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
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THE
NEGOTIATOR
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Makeover is Complete – Part II
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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
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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
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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
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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.
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THE NEGOTIATOR / APRIL 2 016
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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 atambosso@sayeradvisors.com
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
janice@actionland.ca
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
ksteers@landman.ca
reception@landman.ca
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
ksteers@landman.ca
reception@landman.ca
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
Info@hurland.ca
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
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