE OIL AND GAS INDUSTRY, WILL COME FROM THE RECEIVERSHIP PROCEEDINGS OF REDWATER ENERGY CORP. (“REDWATER”). The case arises from a recent exposed to the risk of being unable to recover funds from the sale of an insolvent company’s assets and (ii) industry paying increased levies to the Orphan Well Fund to fund the end of life obligations of unsold assets that end up in the Orphan Well Association. deadlock between receivers and the Alberta of assets of an insolvent company. Receivers What Caused the Problem in Receivership Sales? have recently claimed that the assets of an insol- A vent company are potentially unsellable due to (“LMR”) is a calculation of the value of its deemed WRITTEN BY the restrictions imposed by the AER’s Licensee assets divided by its deemed liabilities in the LLR CAROLE HUNTER Liability Program”). Program, the Large Facility Liability Management & HAZEL SAFFERY This deadlock raises a number of potential Program and the Oilfield Waste Liability program. problems including, (i) secured creditors being A licensee is required to maintain a LMR of BURNETT DUCKWORTH & PALMER LLP THE NEGOTIATOR / APRIL 2 016 Energy Regulator (the “AER”) regarding the sale 12 Rating Program (“LLR company’s Liability Management Rating 1.0 or above and if it has an LMR of less than 1.0, to place a secu- commencement of the receivership proceedings owed ATB rity deposit with the AER to raise its LMR to 1.0. The failure to approximately five million dollars. Grant Thornton Limited was maintain an LMR of at least 1.0 or to post a security deposit with appointed receiver of the assets, undertakings, and property of respect to such LMR results in enforcement proceedings, includ- Redwater (the “Receiver”) on May 12, 2015. ing possible restrictions on transferring assets. The security In the course of insolvency proceedings, a receiver normally deposit is earmarked to cover the abandonment and reclama- devises a procedure to sell the assets of the estate of the tion obligations (“A&R Obligations”) of a licensee’s assets when a insolvent entity to satisfy, in whole or in part, its debt obli- licensee is otherwise unable to do so. gations to creditors. Rather than moving directly to a sales When oil and gas assets are transferred, the LMR of both process, the Receiver took a novel approach to the problem the vendor and the purchaser are required to maintain an LMR that had been faced in selling insolvent producers’ assets. greater than 1.0 post-transfer. Where a transaction will result in The Receiver assessed the economic marketability and salea- either party falling below 1.0, the AER will require that a security bility of Redwater’s wells and associated facilities and pipelines deposit is posted by the party having an LMR less than 1.0 to bring (the “Licensed Assets”). Following its economic assessment, the its LMR back up to 1.0 before the AER will approve the transfer. If Receiver advised the AER that it would only take possession of 19 a party is an insolvent company with more liabilities than assets, producing Licensed Assets (the “Retained Licensed Assets”) and or will be in that position once the sale process gets underway, that it was not taking possession of and renouncing any interest the AER can effectively halt the transfer process once the vendor’s in the remaining 72 Licensed Assets (the “Renounced Licensed LMR falls below 1.0 if no one is prepared to pay the necessary Assets”). In the Receiver’s view, the renunciations meant that security deposits enabling the transfers to be approved. neither the Receiver nor the estate of Redwater had any further obligations with respect to the Renounced Licensed Assets. The Background on Redwater Energy The rationale for the renunciations was the disproportionate Redwater was a publicly-listed junior oil and gas company deemed values versus the associated deemed liabilities for the that began operations in Alberta in 2008. Redwater had credit producing and the non-producing Licensed Assets. The Retained facilities with the Alberta Treasury Branches (“ATB”) and at the Licensed Assets have an estimated value of $6,389,762 against Pointing you in the right direction At Can-Am Geomatics it’s business as usual delivering the same great service and cost effective solutions our clients are used to. Our goal is to be your Geomatics provider of choice by conducting business with safety, honesty, integrity and professionalism. Contact us today for your next project! Calgary Edmonton Grande Prairie Swift Current Fort Nelson Fort St. John @CanAm_Geomatics 1 800 478 6162 | canam.com 13 THE NEGOTI ATO R / APRIL 201 6 Can-Am Geomatics Corp. deemed liabilities of $2,247,716; whereas the Renounced Licensed Obligations associated with such asset. The AER also expressed Assets have an estimated value of $547,107 versus deemed liabil- concern that an overwhelming number of wells and facilities ities of $5,251,977. It was the Receiver’s position that the lack of would become orphans if this strategy succeeded, which could value or possibility of future production, coupled with signifi- collapse the orphan regime in the province. cant liabilities meant that even with creative packaging of the would likely compromise the sales process. The AER resisted this The Issues before the Court of Queen’s Bench of Alberta position and encouraged the Receiver to attempt to package all On December 16 and 17, 2015, the Court heard the competing the Licensed Assets together. To our knowledge, a package trans- applications of the AER and the Receiver/ATB which focussed on action was not attempted by the Receiver. two main issues: Licensed Assets, the inclusion of the Renounced Licensed Assets The AER strenuously objected to the Receiver’s ability to make the renunciations. It was the AER’s position that the 1.Whether the Receiver has the ability under the Receivership Receiver must comply with all requirements of the Oil and Order or section 14.06 of the BIA to renounce any of the Gas Conservation Act, the Pipeline Act and the Environmental Licensed Assets. Protection and Enhancement Act and the associated regulations 2. Whether the AER can deny, impose conditions on, or frus- (the “AER-Administered Legislation”) as well as AER rules trate the legislative purpose of the BIA by requiring security such as Directive 006, in addition to their duties under the deposits be paid by transferors for transfers of the Licensed Bankruptcy and Insolvency Act (the “BIA”) and the provisions of Assets when the insolvent company’s LMR will fall below the order appointing the receiver (the “Receivership Order”). 1.0 post-transfer. In the AER’s view, the responsibility for A&R Obligations attaches at the moment of issuance of, or transfer of, a licence and such A full discussion of the arguments made by the Receiver, ATB, a responsibility cannot be avoided through insolvency. In other the AER, the Orphan Well Fund, the Canadian Association of words, the AER’s position is that a licensee benefits from a Petroleum Producers and the Solicitor General are beyond the licensed asset and conversely should be responsible for the A&R scope of this article. A glimpse into what the future holds if the Experience. Stability. Value. 25 years proven. THE NEGOTIATOR / APRIL 2 016 For over 25 years we’ve been providing professional land services, delivered by the industry’s most experienced team. – 25 YEARS – We’ve seen every upturn, downturn, crash, boom and bust. And we can help you through all of them. Call us at 403-261-1000 for some peace of mind on your next project. scottland.ca 14 AER or the Receiver/ATB is successful does, however, give secured from the sales process, it has the potential to reduce the burden lenders and industry participants a lot to think about. on the Orphan Well Fund since it does not allow the receiver to predetermine that non-producing assets have no strategic Potential Outcome if the Receiver is Successful or economic value and should be orphans. If the AER requires If the Receiver prevails in its arguments, the potential for secured a security deposit to facilitate a transfer, a situation could arise lenders to push companies teetering on the edge of insolvency where the proceeds of the proposed sales will not be sufficient becomes a real possibility. If only high value, producing assets to generate proceeds for the creditors, secured or otherwise. are being sold, there is a much greater likelihood that the sale While it is difficult to predict the impact on the cost of borrow- process will produce higher recoveries for the creditors since ing, it is possible that the lending practices of secured creditors purchasers would not have to take on the liabilities associated could change dramatically as a result of this case. While the LLR with the non-producing assets. The potential for large numbers Program has been in existence (with the same restrictions on of non-producing assets becoming orphans also increases if the transfers) for several years and lenders typically account for A&R Receiver is successful. This would increase the financial burden Obligations, lenders may be more conservative in their borrowing on the oil and gas industry since without the collection of the base calculations knowing that they may only recover funds after security deposit normally paid on the license transfer, the indus- several millions of dollars of security deposits are paid to the AER try will be funding the A&R Obligations of the additional wells in an insolvency. and facilities in the Orphan Well Fund. Conclusion Potential Outcome if the AER is Successful Although the Redwater decision will address some interesting If the AER prevails in its arguments, receivers will have to market issues, it will be released at a time when the oil and gas industry all of the affected assets, determine the offer that best maximizes does not need any more challenges to grapple with. There are no the recovery for the creditors, and work cooperatively with the winners in the Redwater decision and the financial implications AER to deal with the licensed assets that were not sold in the sales for both industry and the secured lenders will leave everyone process. Although this may ultimately result in lower recoveries treading in murky waters. m British Columbia 207 10139 - 100 St. Fort St. John BC V1J 3Y6 T: 250-261-6644 F: 250-261-6915 Alberta Box 847 10912 - 100 Ave. Fairview, AB T0H 1L0 T: 780-835-2682 F: 780-835-2140 Toll Free: 888-835-6682 Negotiator Feb 2016.indd 1 2/12/2016 2:00:54 PM 15 THE NEGOTI ATO R / APRIL 201 6 Visit us online at www.roynorthern.com Royalty Review Report THE NEGOTIATOR / APRIL 2 016 ON JANUARY 29 2016, I ATTENDED THE ROYALTY REVIEW PRESS CONFERENCE, ON BEHALF OF CAPL, WHERE THE GOVERNMENT OF ALBERTA ROLLED OUT THE ROYALTY REVIEW REPORT and the • Encourage diversification opportunities such as value-added processing, innovation and other forms of investment in Alberta, and • Support responsible development of the resource. plan for a new royalty structure. The panel was tasked with four challenges: Working through this lens, it quickly became apparent to the panel that Alberta’s petroleum • Provide optimal returns to Albertans as owners of the resource, • Continue to encourage investment, 16 industry is failing in a number of areas; costs are high, investment is drying up and going elsewhere, and Alberta is lacking market access. WRITTEN BY GARY RICHARDSON, PSL DIRECTOR, PUBLIC RELATIONS CAPL Furthermore, we have some, if not the most complicated geological basin in the world. So things are not good on a number of fronts. To the specific task of reviewing the royalty regime, the panel identified that it is too rigid and is not adaptable to changing technology, innovation and the demands of today’s market. The panel also found that royalties in Alberta are comparable to other jurisdictions – about average. The state of the oil and gas industry has evolved over the past two decades, and has changed drastically over the past five. Our biggest market is now our biggest competitor. The US is energy independent thanks to shale oil and gas development. Indeed the US has lifted the embargo placed on oil exports in the 70s at the height of the Arab oil crisis and today oil is being shipped WE... – HANDLE CROWN LAND SALES ACROSS WESTERN CANADA out of Houston. What was once a viable market has essentially been siphoned off in the wake of the gush of oil and gas from American shale plays. The panel looked at all of these factors and reasoned that a simple rate change was not what was needed nor wanted. What was needed was a royalty more responsive to revenue and costs. The panel has recommended, and the Government of Alberta has accepted, that going forward, there will be no change to royalty – OFFER DISCOUNTED OR FREE* LAND SALES IN SASKATCHEWAN AND ALBERTA structure for existing wells or new wells drilled up to December 2016. A grandfathering! New wells in 2017 will be subject to a modernized framework. There will be no change to the oil sands royalty format for the foreseeable future. Starting in 2017 the royalty structure will be designed to reflect a revenue minus costs approach. To accompany this, a formula will be developed to calculate Drilling and Completion Cost Allowances for each Call our CROWN HOTLINE for more details. 403.930.3310 *Some conditions apply. well based on vertical depth and horizontal length. This D&C cost allowance will then be used to develop a Capital Cost Index reflecting current average costs. The devil in the details is yet to be worked out but it is intended to be unveiled by March 31. Presumably this will provide nine months to consult and modify the formula before it is rolled out on January 1, 2017. There will also be a provision to report costs that are transparent and a website will be available for the public to scrutinize these costs. The oil sands royalty structure will stay in place. However, it became apparent to the panel in discussions with Albertans that there is a lack of confidence in the reporting of costs in the oil sands. To remedy this, the panel recommended certain measures to ensure costs reported are transparent, reasonable and current. While the industry is struggling with current market conditions the panel still sees opportunity for value-added processing in gas and upgrading of bitumen. The use of gas as a bridge from ment’s climate plan. Gas could be used as feedstock for upgrader processing to lighter products, fertilizers and consumer products. It is unlikely that Canada could ever compete in North America for new refineries, given our geography, distance to market and Pursuing Perfection synergyland.ca | 403.283.4400 labour costs but some opportunities may be realized. 17 THE NEGOTI ATO R / APRIL 201 6 coal fired electricity to renewables partners well with the govern- As the new royalty regime unfolds the GOA will be looking at • A pply a flat rate of 5% until cumulative revenues from a well operations, operators and their costs and finding opportunities equal the D&C Cost Allowance, followed by higher post-payout to incent efficiencies. There has been no indication of penalizing • In the transition to the modernized framework, calibrate the to bring down costs, but on the balance sheet those who are combination of D&C Cost Allowances and post-payouts to more efficient will eventually outperform those who are not. target the industry returns and Albertans’ share of value that The nuts and bolts of the report can be found in the panel’s recommendations: ing incentives that are independent of high or low prices. As the GOA moves forward with the implementation of the royalties will remain in effect for 10 years on investments panels recommendations, a number of things have yet to be already made. worked out. As mentioned, a task force will be delivering more approach • Provice the Province and investors clarity regarding the recouping of costs. • Harmonize the structure across crude oil, liquids and natural gas to remove distortions in the current format. • Eliminate the multitude of existing drilling programs and information on how certain formulas will be calculated by the end of March this year. It is also interesting to note that government, while they did not enter this review with any preconceived notions, were none the less surprised by certain facts such as the inevitable loss of our biggest market, the US, due to its energy independence with the shale revolution. That realization makes the goal of market access even more significant. The report will incentives and replace with permanent formulas to calculate be available on line through the GOA website at: Drilling and Completion Cost Allowances for each well, based http://www.alberta.ca/documents/royalty-framework-report.pdf. m on depth and horizontal length. • Calibrate the D&C Cost Allowance annually to a Capital Cost Index to reflect current average costs. THE NEGOTIATOR / APRIL 2 016 are achieved under the current structure, accounting for exist- • Apply all changes to new wells only as of January 2017. Exiting • Design a royalty structure that reflects “revenue minus costs” 18 royalty rates that run with prices. operators who are not innovative or adapting new technologies The Negotiator’s Messages From the Board of eventually moving to a newer, more contemporary framework. CAPL is going to be looking at the items currently on the website that add value to our business, and deciding whether or not there is a better way (and less costly way) to do something. Currently, and over the years, CAPL has had to customize many of the functions on our website, so we will also be taking a closer look at how other organizations run their web processes. New projects and ideas are continually being discussed, but it may be best to slowly build these new projects on the new framework rather than having to build them twice. This, in the long run, will Technology ANOTHER CAPL BOARD YEAR IS ALMOST AT A CLOSE, AND AFTER TWO YEARS, NOT ONLY ON THE BOARD, but with manag- allow CAPL to run more efficiently and to also grow alongside ing the Technology Portfolio, I’m opportunities for future website development, please contact amazed how quickly the time has Denise or myself at the CAPL office for more information. other Associations in the industry. It’s unfortunate that technology is a costly requirement, however by continuing to invest in our future, we simply continue to add more and more benefits for our membership. If anyone is interested in sponsorship gone by. The past year was a busy time for technology, espe- These will be interesting times ahead for the Technology cially since completing our new website at the end of 2014. Portfolio and I am thankful for the opportunity to have been a With the hard work and dedication of Andrew and Tony of Siteline Solutions, and Irene in the CAPL office, we have part of the “Tech World” over the past two years. m successfully finished all major projects to date, including some Mandy Cookson additional items. Some of these projects include: uploading Director, Technology all available Business Forms on to the website in order for Members to easily download these forms in a PDF version; having all online Social and General Meeting Registration up Vice President MY SECOND TERM WITH THE CAPL BOARD BEGAN IN MAY 2015 as your Vice President having and running; and working with the PR Committee to create the online CAPL Calendar which now has dates that can be changed and updated when necessary for our General Meetings and Education Courses. taken Looking to the future, as everyone knows in this day and age, the reins from our now our expectations of technology continue to expand and CAPL’s President Nikki Sitch. With Nikki’s website is no spring chicken. Unfortunately, CAPL’s website is sixth year on the Board, the job going to be faced with the challenge of keeping up with the addi- never skipped a beat because of tional requirements we place on it every year, especially when the work done by Nikki and because we have a high we continue to add increased functionality for our members. functioning Board. So Nikki – much appreciated! This will eventually require an upgrade to the entire framework. CAPL Office implemented in 2006/2007, which arguably does not seem that Past President Michelle Radomski and Nikki Sitch deserve long ago (especially when some of the agreements we deal with the thanks for the revamp of the office staff’s evaluations, job can date back to the ’60s or ’70s!). However, our current computer descriptions, benefits and goal setting behaviours back two technology we operate today, in the tech world, is becoming years ago. With that foundation I was able to establish monthly obsolete and has since been making changes to the website staff meetings with goal achievement as a driver. Denise, Karin, more and more timely (and costly) with every project we add to Irene and Kaitlin all work on various CAPL committees as well, it. For example, if you were still trying to operate Windows 98 on so we have an abundance of potential overlaps when requests your computer, or if you still had an iPhone 3 – any new updates come pouring in on a daily basis. We have had our first Privacy required for your computer or iPhone would not be supported by Report and Audit and of note – I have seen first-hand over the these older operating systems. past 4 months the personal care and attention given to members This being said, moving forward over the next 2-3 years, during their times of sorrow and triumphs. With Denise’s leader- CAPL will be reviewing our current processes with the intention ship we have saved money in many ways heretofore never done. 19 THE NEGOTI ATO R / APRIL 201 6 To put it simply, CAPL is operating on the original framework first Well done to each of them for the myriad of responsibilities and Membership their solid accountability for them. You are the reason we exist as a Board and our inter-industry relationships need to be constantly re-evaluated by what we General Meetings plan, say and do, both between companies and with our various Solid leadership throughout the year while remaining flexi- levels of government. Our Board seeks to be proactive and create ble to change characterizes Steve Brisebois’s leadership and environments for professional members to be creative, to learn, his volunteers on this committee. Managing the hotel pricing, to network with one another and to be proud of the organization our fluctuating attendances, keynote speaker availability and from top to bottom. Going forward the road will be rocky but membership expectations are all a part of the job, but a demand- we have proven time and again how resilient we are and what ing part as well. I look forward to the coming events in the next good instruments of change we can be. We embrace change and term and know that these are well in-hand. make it work for us, not against us. Make sure you are heard and provide feedback to your Board and committees. Conference Although we did the right thing and were able to delay the 2015 Thank you to our CAPL staff, the Board, members, and spon- Conference, we are in the midst of planning the 2016 Conference sors for making this journey more respectable and workable as the penalties not to do so are severe to the Association. every day. With the support of members we can make the St. John’s Conference a memorable one for those able to support and Larry B. Buzan, P.Land B.Comm attend it. Thanks throughout for Colin McKinnon’s leadership Vice President and the tremendous work done by Leanne Calderwood, Director of Global Accounts, at Helms Briscoe to steer us once again THE NEGOTIATOR / APRIL 2 016 through the myriad of changes we needed to make. 20 m Board Briefs access to stay competitive. Gary, Larry, Nikki and Bill attended the FUSE Gala at the U of C and had the opportunity to chat with several PLM students who were also in attendance. The key discussion items at the CAPL Board of Directors’ Meeting held February 2, 2016 at the CAPL Office were as follows: In Attendance Absent N. Sitch L. Buzan A. Webb J. Murray T. Lefebvre M. Creguer K. Gibson B. Schlegel P. Mandry R. Stackhouse N. Millions G. Richardson M. Cookson M. Radomski Guests • Mandy Cookson advised the Board that the Technology portfolio is reviewing the timeline associated with updating the Member Profile section of the website as well as ways to enhance the CAPL e-mailer. Further discussion is required regarding software upgrades. A small committee is to be formed to review and report back to the BOD on timelines and costs. • Ryan Stackhouse updated the Board that the Merit Awards will be held May 26, 2016. Ryan and his committee asked that the Board put forward any members they feel worthy of a merit award. The goal will be to receive nominations from members between February and March to provide ample time to review the various nominations. All members are asked to nominate any members they feel deserving. • Andrew Webb presented a Treasurer’s Report as at January 31, 2016, showing CAPL investments totalling $792,125.07 CDN plus • Ryan Stackhouse advised the Board that the results of the a cash balance of $265,593.63 CDN for a total of $1,057,718.70 Insurance Survey varied. This was anticipated given the various CDN. The CAPL Scholarship Fund has a balance of $241,380.39 backgrounds and world views of CAPL’s many members. Of note, CDN. There was one transfer made from the Scholarship 34% of CAPL’s Active and Life members responded with approx- Trust Fund for $6,000.00 since the last report, to cover 2015 imately 25% of those respondents providing written feedback Scholarship Awards. in the open forum. The Board will analyse the final results and make a decision once all options have been considered. • Ryan Stackhouse presented the Board with a motion to endorse the recommendation of the Membership Committee to accept • Larry Buzan advised the Board that the 2016 conference committee one candidate for Active Membership, two candidates for Interim members consist of Colin McKinnon, Kelly Piper, Colleen Allen, Membership, and two candidates for Student Membership in the Denis McGrath, Dave Bernatchez, Mary Gothard and himself. Canadian Association of Petroleum Landmen. In addition, the The conference committee has been running various scenarios to Board of Directors approves the request from ten members to determine the optimal path forward. The committee is working change their status from Active to Senior and nine members have with Helms Briscoe to ascertain other options as well but largely to allowed their memberships to terminate. connect the numbers and guarantees versus costs. • Larry advised the Board that he and the office staff have Government of Alberta’s Press Release of the Royalty Review report. reviewed the Privacy Act, which impacts CAPL on a federal and Gary also reminded the Board that he wrote an e-mail that was provincial level to differing extents related to the recent provin- distributed to CAPL’s members February 2, 2016, which detailed cial review set to be completed in December 2016. The CAPL has the Government of Alberta’s conclusions from the Royalty Review made itself a best-practices office for this and has designated process. The most important next step is the calculation of the Denise Grieve as a Privacy Officer. CAPL has produced its first average drilling and completion costs to surmise an average cost of ever Privacy report which will be audited shortly. Not-for-profit operations, which will feed into a formula for Payout (which should is the same as Non-profit insofar as Provincial definitions are be provided by the end of March). The Government of Alberta is concerned for entities created under the Societies Act and also interested in providing incentives to companies to research although CAPL would not be subject to all of the privacy public and develop technological innovations and other value-add oppor- and for profit firms are, CAPL is ready. tunities. The Government of Alberta is now intimately aware of the challenges that the Industry faces, especially in the context of • Paul Mandry updated the Board that two positions were posted our biggest consumer (the U.S.) now being our biggest competitor on the website. One is for an Education liaison and the second bringing new light to the fact that Canada requires new market was as a B.C. Regulations liaison. Also, as of March 31 the Alberta 21 THE NEGOTI ATO R / APRIL 201 6 • Gary Richardson updated the Board that he attended the Government will impose a process for Metis Consultation Abandoned Well committee is anticipating having finalized processes, which, will be on the same terms as the more reports ready for review mid-March. common First Nations Consultation process. • Michelle Radomski advised the Board that the Elections commit• Bill Schlegel updated the Board that there are five courses tee is seeking nominations for new candidates to run for the various available board positions that will be vacated this year. happening in February (the bulk of which are Jim’s mini-Operating Agreement and Farmout and Royalty Procedure courses). Jim’s courses are looking good for attendance. • Nikki Sitch updated the Board that CAPL allowed two petitions to be completed by CAPL members at the CAPL January Management Networking Night at the Westin with 395 attend- • Jordan Murray advised the Board that the CAPL Ski Trip will ees signing the petitions out of slightly over 400 attendees. be held Friday February 5, 2016 and the CAPL Curling Bonspiel will be held Thursday February 18, 2016. Additionally, the CAPL Squash Tournament is scheduled for Saturday March 12, 2016. • There was no old business; and • Noel Millions updated the Board that his committee is working to update the Professionalism manual by year end and to put the • Nikki Sitch reminded the Board of the following: • The next Board of Directors’ Meeting will be on March 1, 2016.; and update on-line for access by our members. • The next General Meeting will be the Thursday February 18, • Ted Lefebvre updated the Board that various initiatives have been outstanding for several years within CAPP and Government 2016 evening General Meeting at the Westin. m which is causing industry problems. Unfortunately, there have Jordan Murray been so many changes within recent months and years that Secretary/Director, Social have resulted in a high degree of confusion for industry. Michelle Creguer updated the Board that the CAPLA/CAPL • THE NEGOTIATOR / APRIL 2 016 Call us. We’re so bored we’ll talk about anything. 403.250.7240 22 Get Smart The CAPL Education Committee is pleased to present the following courses: Professional Ethics: Theory and Application April 19, 2016 8:30 a.m. to 4:30 p.m. This seminar is intended to increase the understanding of ethics and the dimensions to ethical behavior by stimulating the ethical thought process, giving a basic introduction to the nuances of ethics, introducing a number of methods used in ethical deci- April 2016 sion making, and providing a forum for discussions with respect Pipeline Plain Talk Series - Part 1 to land related ethical issues. Case studies will encourage class Business Luncheon (PSL®) NEW discussion and give each participant insight into the morality vs April 5, 2016 11:30 a.m. to 1:30 p.m. Part 1 of the Pipeline Plain Talk series will explore the new realities of developing pipeline projects in Canada in response to stake- legality question. Indian Oil & Gas Canada April 21, 2016 1:00 p.m. to 3:00 p.m. holder concerns. This 1.5 hour seminar will focus on the internal and external challenges faced by land and other stakeholder The session provides an overview of Indian Oil & Gas (IOGC), engagement professionals in preparing and managing pipeline the Indian Oil and Gas Act and regulations, IOGC’s role in assist- “new build” applications under provincial and federal regulatory ing First Nations develop their oil and gas, resources the two frameworks. An overview of the National Energy Board’s (NEB) key approaches to negotiations, and a review of IOGC’s current application process for pipeline life cycle will be presented and subsurface and surface disposition processes, including applica- contrasted to the Alberta Energy Regulator’s (AER) process. ble federal legislation and regulator requirements. 1990 and 2007 CAPL Operating Procedures (2 Day Course) CAPL 2015 Operating Procedure, Farmout & Royalty April 13 & 14, 2016 8:30 a.m. to 4:30 p.m. Procedure & Overriding Royalty Procedure – Mini Session April 26, 2016 8:30 a.m. to 11:30 a.m. The 1990 CAPL Operating Procedure is the industry benchmark document for operations conducted on jointly held lands. It sets The 2015 CAPL Operating Procedure, 2015 CAPL Farmout & forth procedures for dealing with AFEs, Operators’ rights and Royalty Procedure and 2015 CAPL Overriding Royalty Procedure duties, indemnification and liability, insurance, marketing, inde- were endorsed by CAPL late in 2015 after three industry comment pendent operations, facility construction, rights of first refusal, cycles and further iterations with commenting parties in the fall. and many more items of concern that arise between joint inter- The primary focus of the updates was to increase the func- est parties. In this seminar, the 1990 and 2007 CAPL Operating tionality within the documents to deal with horizontal wells, Procedures will be discussed in detail with particular emphasis particularly in the context of industry’s experiences with longer on their day-to-day application. Comparisons will be made to reach, more technically complex horizontal wells. The secondary previous CAPL Operating Procedures in certain key areas. focus was to make such other changes as were warranted based on industry’s experience with the prior versions of the docu- ROFR Issues: An Interpretive Approach April 13, 2016 8:30 a.m. to 4:30 p.m. ments. Given the major changes already made in the 2007 CAPL Operating Procedure and the limited concerns about that document raised in the comment process, the changes were naturally The session will be presented in two parts. The morning will be much greater in the updates to the 1997 CAPL Farmout & Royalty devoted to a presentation of legal principles relevant to ROFR Procedure and the 1997 CAPL Overriding Royalty Procedure. This half day course is designed as an inexpensive way to analyzing and responding to unusual ROFR scenarios. In the assist attendees and organizations in their transition to use of afternoon, a senior landman will join lawyers in a round table the new documents by helping them understand the case for discussion of ROFR issues and specific fact scenarios gathered by change, by familiarizing them with the material differences in the presenters, and submitted to the panel by the course partici- the updated documents, by allowing them to see the responses pants. Prospective course participants are encouraged to submit of their peers in other companies to the content and by providing their favourite challenging ROFR problem to the instructor prior them with a binder of additional reference materials that they to, or at the seminar for consideration and discussion in the can use when reviewing the materials in more detail and consid- afternoon round table discussion. ering a shift to the updated documents. 23 THE NEGOTI ATO R / APRIL 201 6 situations, and a suggested interpretative methodology for Surface A&D (morning) (PSL®) April 28, 2016 8:30 a.m. to 12:00 p.m. Facilities Overview (PSL®) May 10, 2016 8:30 a.m. to 4:30 p.m. This seminar is designed to provide an overview of surface A one day seminar for surface land agents will give an overview land issues in the acquisition and divestiture of operated prop- of many key aspects of oil and gas field operations, facilities and erties. Topics include a sample checklist, lease and agreement practices. Upon completion of the course, land agents will have conveyancing, well licenses, LLR review, transfers, easements/ a basic understanding of the key aspects involved in field opera- rights-of-way, transfer of caveats, road use agreements, notice tions, including exploration, production and abandonment. to landowners/occupants, electronic processes in Crown dispositions, license transfers, and environmental approvals. The course is presented from an Alberta perspective, but much of the mate- Oil and Gas Land Surveying: An Alberta Perspective (PSL®) May 11, 2016 8:30 a.m. 12:00 p.m. rial and process is relevant to other jurisdictions. Oil and Gas Surveying: An Alberta Perspective will briefly introduce Royalty Calculations April 28, 2016 land surveying, the role of the professional Land Surveyor, includ- 1:00 p.m. to 4:30 p.m. ing areas of practice and legislation, regulation and standards that are followed. An in depth discussion of boundaries, evidence, This half-day seminar will focus on a case study approach to field surveys and survey plans will follow, including a look at the examining the complexities and implications of various royalty Alberta Energy Regulator, ESRD, Enhanced Approval Process and clauses and calculations. Land Titles with respect to survey processes and plans. Technology in measurement and applications will also be discussed. May 2016 Acquisitions and Divestments: The Paper Chase May 5, 2016 8:30 a.m. to 4:30 p.m. Saskatchewan P&NG Regulations May 12, 2016 8:30 a.m. to 4:00 p.m. This course will cover the procedures, processes and tips necessary This seminar will provide an overview of the Saskatchewan to properly time, evaluate, create and disseminate the flow of paper, Petroleum and Natural Gas Regulations. Emphasis will be placed from the beginning to the end of an acquisition, divestment or trade. on the land tenure system, lease continuation, posting and This will include scheduling, due diligence, closing and post-closing bidding on Crown land. A question and answer period will follow responsibilities. Documentation such as Land Schedules to the the presentation. Purchase & Sale Agreement and Right of First Refusal Notices, as well as numerous specific conveyances, post-closing and tracking documents will be reviewed. A comprehensive reference binder 2015 CAPL Farmout and Royalty Procedure TWO DAYS May 17 & 18, 2016 8:30 to 4:30 p.m. containing examples of those items will be provided. The focus of this course will be on a conceptual review of the British Columbia P&NG Tenure Continuations NEW COURSE May 10, 2016 8:30 a.m. to 12:00 p.m. major provisions of the documents and their evolution over time. This review is largely designed to offer attendees comfort and confidence with the 2015 versions of the documents. A case study approach to BC Tenure Management, covering considerations from posting strategy through to maximizing Pipeline Plain Talk Series - Part 2 the value of capital decisions that impact ability to continue Business Luncheon (PSL®) NEW lands with targeted/specific capital expenditures, groupings, May 17, 2016 11:30 a.m. to 1:30 p.m. THE NEGOTIATOR / APRIL 2 016 and related undertakings that ultimately result in the submission of a Continuation Application(s). This seminar includes an Part 2 of the Pipeline Plain Talk Series is a 1.5 hour seminar which overview of the BC Tenure Continuation regulations along with will focus on pipeline company management systems and programs various strategies and undertakings that can be considered and necessary for regulatory compliance and to address stakeholder employed in the life cycle of lands: posting lands, drilling, group- expectations throughout the entire lifecycle of the company’s ing, submitting continuation applications. facilities. The seminar presents an overview of the management system and programs under the National Energy Board (NEB) and Alberta Energy Regulator (AER) regulatory frameworks. 24 Well Spacings and Holdings May 19, 2016 from project kick-off to licensing. Areas discussed include the 8:00 a.m. to 4:30 p.m. acquisition process on both private property and crown lands, applicable acts and regulations, compensation calculations, Changes to the spacing regulations and Directive 065 along with documentation requirements and addendums, survey plans, the increase in horizontal well drilling have led to confusion and AER participant involvement and consultation requirements, misunderstanding as to what constitutes an on-target, compliant AER non-routine license applications, Surface Rights Board appli- well. The objectives of this course are to familiarize participants cations and how to use these processes to gain access to land. with the current regulations and learn how to interpret them While the focus of the course will be from an Alberta perspective, correctly to ensure the wells they drill will not be subject to much of the material is relevant to other jurisdictions also. off-target penalties or enforcement action (due to non-compliance) from the Alberta Energy Regulator (AER). Emphasis will be placed on reviewing existing regulations (including holdings) Economic Considerations for Land Deals TWO DAYS May 31 & June 1, 2016 8:30 a.m. to 4:30 p.m. in both Alberta and British Columbia and the consequences of variation from normal spacing units through practical problems. The instructor will cover the basics of measuring project value Information resources will also be discussed. from an economic perspective. The advantages and disadvantages of alternative methods of value measurement will be Acquisitions and Title Review: A Practical Guide NEW DATE May 25, 2016 8:30 a.m. to 4:30 p.m. discussed, with an emphasis on discounted cash flow analysis and the related profitability criteria. Techniques for incorporating risk analysis into evaluations will be presented. Practical exam- This seminar will focus on the practical aspects of title and ples and applications of the material covered will be provided. due diligence reviews when acquiring assets in Western Canada. Participants will have several opportunities to derive solutions to Attendees will benefit from the suggestions presented to make the problems. Participants are requested to bring a simple arithmetic title review process involving outside counsel more cost-effective calculator to the seminar. and efficient, enabling you to interpret the title opinion and use it as a working document in your land administration system. In addition, guidelines and procedures will be presented to enable internal Overcoming the Five Dysfunctions of a Team May 31, 2016 8:30 a.m. to 4:30 p.m. land personnel to conduct due diligence reviews in circumstances where the involvement of outside counsel may not be merited. This seminar is built on the assumption that great teams Finally, the process of deficiency rectification will be discussed as attract great team players, and that great team players on well as alternatives for dealing with unresolved deficiencies within great teams achieve more collectively than they could on their the context of the business deal and the sale agreement. own. Using Patrick Lencioni’s book The Five Dysfunctions of a Team as a template, this day long seminar teaches participants Surface Land Fundamentals May 25, 2016 how to strengthen their teams, improve their self-awareness 8:30 a.m. to 4:30 p.m. and sharpen their leadership skills. The course also includes a number of practical exercises that can be used to overcome The course is designed to provide an overview of how the surface land department works by examining the surface land process hurdles that stand in the way of building an effective team. m Sayer Energy Advisors... The Energy M&A Specialists. For information on our services visit our website: www.sayeradvisors.com or contact Alan Tambosso at 403.266.6133 or [email protected] 25 THE NEGOTI ATO R / APRIL 201 6 Corporate Advisory Property Divestitures Fairness Opinions Valuations Oil Industry Publications Roster Updates New Members The following members were approved by a Motion on March 1, 2016: Applicant Current Employer Sponsors Active Brittany Bennett Surge Energy Inc. Diane Boisclair Margaret Elekes, P.Land Taylor Jensen University of Calgary Robert Schulz Sydney Gault Shameer Jina University of Calgary Robert Schulz Peter Boswell John Covey Aaron Lang University of Calgary Robert Schulz Luxx Oil Canada Ltd. William Macdonald James Moore, P.Land Danielle Schapansky University of Calgary Robert Schulz Patrick Craig Anita Beaudin Steven Stanford Robert Schulz Imperial Oil Resources Steve Brisebois Mike Gardam, PSL Erika Henderson Crescent Point Jeff McManus Energy Corp. Leonard Moriarity, P.Land Active to Senior Phil Haugen, P.Land Independent Barbara Lerner Strike Independent Jeff Rideout, P.Land Howard Parkyn New Brydge Consulting Ltd. Krysten Marek James Armstrong, P.Land Susan Potter Independent James MacLean David Talbot Independent Brian Thom Alexandre Ste-Marie Shell Canada Energy Joel Barrett Alex McCloy Lindsay Reynolds Nexen Energy ULC Colleen Miller Vermilion Resources Cynthia Aksenchuk Ltd. Student Andjela Calic University of Calgary Pauline Crawford Mount Royal University Andrea Gill Eric de Villenfagne University of Calgary Robert Schulz Robert Schulz THE NEGOTIATOR / APRIL 2 016 Elexco_Negotiator qrtrhoriz4CfinPage 1 • Mineral and Surface Leasing • Right-of-Way Acquisitions • Mineral Ownership/Title Curative • Seismic Permitting • Mapping/GIS Services • Abstracts of Title 6/24/11 m On the Move Interim 26 University of Calgary Kevin Archibald Chevron Canada Resources to Independent Akash Asif Independent to Quorum Business Solutions Inc. Anita Beaudin Husky Oil Operations Limited to Independent Jacquie Burke ConocoPhillips Canada to Independent 7:47:54 PM A FULL SERVICE LAND COMPANY SERVING NORTH AMERICA Elexco Ltd. Canada: 1.800.603.5263 www.elexco.com Elexco Land Services, Inc. New York: 1.866.999.5865 Michigan: 1.800.889.3574 Pennsylvania: 724.745.5600 Peter Carwardine OMERS Energy Inc. to Baycrest Energy Ltd. Jocelyn Desmarais Husky Oil Operations Limited to Independent Anton Esterhuizen Independent to Kaisen Energy Corp. Winston Gaskin Standard Land Company Inc. to Vertex Professional Services Ltd. Jered Gracher Independent to Crescent Point Energy Corp. Anne Hand Husky Oil Operations Limited to Independent Rebecca Histed Independent to ARC Resources Ltd. Thomas Hunter Independent to Mechanized Energy Resources LTD. Denise Lokodi Husky Oil Operations Limited to Independent Robert Mardjetko Independent to Novus Energy Inc. Darlene McLaughlin Independent to GDM Systems Inc. Goran Mihaljevic Rife Resources Ltd. to Independent Carla Neumeier Independent to LandSolutions LP Larysa Polunin, P.Land Apache Canada Ltd. to Val Verde Minerals, LLC Russell Ray Visser Deloitte to Independent Mark Rideout Suncor Energy Services Inc. to Pembina Pipeline Corporation Wayne Sampson, P.Land Windtalker Energy Corp. to Manumit Resources Limited Gordon Zaharik, P.Land Independent to G. Bay Consulting Inc. * Surface Land Due Diligence in all A&D Transactions * Land Administration, Acquisition & Management * First Nations Consultation & all Crown Field Services * In-House Staff Placement * Land Postings & Sales Land Services with Depth 27 THE NEGOTI ATO R / APRIL 201 6 m Guest Speaker April General Meeting Bruce Edgelow, Vice-President, Strategic Initiatives ATB Corporate Financial Services Bruce has over 43 years of banking experience with a focus on FOR THE PAST 12 YEARS, BRUCE HAS BEEN RESPONSIBLE FOR HELPING TO BUILD ATB FINANCIAL’S ENERGY BUSINESS AND CAPABILITIES. The Energy lending to the oil and gas industry. Team consists of industry specialists in all aspects of the energy nation, and is a very active participant in community and industry, including: drilling and service, pipelines, utilities, church activities. He frequently speaks at numerous oil and gas midstream, exploration and production and alternative energy. industry seminars on finance. He serves as a Director for the Bruce has most recently stepped into a new role to head up Calgary Counselling Centre. He also sits as a Canadian Women’s strategic initiatives which includes managing ATB’s challenged Foundation Calgary Cabinet Member, Chairs the Peter Lougheed loan portfolio and expanding ATB Corporate Financial Services’ Centre Development Council and serves as a Calgary Health community involvement. THE NEGOTIATOR / APRIL 2 016 He is a Fellow of the Institute of Canadian Bankers, has attained the Institute of Corporate Directors ICD.D desig- Trust Board Trustee. m Land Acquisitions Freehold Mineral Specialists Surface Acquisitions Pipeline Right-of-Way Rental Reviews Damage Settlements Crown Sale Attendance Title Registration Potash Projects Wind Generation Projects Suite 201, 2629 – 29th Avenue Regina, Saskatchewan S4S 2N9 28 2016 CAPL Squash Tournament THE CAPL SQUASH TOURNAMENT WAS HELD ON SATURDAY MARCH 12 AT THE NEWLY RENOVATED GLENCOE CLUB and once again, the competitors were treated Gold to a great night of competitive squash, lots of laughs, camarade- Dentons Canada LLP TORC Oil & Gas Ltd. Quorum Business Solutions Inc. rie, and a fabulous assortment of food, fun and prizes, and even some post-event bowling! The top teams this year were: Silver Crescent Point Energy Corp 1st place: Matthew Rasula, Akash Asif and Vishal Saini Synergy Land Services Ltd. 2nd place: Bryan Edstrom, Rob Heynen, Derick Czember IHS Energy (Canada) Ltd. Ouro Preto Resources Inc. A special thank you to all the Sponsors for their generous contri- Prairie Land & Investment Services Ltd. butions in today’s tough economic environment. Through your Longshore Resources Ltd. support, the tournament was a big success and continues to be one of the premier events on the CAPL social calendar. Also Water Sponsor thank you to the Squash Committee for their hard work in ensur- Integrity Land Inc. ing the squash tradition continues to live on. It was a pleasure having all the new players who came out to try this event – we Dinner Sponsor look forward to seeing you all again next year! Gowling WLG Sponsors Keg Sponsor Platinum Court Sponsors CanEra Inc. Taylor Land Services MSL Land Services Inc. Bowling Sponsor All-Can Engineering & Surverys (1976) Ltd. RPS HMA DLA Piper (Canada) LLP Lawson Lundell LLP Scott Land & Lease Junior Landman Charity Golf Classic REFLECTING THE IMPACT THAT LOW COMMODITY PRICES ARE HAVING ON THE OIL AND GAS INDUSTRY, our Committee felt that it was prudent to again postpone the 2016 Tournament in order to preserve the high standards, goals, and overall success of the event. The Committee would like to thank our Tournament sponsors and attendees as your support tionship with each of you and hope to see you again in 2017. m Josh Wylie 29 THE NEGOTI ATO R / APRIL 201 6 is integral for the long-term success of the Tournament. We look forward to continuing our rela- Save the Date! September 18-21, 2016 All Good Things Must Come to an End AFTER AN ILLUSTRIOUS 25 YEARS OF RUNNING RAIN OR SHINE, THE PLM ALUMNI CHARITY GOLF CLASSIC HAS COME TO AN END. Throughout its history, the well-known golf tournament hosted annually at the Canmore Golf and Curling Club raised nearly $250,000 for worthy causes such as Kids Cancer Care, the PREP Program, and EvenStart and became a staple amongst the land community, providing countless memories and networking opportunities for those in attendance. The current state of the industry along with a changing demographic to our association has resulted in declining tournament attendance year over year. As the organizing committee, we saw the economics of this event becoming extremely challenged not only this year, but moving forward as well and were forced to make the difficult decision to discontinue this great event. The organizing committee would like to extend our heartfelt appreciation to all of the generous sponsors, volunteers and of course to the participants that helped make this a legendary event in our industry over the past 25 years! The efforts and THE NEGOTIATOR / APRIL 2 016 contribution of everyone involved has truly made a difference to so many worthy causes supported by this event. Thanks for 25 great years! m The PLM Alumni Charity Golf Classic Organizing Committee 30 The Social Calendar EVENT DATE TIME LOCATION COST (INCLUDING GST) CONTACT NAME CONTACT PHONE CONTACT EMAIL REGISTRATION DEADLINE CAPL Spring Barnburner Networking Night 14-Apr-16 4:00 PM Cowboys Dance Hall $40.00 First Ticket $20.00 Second Ticket Janice Redmond (403) 669-1953 [email protected] 14-Apr-16 CAPL Annual General Meeting & Elections Luncheon 20-Apr-16 11:30 AM The Westin Calgary Members: No Charge Student Members: $31.50 Non-Members $63.00 Karin Steers Kaitlin Polowski (403) 237-6635 [email protected] [email protected] 15-Apr-16 CAPL Merit Awards and Networking Night 26-May-16 5:00 PM The Westin Hotel Members: No Charge Student Members $47.25 Non-Members: $94.50 Karin Steers Kaitlin Polowski (403) 237-6635 [email protected] [email protected] 19-May-16 * Information and online registration: General Meetings: http://landman.ca/events/general-meetings/ Social: http://landman.ca/events/social-events/ Since 1981 the HURLAND team has been providing comprehensive services in all aspects of Surface Land Acquisition, Administration, Project Management and Public Consultation 31 THE NEGOTI ATO R / APRIL 201 6 SHERWOOD PARK 1.888.321.2222 [email protected] www.hurland.com LAND ACQUISITIONS FIRST NATIONS CONSULTATION PROJECT MANAGEMENT AER CROWN APPLICATIONS ANNUAL COMPENSATION REVIEWS DAMAGE SETTLEMENTS PUBLIC CONSULTATIONS & NOTIFICATIONS CAPL Calendar of Events April Meeting April 5 5 April 20, 2016 CAPL Annual General Meeting & Elections Luncheon Guest Speaker: Bruce Edgelow Vice-President Strategic Initiatives ATB Corporate Financial Services 6 12 13 13/14 14 19 20 20 21 26 27 28 28 May 3 5 10 10 11 11 11 12 17 /18 17 18 19 23 25 25 25 26 31 31 THE NEGOTIATOR / APRIL 2 016 31 32 Board Meeting Pipeline Plain Talk Series, Part 1 (PSL®) Wednesday Alberta Crown Land Sale Tuesday Saskatchewan Crown Land Sale Wednesday ROFR Issues: An Interpretive Approach Wed/Thurs 1990 and 2007 CAPL Operating Procedures Thursday CAPL Barn Burner 2.0 Tuesday Professional Ethics: Case Studies and Core Values Wednesday CAPL General Meeting – Elections Luncheon Wednesday British Columbia Crown Land Sale Thursday Indian Oil & Gas Canada Tuesday CAPL 2015 Operating Procedure, Farmout & Royalty Procedure & Overriding Royalty Procedure Wednesday Alberta Crown Land Sale Thursday Surface Acquisitions & Divestitures (PSL®) Thursday Royalty Calculations m Tuesday Tuesday Board Meeting Acquisitions and Divestments: The Paper Chase Tuesday British Columbia P&NG Continuations (Tenure Management) Tuesday Facilities Overview (PSL®) Wednesday Oil and Gas Land Surveying: An Alberta Perspective (PSL®) Wednesday Alberta Crown Land Sale Wednesday Manitoba Crown Land Sale Thursday Saskatchewan P&NG Regulations (Tues/Wed) 2015 CAPL Farmout and Royalty Procedure Tuesday Pipeline Plain Talk Series – Part 2 (PSL®) Wednesday British Columbia Crown Land Sale Thursday Well Spacings and Holdings Monday Victoria Day Wednesday Alberta Crown Land Sale Wednesday Acquisitions and Title Review: A Practical Guide Wednesday Surface Land Fundamentals Thursday Merit Awards Dinner Tuesday Overcoming the Five Dysfunctions of a Team (Tues/Wed) E conomic Considerations for Land Deals (continues on June 1) (Tues-Sat) Salmon Fishing Trip (continues to June 4) m Monday Thursday Lunch: 11:30 a.m. Where: The Westin Calgary Cost: Members: No Charge Student Members: $31.50 Guests: $63.00 To register, please go the event tab on the CAPL website. Deadline for registration is noon, Friday, April 15, 2016. m May Meeting May 26, 2016 CAPL Merit Awards & Networking Night Reception: 4:00 p.m. (Private Past Presidents and Merit Awards Recipients Reception) Cocktails: 5:00 p.m Dinner: 6:00 p.m Where: The Westin Calgary Cost: Members: No Charge Student Members: $47.25 Guests: $94.50 To register, please go the event tab on the CAPL website. Deadline for registration is noon, Thursday, May 19, 2016. m There are a lot of bases to cover for a successful acquisition or divestiture. Let our team of experts bring your deal home. Calgary I Bentley I Lloydminster I Edmonton I Grande Prairie I Lampman I Toronto I Fredericton LandSolutions can provide fully functional teams or individuals offering specialized support where you need it most. For acquisition or divestiture done right, count on the experts. To learn more, call us toll free at 1.866.834.0008 or visit us at www.landsolutions.ca
Similar documents
September 2003 - Canadian Association of Petroleum Landmen
day of the month prior to the published month. For a copy of our submission guidelines, please contact a member of our Senior Editorial Board.
More information