The Magazine of the Canadian Association of Petroleum Landmen May Navigating the Oil and Gas Landscape

Transcription

1 THE NEGOTIATOR The Magazine of the Canadian Association of Petroleum Landmen May 2016 The Extreme Operating Procedure Makeover Is Complete Part III Further Improvements introduced in the 2015 CAPL Operating Procedure Navigating the Oil and Gas Landscape Joint Venture s Important Role in Oil and Gas The Duty to Consult (DTC) and First Nation Economic Accommodation Importance of Involving First Nations

2 Your energy partner Building on over 20 years of recognized oil and gas leadership and valued relationships with CAPL, McMillan continues to be your trusted and experienced energy counsel. For information on the services McMillan s Energy Group can provide, please visit our website or contact Michael Thackray, QC. Michael A. Thackray, QC e: michael.thackray@mcmillan.ca t:

3 THE NEGOTIATOR The Magazine of the Canadian Association of Petroleum Landmen Senior Editorial Board Director of Communications Kent Gibson [ph] Advertising Editors Kevin Young [ph] Trevor Rose [ph] Coordinating Editor Krissy Rennie [ph] Feature Content Editor Mark Innes [ph] Regular Content Editor Martin Leung [ph] Social Content Editor Jason Peacock [ph] Editorial Committee Amy Kalmbach [ph] Nathan Roberts [ph] Dinora Santos [ph] Design and Production Rachel Hershfield, Folio Creations Printing McAra Printing Submissions For information regarding submission of articles, please contact a member of our Senior Editorial Board. Disclaimer All articles printed under an author s name represent the views of the author; publication neither implies approval of the opinions expressed, nor accuracy of the facts stated. Advertising For information, please contact Kevin Young ( ) or Trevor Rose ( ). No endorsement or sponsorship by the Canadian Association of Petroleum Landmen is suggested or implied. The contents of this publication may not be reproduced either in part or in full without the consent of the publisher. THE NEGOTIATOR Features May The Extreme Operating Procedure Makeover is Complete Part III Jim MacLean 9 Navigating the Oil and Gas Landscape Tracey Moore-Lewis & Tony Cioni 13 The Duty to Consult (DTC) and First Nation Economic Accommodation Steven Francis CAPL Board of Directors President Larry Buzan, P.Land Vice-President Paul Mandry, PSL Director, Business Development Alberta & British Columbia Ted Lefebvre, P.Land Director, Business Development Saskatchewan & Alberta Oilsands Michelle Creguer Director, Communications Marah Graham Director, Education Bill Schlegel, P.Land Director, Field Acquisition & Management Rob Pettifer, P.Land, PSL Director, Finance Noel Millions, PSL Director, Member Services Ryan Stackhouse, P.Land Director, Professionalism Rob Pitchford, PSL Director, Public Relations Gary Richardson, PSL Director, Technology Shaun Williams Secretary/Director, Social Jordan Murray Past President Nikki Sitch, P.Land, PSL Readers may obtain any Director s contact information from the CAPL office. Suite 1600, Avenue S.W. Calgary, Alberta T2P 3R7 [ph] [fax] In Every Issue 18 The Negotiator s Message From the Board: FAM 19 Board Briefs 21 Get Smart 24 Roster Updates 27 The Social Calendar 28 CAPL Calendar of Events 28 May Meeting 28 June Meeting Also in this issue 17 CSPG & CSEG Annual Roadrace and Fun Run 26 CAPL, CAPLA, IRWA Triple Round-Up Kaitlin Polowski Denise Grieve Karin Steers reception@landman.ca dgrieve@landman.ca ksteers@landman.ca

4 The Extreme Operating Procedure Makeover is Complete Part III 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 were finalized after three industry drafts and various additional iterations with the commenting parties to optimize the handling of their comments, to obtain their insights on other changes and to confirm alignment. This is the third of a series of articles to outline the more significant changes in the updated documents, and is the last of three WRITTEN BY JIM MACLEAN

5 articles on the 2015 updates to the 2007 CAPL Operating process is such that an Operator would be unlikely to have inves- Procedure. The March article addressed the case for change tigated fully the location and the integrity of the wellbore before and the updates associated with Horizontal Wells and uncon- it issued an Abandonment notice. ventional projects. The April article provided an overview of The traditional industry practice was a layered approach, in the changes in the document due to some intervening legal which the Operator would forward an AFE in due course after the developments. This article addresses the remaining substantive determination that the well was being Abandoned for the Joint changes in the Operating Procedure. Account. The gaps in that process were that the AFE might not The CAPL website includes various materials relating to the fully reflect the specific circumstances and that a party could 2015 CAPL Operating Procedure that are designed to facilitate potentially choose not to approve the related AFE for a well it had a transition to the new document by both users comfortable agreed to Abandon. Additional AFEs would also be required in with the 2007 CAPL Operating Procedure and those who have due course for subsequent reclamation and remediation activity, been reluctant to shift from the 1990 CAPL Operating Procedure where the Operator would often need to change the program to the 2007 document. These materials include: (i) an overview it originally contemplated because of information it discovered of the project scope and the major changes in a user friendly while conducting its work on the site. format; (ii) a detailed table that outlines in summary form all Given the fact that well specific information will only be material changes relative to the 2007 CAPL and the rationale known after the Operator s investigation of the site and the for those changes; (iii) a clean copy of the text and annotations; integrity of the wellbore, the 2015 document was modified (iv) a redlined copy of the text and annotations relative to so that any resultant AFE is for informational purposes only. the 2007 CAPL; (v) a Word version of a sample election sheet; There was a consequential change to Paragraph 3.01B(b). (vi) a detailed table that outlines in summary form all material This handling is also consistent with the authority granted to changes in the 2007 and 2015 Operating Procedures relative the Operator to make expenditures that are required under the to the 1990 CAPL and the rationale for those changes; (vii) a Regulations. redlined copy of the text and annotations relative to the July, 2015 Notwithstanding the authority granted by these provisions, draft; (viii) a matrix showing industry comments on the July draft Operators conducting AR&R programs should advise the other and our responses; and (ix) copies of letters of support for the parties of any material developments about the program in a project from CAPLA, CAPPA, EPAC, PASC and the PJVA. timely manner once they are discovered (i.e., a very complex, The Best of the Rest expensive reclamation relative to what had originally been expected). This expectation is reinforced by the last sentence of The most significant changes in the 2015 CAPL Operating Subclause 3.01B. Procedure relate to the changes required to address the needs of Horizontal Wells and unconventional projects and, to a Subclause 10.02F (3.2km Election Deferral): We made several lesser degree, intervening legal developments, as addressed in substantive enhancements to Subclause 10.02F. the earlier articles of this series. The remaining changes in the The 3.2km measurement for Horizontal Wells was clarified document relative to the 2007 document are basically of four to align to the measurement process used for the determina- types-changes of greater significance; changes to the anno- tion of a Development Well (i.e., the distance as measured from tations that offer useful insights on emerging issues; specific anywhere in the Horizontal Leg). material changes that are largely self-evident; and miscella- The last sentence was modified to align the handling of an neous fine-tuning and editing changes that are beyond the Operation Notice for a Production Facility more closely to the scope of this article. handling for an Equipping. The change allows the receiving parties to see the Completion results from at least one of the wells The residual changes of greatest significance are the following: being served by that Production Facility before being required to respond to the Operation Notice for the Production Facility. Informational AFEs For Abandonment Activities: The handling of financial approvals following an election by all parties to Tightening Up Subclauses 10.06C and F: Clause addresses Abandon a well under Article has historically been a the ability of a party to import a well initially used for rights chicken and egg scenario. The Abandonment notification process would typically be initiated by the Operator. However, that is not necessarily the case, and a Non-Operator would not be well positioned to issue an AFE for the Abandonment with its notification. Similarly, the uncertainty resulting from the election outside the Joint Lands for new operations relating exclusively to the Joint Lands. It was undoubtedly the most complex change introduced in the 2007 document. It was approximately 2.5 pages of new content with a lot of moving parts given the wide spectrum of scenarios the Clause needed to address. 3

6 We also modified the annotations on Clause to recognize a general reluctance to use arbitration and to be much clearer about the rationale for the potential use of arbitration respecting a number of dispute types. Notwithstanding any assumption of readers to the contrary, the inclusion of the arbitration references in the document is not intended to encourage the use of arbitration. At its foundation, the Clause is relatively simple. A party under the 2007 CAPL and the associated duty on the parties to attempt to negotiate a modified provision that gives effect to the intention of the provision that is in conflict with the Regulations. The annotations also note the potential application of the Further Assurances Clause if a party is attempting to frustrate the exercise of this right with respect to the 2015 document. has the right to import a well used for other purposes into the Agreement governing the Joint Lands if: (i) the well will be used exclusively for operations in the Joint Lands; (ii) the importing party has authority to use the well in this manner under its prior arrangements; and (iii) the well is reasonably suitable for the contemplated purpose. If those conditions are satisfied, the importing party will be reimbursed for a prescribed portion costs for the interval using the imported well directly in cash or indirectly through the applicable cost recovery. One of the concerns when we were finalizing the 2007 document was the broad authority this offered an importing party for older wells. This concern reflected the degree to which the risk associated with an imported well is likely to increase over time, particularly if it has already been used in producing operations outside the Joint Lands. We had tried to mitigate industry s concerns at the time by including content about inspections of the well site and the well file and the representations made by the importing party about the well. A suggestion received several years after the completion of the 2007 document was to include a restriction that the consent of the other parties would be required to import a well if the proposed importation was more than 48 months after the initial drilling rig release date of the well. This is a change that we would have made when preparing the 2007 document if the comment had been made at the time. As a consequence, we modified Subclauses 10.06C and F to provide the other parties with greater control over the importation of a well into the Agreement. Subclause 10.10G: This new Subclause states expressly that an assignment of Preserved Lands in a well to preserve title scenario does not affect the parties obligations for any other well held under the Operating Procedure that is located on the area of the Preserved Lands. The parties obligations for any such well remain governed by the other provisions of the Agreement. The forfeiting parties retain their existing associated share of environmental liabilities and Abandonment obligations as a consequence, unless otherwise agreed by the parties at the time. This provides greater clarity about an issue that was inherent (but not addressed expressly) in prior versions of the document. Subclause 10.13B: Paragraph B(d) of the 2007 document included the obligation to offer the parties receiving an Operation Notice for a Production Facility the right to pay a fee. This Paragraph was changed to become an optional Paragraph in the 2015 document. The 2007 construction was suboptimal in the context of the development of well pads and shale projects more generally. The 2007 handling could provide an incentive for parties to transfer capital exposure for the required Production Facilities to the other project participants. Dispute Resolution: The introduction of Article and the annotations were modified to be clearer that the selection of the Article would see the application of the National Arbitration Rules to supplement any arbitration proceeding. Not using the optional Article, on the other hand, would still see arbitration used as the dispute resolution vehicle for certain listed items, but only under the Alberta Arbitration Act. The parties would then need to consider if and how to supplement the basic arbitration process prescribed by that Act. We expanded the list of items of items for which arbitration would apply by modifying the list to Paragraphs 21.03(c)-(j). Subclause 10.08F: The Subclause was modified to address the circumstance in which the Regulations require a partial use of the equipment included in an Operation Notice for an Equipping (i.e., a separator and measurement equipment) before there is any ability to take in kind. The modification allows a party that wishes to make the take in kind election in Paragraph (b) the right to participate in the installation of the equipment required under the Regulations and then to install the applicable splitter and take in kind. The expanded annotation notes the potential application of the severance provisions in Subclause 1.04B to this situation 4

7 The additional references pertain to the determination of Facility Fees being charged for Facility Usage under Subparagraph (b)(ii) or (iii) of the definition of Facility Fees and the Operator s determination under Subclause 5.03C that a particular party is required to secure payment of its share of certain costs being incurred for the Joint Account. It was an oversight not to include a dispute about those Facility Fees in the list included in the 2007 document when the definition expressly contemplated that those Facility Fees would be referred to Article for resolution if there was a dispute. The reference to Subclause 5.03C was added to the list of items for which the Arbitration Act would apply if the Article was not selected because there was nowhere to go from Paragraph 5.03C(b) under the 2007 document on a time sensitive determination if Article was not selected. We also modified the annotations on Clause to recognize a general reluctance to use arbitration and to be much clearer about the rationale for the potential use of arbitration respecting a number of dispute types. Notwithstanding any assumption of readers to the contrary, the inclusion of the arbitration references in the document is not intended to encourage the use of arbitration. Those references, in fact, are designed, firstly, to encourage the party in the power position to listen more carefully to the concerns of another party than would otherwise be the case if litigation were the only remedy and, secondly, to encourage all parties to resolve the issue through negotiation without actually resorting to arbitration and the possibility of an unfavourable outcome outside its control. The updated annotation also offers the context that the CAPL Operating Procedure has dictated the use of arbitration for the resolution of strategically critical disputes on ROFR values (since the 1971 document), title preserving well issues (since the 1990 document) and many production facility issues (since the 1990 document). We are not aware of any apparent issues or any apparent proliferation of arbitration proceedings in industry under any of the CAPL documents. We also deleted the request for further negotiations layer that had been included in Subclause 21.01B of the 2007 document. We concluded that this aspect of the layered dispute resolution mechanism was not appropriate for the typical Agreement in Western Canada. Electronic Delivery Of AFEs And Operation Notices: Technology exists that enables subscribing parties to issue, respond to and track AFEs and Operation Notices through a fee for use electronic delivery system-something very different than a normal . The new Subclause 22.01B facilitates, as among only 5

8 parties using that service, the ability to use that service for the management of AFEs and Operation Notices being issued under the Operating Procedure. In essence, this recognizes that they are basically waiving, as among themselves only, the application of certain procedural aspects of the Operating Procedure. There is nothing in this Subclause, though, that requires a party that does not subscribe to any such service to subscribe to it just because some other parties are subscribers. Subscribers also retain the flexibility to continue to use the Agreement service processes for individual notices if they choose (e.g., 48 hour Operation Notices, layered Operation Notices to which the 3.2km election deferral mechanism in Subclause 10.02F will apply). These changes are designed to address the needs of parties that subscribe to any such service relative to other like-minded parties. They also recognize the possibility that this type of service could become a widely accepted delivery method for AFEs and Operation Notices over time, just as this type of service has revolutionized the manner in which JV invoices are now handled. Miscellaneous Clause 24.01: Changes were made in the introductory paragraph and in Paragraph 24.01B(a) to clarify that treating the execution of an Earning Agreement as the disposition event relates specifically to the timing windows in Paragraphs 24.01B(h) and (i) and the assessment of the potential application of the Clause exceptions and to provide flexibility to a disposing party in a multi-block earning agreement that would not fall within the scope of the Paragraph 24.02(e) 35% net hectares exception. WE... HANDLE CROWN LAND SALES ACROSS WESTERN CANADA OFFER DISCOUNTED OR FREE* LAND SALES IN SASKATCHEWAN AND ALBERTA Call our CROWN HOTLINE for more details *Some conditions apply. Annotations Are Your Friend The detailed facing page annotations included in the more modern CAPL documents offer useful insights for users of all experience levels about such matters as insights on a particular provision, modifications that might be considered for particular circumstances, the evolution of a Clause over time, case law applicable to the provision and insights about emerging issues. Some examples of the expanded annotations in the 2015 document with respect to the latter follow. Term Of Operating Procedure (Clause 1.14): An area of increasing concern to parties and operators more specifically is the allocation of responsibility for environmental liabilities respecting older wells. There has been an emphasis on increasing the awareness about these issues in the land community in recent years (i.e., CAPL Negotiator articles in April and May, 2014, a joint CAPL-CAPLA round table in September, 2014 and the CAPLA Abandoned Well 6 Obligations Committee and the pending rollout of their report on potential process approaches to mitigate the issue). The annotations on this Clause were materially expanded to help increase industry s awareness of the issue and the degree to which our traditional record keeping practices contribute to the problem. Pursuing Perfection synergyland.ca

9 The preferred path for any party that wishes to shut in a producing well is to negotiate that outcome with the other Working Interest owners to try to obtain the highest possible level of consensus to shut in the well. Many users terminate the agreement file and remove it from not expressly provide an Operator with a unilateral right to shut their land system once the Joint Lands expire. This practice, in wells or facilities whenever it suits the Operator to do so. however, is inconsistent with the Term Clauses of all versions The Operator has an overriding duty (i.e., Clause 5.01) to of the CAPL Operating Procedure. Each version of the document manage the joint property for the collective benefit of the is clear that the Operating Procedure continues to remain in Working Interest owners. One might attempt to argue that there effect through at least the Abandonment of any outstanding is an inherent duty on an Operator to attempt to produce a well wells, the receipt of the applicable reclamation certificates and that is clearly capable of production in paying quantities when it any associated final settlement of accounts among the parties. is able to do so (i.e., no facilities or pipeline constraints compli- There cannot be any final settlement of accounts until at least cating the ability to produce). completion of the reclamation process and payment of the An Operator that chooses to shut in a well capable of produc- associated costs and expenses. One might also attempt to argue tion in paying quantities arbitrarily could potentially be open that there cannot actually be any final settlement of accounts in to a claim from the adversely impacted parties (e.g., those with any event until expiry of the audit period pertaining to the most attractive hedges, take or pay transportation commitments, bank recent financial transactions under that agreement. covenants, a unique vulnerability because of a small number of The Operator s issuance of JV invoices for associated surface wells, risk if the well cannot later be reactivated, etc.). It poten- rentals or reclamation costs often results in delays in payment tially introduces a risk of replacement as Operator under the and billing disputes, since recipients do not readily understand default or no cause replacement mechanisms in Subclause 2.02B the legitimacy of the charges. This is a complex area, for which or the Clause 2.03 challenge process. The Operator also needs to many of the potential solutions would be worse than the prob- be cognizant of the potential resultant negative impact on the lem. The issue can be mitigated significantly through: (a) records relationship with the other impacted parties with respect to this retention processes in which files remain in the land system property and in the broader sense. with an active status for the period between expiry of P&NG An Operator considering this issue must also remember that rights and completion of the reclamation process; and (b) greater the expenditure limitation provisions in Clause 3.01 potentially awareness about the implications of the issue when preparing limit the Operator s ability to charge to the Joint Account any a notice of assignment for any agreement for which there are costs to suspend the well and any associated reactivation costs. surface rights in the reclamation process. The problem when considering this issue, of course, is the The post-1990 documents are much clearer about environ- circumstance in which the affected parties have very different mental liabilities associated with Joint Operations that only economic outcomes, often because of different infrastructure become apparent after the final settlement of accounts. Subject to positions. any special allocation of responsibility under Article 4.00, the The preferred path for any party that wishes to shut in a remedial costs will be for the Joint Account. That being said, producing well is to negotiate that outcome with the other there will be some enforcement issues in practice if a previous Working Interest owners to try to obtain the highest possible party no longer exists at the time the expenditure is required. level of consensus to shut in the well. While unanimity on this issue is undoubtedly preferred, it will not always be possible. Shutting In A Well (Clause 3.04): We were requested to include There may be circumstances in which the Operator may need to a prescriptive outcome in the 2015 document to provide clarity assess the legal risks relative to the benefits that it could obtain on the circumstances in which an Operator could shut in a well by proceeding to shut in the well if, for example, there is a high in the context of low commodity prices. We chose not to modify level of Working Interest support to shut in the well without the document to address this because we did not believe that the there being unanimity. complexity inherent in the question lends itself to a single one size fits all answer. That being said, we concluded that we should address the topic in the annotations. Whatever ambiguity may exist with respect to this issue, there is one thing that is clear-the words of the Operating Procedure do LLR Deposits (Clause 3.09): An issue that is currently emerging is whether an Operator can require the Joint Account to assume responsibility for any LLR deposit it is required to submit under the Regulations with respect to a joint well. 7

10 While mentioned in a sentence in the annotations on the Subclause 10.07E: A sentence was added at the end of the 2007 provision, this annotation was significantly expanded in the Subclause addressing the subsequent participation rights of a 2015 document. Non-Participating Party that elected not to acquire its Working Clause 3.09 and the financial authority in Paragraph 3.01B(b) Interest after a cost recovery. It may participate in any subse- do not allow an Operator to charge the Joint Account any fees or quent plugging back or deepening operations that may be deposits required by the Regulations as a condition of that particular conducted on the well in due course. Operator holding a licence or approval (e.g., LLR deposits in Alberta). This change was made to be consistent with the subsequent This ultimately reflects the fact that the requirement to participation rights offered under Clause to a party that had submit a LLR deposit is linked at this time to the Operator s forfeited its interest in production from a well in response to an own particular financial circumstances. Any suggestion that any Abandonment proposal under Article This reflects the handling required LLR deposit be linked to the participating interests in in the document that the election pertains to the well, rather than to the well would see very different outcomes when a large, finan- its Working Interest in the applicable Joint Lands and its ability to cially viable company without any LLR issue were the Operator exploit those rights because of a change in use of the well. relative to a small company Operator with a lesser asset base. The outcomes to Non-Operators should logically be consistent. Clause 18.07: This Clause was added to accommodate a potential That being said, there may be circumstances in which the CAPL initiative to create a separate agreement for the handling of similarities in financial status of the members of a particular geophysical data. The conduct of a geophysical program is an opera- project group are such that they may agree in their particular tion to which the Operating Procedure can inherently apply. However, Agreement to override this restriction and share responsibility the Operating Procedure does not suitably address the issues asso- for any such fees or deposits in proportion to their respective ciated with the ongoing management of that data, protocols for participating interests in the applicable well. The onus is on the licensing/release and transfers of ownership. As a consequence, the parties to modify the document if it does not present an appro- owners of geophysical data might enter into a separate agreement priate outcome for them. addressing those types of issues that would supersede the Operating Short Snappers A brief presentation of some of the other more material changes Procedure with respect to the subject matter of that agreement. Coming Soon to a JOA Near You in the 2015 document follows. We received very positive feedback about the 2015 CAPL Operating Procedure at the initial rollout session attended by 34 active E&P Clause 2.08: Based on PASC feedback, the Clause and annotations companies and at the subsequent half day mini-courses on the were modified to clarify the interrelationship between the audit 2015 CAPL Operating Procedure and the 2015 CAPL Farmout & contemplated in this Clause and the normal audit contemplated Royalty Procedure. in the Accounting Procedure. The two are independent audit The most important factor driving a shift to the 2015 CAPL processes, such that this audit right does not adversely impact Operating Procedure is the fundamental change in our busi- the normal audit rights under the Accounting Procedure. ness since even 2007 the shale revolution and the increasing number of technically complex, long-reach horizontal wells Paragraph 7.01(a): This Paragraph was modified to provide the drilled from well pads. Operator with the ability to use a 75 day response period for Other factors reinforcing a timely transition to use of the AFEs respecting repair and maintenance. This change recognizes 2015 document by industry are: (i) the ease of the transition the operational reality that repair and maintenance AFEs are for the increasing number of companies comfortable with the frequently processed outside the 30 day window contemplated 2007 document (i.e., only 3.5 pages of incremental length); (ii) in the 2007 provision. the interrelationship with the update to the Farmout & Royalty Procedure; and (iii) the 68 page matrix that outlines in summary Subclause 10.02G: This optional Subclause was introduced in the form the enhancements in the 2015 document relative to the 2007 document to allow parties to avoid the application of the 1990 document and the associated rationale. Subclause 10.02F 3.2km election deferral mechanism to shallow Taken together, there is a compelling case for change that will 8 pattern drilling programs. The 2015 document was modified to replace the subsurface metres depth reference with a formational reference (i.e., above the base of the formation). This allows for a more transparent handling for those circumstances in which the optional Subclause is selected to apply. see the 2015 CAPL Operating Procedure embraced by industry much more quickly than had been the case for either the 1990 or 2007 documents. Next month will be the first article in a series on the 2015 CAPL Farmout & Royalty Procedure. m

11 Navigating the Oil and Gas Landscape From drill bit to sales who s who in the zoo? WRITTEN BY TRACEY MOORE-LEWIS PJVA DIRECTOR TONY CIONI AIPN CANADA CHAPTER DIRECTOR CAPL IT ALL STARTS HERE, WITH CAPL, FIRST SECURING THE MINERALS RIGHTS AND THEN THE SURFACE RIGHTS IN ORDER TO GAIN ACCESS TO THE PRIZE. The Canadian Association of Petroleum Landmen ( CAPL ) is a non-profit voluntary professional association for landmen in Canada, which evolved from the Alberta Landman s Association founded by eight members in CAPL s mandate has been to provide and promote activities to enhance the value of its membership and promote the role of the landman profession in Canada. There are many forms of landmen, including mineral landman (subsurface, exploration and development, A&D), surface landmen (planning 9

12 of drilling, well-related pipeline and facility work), and contracts landmen (skilled draftsmen and land administrators). Through post-secondary education, attendance at courses developed or endorsed by CAPL (including courses on ethics and fiduciary duties) and other studies, CAPL members may qualify to write an exam to obtain their professional designation as a Professional Landman (also known as P.Land ). CAPL is also closely associated with the Canadian Association of Petroleum Land Administration (CAPLA) and the International Right of Way Association (IRWA). Where CAPL manages the minerals, CAPLA manages the contracts associated to the lands and the IRWA manages the surface contracts associated with the lands. Land contract administrators are an integral part of the land management function and are knowledgeable in the areas of industry procedures and regulations for the maintenance of land records. IRWA professions bridge the gap between all professionals from various disciplines who are involved in surface land acquisition. PJVA When landmen have secured surface and mineral rights and negotiated for initial well positions and drilling wells, the Joint Venture team can step in and start the process of developing and managing the field and joint infrastructure to gather production, compress, process and separate product from the wells. The Joint Venture (JV) team is also chiefly responsible for maintaining the day to day relationship between different investors and operators. The JV value chain starts with the wellhead and ends with what a plant or facility can deliver for spec product (oil, gas, LPGs ethane, sulphur, etc.) The JV process looks something like this: Oil Value Chain Gas Value Chain The Petroleum Joint Venture Association is a not-for-profit voluntary association that represents and supports individuals and organizations involved in petroleum joint ventures, primarily in Western Canada. In 1985, PJVA was established to develop industry professionals, and develop and maintain model joint venture agreements. PJVA s training is a culmination of conferences, seminars, and its own continuing education programs (currently at Mount Royal University), condensed online course offerings, monthly speaker luncheons and early morning meetings. PJVA educates its membership to become Joint Venture Representatives (steward business for the asset team and partners, negotiator, area reviews, and A&D), Joint Venture Analyst (negotiator of agreement, area reviews, fee review), and Joint Venture Administrators (Mail Ballots, AFEs, and the manager of all things important!). PJVA s membership includes joint venture representatives, joint venture analysts and administrators, engineers, landmen, geologists, accountants, lawyers, and auditors. The Joint Venture business is designed to maximize and enhance the value of jointly owned assets. Business ventures include: Unitization, Construction, Ownership and Operatorship of Oil Batteries, Gas Plants, Compressors, Gathering Systems, Multi-well Pads, and related third party negotiations and management. The assets are primarily anything downstream of the wellhead through to the point of sale (exit at plant gate). The Joint Venture realm deals primarily with everything from building and sharing infrastructure, to management of the joint account including operating and capital expenses and revenue. 10 AIPN The Association of International Petroleum Negotiators is an independent not-for-profit professional membership association that supports international energy negotiators around the world and enhances their effectiveness and professionalism in the

13 international energy community. The AIPN was founded in 1981 to enhance the professionalism of cross-border energy negotiators. It began in Texas as a loose affiliate of professionals who worked on petroleum ventures around the world. With so many emerging markets at the time, and a total lack of regulation and commercial standardization, it was helpful for those professionals to exchange their experience and information. Years later, the AIPN is now composed of more than 4,500 members in more than 110 countries, representing numerous international oil and gas companies, host governments, law firms and academic institutions. AIPN members come from a variety of disciplines: commercial, technical, academic and legal. The AIPN s model form contracts are now the bedrock for doing business abroad in places like Africa, Asia and the Middle East, affecting the standards of national oil companies and state owned enterprises. As those companies and enterprises grew in importance and value, they eventually decided to branch out in the world to markets like Canada. In arriving on our shores, those actors brought the AIPN models with them. Increasingly, large scale capital projects (particularly unconventional projects) are governed with the commercial concepts contained in the AIPN models. This is especially true in relation to: operation management (operator independence vs. operating committee oversight); fiscal controls (binding work programs and budgets; financing (advance cash calls vs. reimbursements) and role risk/exclusive operations. Save the Date! September 18-21, 2016 Marketing After the product leaves the responsibility of the Joint Venture, being the exit of the plant gate, Marketing takes possession and enters into further arrangements to ship and sell the product into the oil and gas market worldwide. Marketing is the start to the finish line, the cash register, so to speak. Marketing brings closure to our bottom line by establishing the revenue generated and the resulting netback. Compare and Contrast Although CAPL, PJVA and AIPN are similar in many ways, each has unique ways to do business. For example, when it comes to our agreements and our business processes we differ in many ways. Here s one example: 11

14 PJVA CAPL AIPN (Model Conventional JOA) Mail Ballot Independent Operations Notice (ION) Proposal to Operating Committee 1) Motion presented on Mail Ballot page for projects that may or may not involve expenditures. 1) Operation proposed by ION; related to the production of a well. 1) Operator proposes operations to Operating Committee. If those operations are already contemplated under an approved work program and budget, there is likely a restricted basis to vote no because the parties have already approved of that project in the work program and budget itself (e.g. the JOA model prevents partners for getting two opportunities to vote on the same item). 2) Time frame for Operating Committee Meeting, normally 10 days. Time frame for voting generally days. 2) Time frame for election generally 30 days. 2) Time frame for Operating Committee meeting 15 days (can be waived with unanimous consent or done by mail ballot). 3) Majority vote carries the resolution/motion, provided it adheres to the Agreement. All Parties are carried by an approved vote. 3) Parties elect whether or not to participate in a project (not automatically carried). 3) Parties vote whether or not to participate in those operations. 4) A Mail Ballot can be defeated, which means the project does not progress in the format or under the terms proposed. 4) The project progresses regardless of whether or not all parties elect to participate. 4) Where all parties approve the motion, the operations will be for the joint account. Where less than all parties approve the motion then, depending on the model JOA options selected: (a) the approving parties may proceed with the operations as an exclusive operation after a notice to that effect is circulated, provided the JOA permits those operations to be done by exclusive operation; (b) if the dissenting parties do not have a sufficient vote to block the motion, they may be dragged along by participation in the operations as a joint concern. 5) Non response is deemed affirmative (in most Agreements). 5) Non response is deemed to be in penalty. 5) Silence is typically deemed a vote against the motion. 6) The Mail Ballot becomes the legally binding document; the AFE is merely an attachment for information purposes only and is not signed. Partners agree to the terms proposed in the Mail Ballot. 6) Both the ION and the AFE are executed; both are binding documents. 6) In cases of a positive vote and a drag along the decision is binding as a joint operation. In cases of an exclusive operation approval, the decision is binding on the exclusive operation participants. 7) Proposed project cannot be initiated until after due date when votes are tallied and the Mail Ballot is confirmed approved. 7) Proposing Party may begin operation without waiting for response period to lapse provided they are prepared to take on full cost of project should all other Owners elect to go penalty. 7) Those operations may proceed as per the proposal. 8) No time limit within which operation is to be conducted. 9) You may have cases where, for new builds such as adding a new Functional Unit, your partners can participate or not participate (invest capital). If they do not, they would not own in the new Functional Unit, but would remain an owner in the other Functional Units. 8) Operation to be conducted within 90 days of ION being issued. 9) Non Participating Party remains participant in well but is placed under Penalty at % of the original operation investment they declined to participate in. 8) No time limit for the completion of operations on a joint matter, except the Operator must comply with the requirements of the approved work program and budget. On an exclusive operation, the work must be started within a set time period (often 90 days). 9) Non-participants in an exclusive operation may back-in later by the payment of: (a) their working interest share of the costs of that operation; plus (b) a cash penalty payment in the range of % of that cost. Many deals do not permit back-ins on developments, as the cost plus value model may not represent the real value of the resource discovered during the exclusive operation. 12 In conclusion, you can see that the zoo is full of a variety of animals, all coexisting! Each Association or function of the Association has distinct job functions, but we complement each other for the common goal to make money for our company and our partners as efficiently as possible. m

15 Cree Indian, G. E. Fleming, 1903 The Duty to Consult (DTC) and First Nation Economic Accommodation DEVELOPERS OR PROPONENTS WANT- ING TO DEVELOP CANADA S NATURAL RESOURCE BOUNTY must be prepared to The duty to consult (DTC) has been a transformative Crown obligation owed to First Nations since 2004 and Regardless, many public corpo- address First Nation economic accommodation in rations have also had to deal with the Crown s DTC a meaningful way or risk delay to their potential First Nations as a delegated obligation in return schedule. The opportunity to do so arises during for a positive approval or authorization. The DTC WRITTEN BY STEVEN FRANCIS B.A., LL.B the delegated consultation process that any developer or proponent is expected to comply with in return for the permission to develop subsurface minerals or other naturally occurring surface resources that have an economic value. obligation can also sometimes include a related duty to accommodate in particular circumstances. The Supreme Court of Canada (SCC) has acknowledged in Delgamuukw (1997), and Tsilhqot in Nation (2014), that with either title or rights that there is an 13

16 inescapable economic component that ought to be addressed on a case-by-case basis. This fundamental aspect or quality of Aboriginal title and rights is equally applicable for existing treaty rights that are also protected by section 35 of the Constitution Act, The DTC also invariably deals with the accommodation of Aboriginal and treaty rights. This is because section 35(1) rights are sacrosanct and the foundation for a First Nation s economic development. Aboriginal and treaty rights are also the best leverage available to a First Nation to ensure it benefits from local natural resource development. Depending upon a First Nation s view toward natural resource development, it may be amenable to economic accommodation and may even champion responsible development. Adopting a proactive approach to First Nation economic accommodation is advisable when rights are potentially infringed by development activities. Economic benefits as accommodation provided by a developer or proponent to a First Nation for infringing their rights ensures a degree of certainty for the proponent and is a source of funds for the First Nation that is often inadequately funded by government for meaningful consultation to occur. Moreover, should a developer or proponent voluntarily support or invest in a First Nation, the relevant provincial or federal government and/or regulators will be relieved of some criticism that they are pro development without addressing First Nation communities rights. Economic accommodation is a potential win-win for both the proponent and the First Nation that will also unintentionally benefit the Crown as they will not have to do anything substantively, such as create a provincial policy of legislation to help both the proponents and First Nations. First Nation economic accommodation in its most common form results from negotiated agreements between the proponent and the First Nation. Often First Nations agree to support or not object to project approvals in return for resources that enable skills training, education support, business development assistance, environmental programming, and lost opportunity for practicing traditional activities such as hunting, fishing, harvesting, and trapping. Economic accommodation can also take the form of community investments, including water or road infrastructure contributions and Elder or community centers. So long as something of value is offered and provided for admitted infringements or adverse affects from proposed development, then it is likely that a regulator will not intervene. Where Aboriginal title or rights are established or alleged to exist and subsequently infringed, it s the Crown s responsibility to fully justify the infringement of title or rights. The legal requirement to justify an infringement of title or rights is distinct from a regulatory process, such as the National Energy Board (NEB), the Alberta Energy Regulator (AER), or the British Columbia It s like virtual reality for your survey 14 3D Laser Scanning produces fast and accurate results, saving you time and money when there isn t a lot of either. Contact us today to see how 3D Laser Scanning can work for your next project! Calgary Edmonton Grande Prairie Swift Current Fort Nelson Fort St. John canam.com

17 Environmental Assessment Office (BC EAO) process. Typically, in a regulatory situation the Proponent and Crown are addressing the First Nation s concerns, interests and questions, but they are not substantively or comprehensively addressing Aboriginal title or existing rights in a legal sense because it is often not the best forum in which to do so. Typically what is happening during the regulatory process is an attempt to satisfy the First Nation s concerns and a gauging of its level of potential future litigation, i.e. judicial reviews or injunction applications, rather than definitively resolving Aboriginal title or rights grievances. After all, one must remember that a regulatory process is not about title or rights settlement; it s simply about dealing with the right to be heard after knowing what is contemplated or planned. Regulations are secondary legislation and they address only those matters set out in their primary legislation, so gaps are likely to exist. For instance, with respect to constitutional Aboriginal title and rights, regulations do not typically deal substantively with them, instead, regulations deal with adverse impacts to First Nations interests and their provincial Crown land usage. As an example, according to the Responsible Energy Development Act (REDA) of Alberta, section 21 states: The Regulator has no jurisdiction with respect to assessing the adequacy of Crown consultation associated with the rights of aboriginal peoples as recognized and affirmed under Part II of the Constitution Act, As rights and title are not definitively addressed or settled in this particular regulatory forum, litigation may arise in the form of a judicial review application once a provincial decision maker has made a decision on a project or proposal by a Proponent. Three potential arguments by First Nations to delay Natural Resource Development are: (1) alleging that insufficient Crown consultation has occurred; (2) arguing that inadequate economic accommodation by the Proponent and Crown has been provided; and (3) insisting that the on-going cumulative effects of resource development is infringing Aboriginal and treaty rights protected by section 35 of the Constitution. First Nations and their lawyers will strategically decide whether they pursue litigation against the provincial or federal Crown (also naming the proponent as a Party) or whether they pursue a political solution. Should a First Nation pursue litigation via a judicial review or injunction application, proponents and the relevant Government actors should expect 3 to 24 months for the legal proceedings to run their course. On the other hand, should a First Nation turn to political action, such as blockades or protest marches, and align themselves with environmental non-governmental organizations (ENGOs) then negative momentum can be STABILITY. EXPERIENCE. VALUE! You get what you pay for. In challenging times like these where every dollar counts, it s tempting to be swayed by gimmicks and fast talking salespeople offering deeply discounted rates or even free services. 25 YEARS For over 25 years, we ve been providing professional land services from the industry s most experienced experts at reasonable and competitive rates. And we ll continue to do so. Call us at for some peace of mind on your next project. scottland.ca 15

18 built that attracts the attention of Government and encourages them to act or not. Should a Crown representative not act honorably in addressing his or her obligation, the duty to consult and accommodate, the opportunity will be wasted. The Honor of the Crown (HOC) is a constitutional principle that enables First Nations to insist on protection of their rights and lands prior to surface land disturbances. Both the federal or a provincial Crown Ministry or official are imbued with a responsibility to assess the impact of development on a First Nation s rights or land base. The HOC requires that all Crown officials or representatives act honorably in addressing their duty to consult and accommodate obligations where First Nation rights may be adversely impacted. In complying with this principle, the Crown relies on developers or proponents to identify and to address accommodation resolutions that they are able to. However, as long as a Proponent does its own due diligence by negotiating economic accommodation measures with individual First Nations, the Governments, both federal and provincial, are absolved from trying to address the vacuum that is the HOC that could be part of a solution to the dilemma between natural resource development and First Nation economic resurgence or independence. Implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) in Canada is also no panacea for the dissatisfaction amongst First Nations when it comes to natural resource development and environmental issues. If it were to be adopted in whole or in part by the federal or provincial Government, then Treaties and legislation, would have to be examined and possibly updated to satisfy new standards, a task too onerous in the short term. The Crowns, federal, provincial and territorial, clearly have a responsibility to ensure that Canada s natural resources are developed, so that all Canadians benefit from them, but action is clearly needed. The federal Government s announcement on January 27, 2016, relating to two major projects and an enhanced regulatory review process, is a good first step toward ensuring greater social acceptance of two major pipeline projects currently in the National Energy Board review process. More effort by Government will still be required as this announcement does not solve all regional problems that stakeholders and First Nations have regarding the pace or location of natural resource development. Notwithstanding what Governments may or may not do, I suggest that it is incumbent upon proponents to address First Nation economic accommodation themselves with the relevant First Nations as nothing substantive or innovative is likely to emerge from the election promises of either the federal or Alberta provincial Governments in the current economic environment. m British Columbia St. Fort St. John BC V1J 3Y6 T: F: Alberta Box Ave. Fairview, AB T0H 1L0 T: F: Toll Free: Negotiator Feb 2016.indd 1 Visit us online at 2/12/2016 2:00:54 PM

19 CSPG & CSEG Annual Roadrace and Fun Run Wednesday, September 21, 2016 ON YOUR MARK! GET READY, THE CSPG & CSEG WILL BE RUNNING OUR ANNUAL ROADRACE AND FUN RUN this September. Start time 6:00 p.m. just north of the Eau Claire YMCA. The route will take you on an out-and-back course along the beautiful Bow River pathway, finishing at the Eau Claire YMCA. Following the race, all racers, volunteers, and guests are invited to gather at the Calgary Curling Club, just north of Prince s Island for awards, draw prizes, refreshments and some friendly camaraderie. So if you are looking for a competitive race or just want to have fun, come join us! The race is open to all members of the CSPG, CSEG, CAPL and to the general public; however, space is limited to 200 participants. Register early to avoid disappointment! There will be NO race day registration. For sponsorship opportunities please contact: JocelynFrankow@gmail.com or Justin.Kangarloo@cenovus.com and Sean.McLeod@cnrl.com. m Mineral and Surface Leasing Right-of-Way Acquisitions Mineral Ownership/Title Curative Seismic Permitting Mapping/GIS Services Abstracts of Title A FULL SERVICE LAND COMPANY SERVING NORTH AMERICA Elexco Ltd. Canada: Elexco Land Services, Inc. New York: Michigan: Pennsylvania:

20 18 The Negotiator s Message From the Board Field Acquisition and Management WINSTON CHURCHILL ONCE SAID, IF YOU ARE GOING THROUGH HELL, KEEP GOING. The nub behind this witty statement is that there is no point in stopping and remaining in a bad place. Churchill s statement is intended to encourage us to persevere in times of difficulty, and to work at getting through to a better place. I doubt that a day goes by without most of us checking market and stock prices. We listen to the news in the hope of hearing an encouraging word. As we are all aware, there is little that any one individual can do to change our current economic environment, as we seem to be at the mercy of forces beyond our control. The best we seem to hear is the encouraging word to each other that things will eventually turn around. It is easy to get discouraged and feel as if it is time to retreat, especially if you, a family member, or friend has experienced the effect of a layoff. In the small space I have in this article, I want to take the time to encourage you to take Churchill s advice, and keep going. Rather than retreating, remain connected. It is the best time to make sure that your list of contacts is current. Take advantage of events such as the CAPL s General Meetings as a way of keeping in touch with others, and as a way to learn of potential opportunities. The CAPL has made its office available to assist members, who are temporarily unemployed for photocopying, and if temporary space is needed, to plug in a laptop, as you go from one appointment to another. We are part of an industry that remains vital to our economy, and will be for many more years to come. The naysayers may persist, but in the final analysis, it is understood that this downturn will not last forever. So, how long before we get out of this slump? Well, there you have me, and that is no surprise to you. No one has a definitive answer to that one. Oh, if we could only get rid of life s uncertainties. But turn around it will, so put yourself in the best position possible for when it does. I have served on the CAPL Board of Director s for nearly two years and I hope to continue to serve this great association in whatever capacity I am able to. I encourage you to keep up with what is happening at the CAPL, speak with Board members regarding matters of concern, changing regulations, stakeholder issues, suggestions for course subject matter, and other issues that affect the association and our profession. The Field Acquisition and Management Committee (FAM), of which I am the current Director, consists of a number of keen, competent professionals who are up to speed on current issues. Our meetings are informative, and have often been helpful in knowledge sharing about various matters of concern. We have received a number of new members in the last two years which has gone a long way in confirming the relevancy of this committee. The committee was involved in communications with government agencies over a number of issues that the FAM felt needed to be addressed. Letters were sent to government agencies regarding a potential review of the Surface Rights Act, and changes to regulations regarding Alberta Commissioners for Oaths. At one of FAM s monthly meetings, we had a representative from The Farmer s Advocate Office give a presentation that was followed with an informative question and answer period. The CAPL office is also working on fillable forms for the CAPL Alberta Surface Lease and Right-of-Way documents. These are just some of the efforts that the FAM has been engaged in this past year. There are a number of committees serving the members of CAPL. I encourage you to get on our website and consider the possibilities for greater involvement. I believe you will find it both professionally and personally rewarding, especially in this time of testing. m Paul Mandry PSL, BSc. Director of Field Acquisition and Management Correction In the April 2016 edition, The Negotiator made reference to Spyglass on the cover in error. The case reviewed in the article did not involve Spyglass. m

21 Board Briefs The key discussion items at the CAPL Board of Directors Meeting held March 1, 2016 at the CAPL Office were as follows: In Attendance Absent Guests N. Sitch L. Buzan K. Gibson Scott Ganes A. Webb J. Murray P. Mandry M. Cookson M. Creguer T. Lefebvre M. Radomski B. Schlegel G. Richardson R. Stackhouse N. Millions Scott Ganes, guest, spoke with the Board about the joint CAPL/ CAPLA wellbore abandonment committee and the work they ve been doing. Scott provided an overview of the wellbore abandonment committee and the sub-committees they have created. Scott will lead the well liability committee on CAPL s end and will be seeking additional CAPL volunteers to help with the process. Membership, one candidate for Interim Membership, and eight candidates for Student Membership in the Canadian Association of Petroleum Landmen. In addition, the Board of Directors approved the request from five members to change their status from Active to Senior and for 34 members to allow their memberships to terminate. Nikki Sitch, on behalf of Paul Mandry, made a motion to approve Sherri Wannamaker as the FAM BC Liaison. The motion was passed. Gary Richardson updated the Board that on March 4, he will be at John Diefenbaker High School for a career fair (with Melissa Sadal). March 9 Gary and Larry Buzan will be at the SAIT Energy Asset Management Student Club Networking event. March 10 Deb Degenstein and Moya Little will attend the career fair at James Fowler High School. That same evening Gary will present to the SPOG Community Affairs group on the Royalty Review literature he previously posted. March 17, the Public Relations Committee will be meeting and March 23, a club root seminar will be presented by the West Central Stakeholders Group in Leslieville, for which the Public Relations Committee and FAM Committee will choose a representative to send. Andrew Webb presented a Treasurer s Report as at February 29, 2016, showing CAPL investments totalling $792, CDN, plus a cash balance of $292, CDN for a total of $1,085, CDN. The CAPL Scholarship Fund has a balance of $241, CDN. There were no transfers made since the last report. Mandy Cookson provided an update that she, with Larry and Nikki met with CAPL s IT consulting firm to discuss CAPL s website framework and capabilities. CAPL will be reviewing our on-line processes and abilities in order to identify operational efficiencies which we may be able to utilize. Ryan Stackhouse updated the Board that the Member Admissions Committee has recently undergone some changes, with Colin Kay stepping down as the chair, but remaining on the committee, while Robyn Baron and Troy Cameron will be taking over as co-chairs. Additionally, Ryan presented the Board with a motion to endorse the recommendation of the Membership Committee to accept six candidates for Active Ryan Stackhouse updated the Board that the Merit Awards will be held May 26, Ryan and his committee asked that each Board member review their own committees to find potential candidates to nominate for CAPL s various Merit Awards. Additionally, Ryan asked each Board member to remind fellow members to put forward any Merit Award nominations for members they feel deserve recognition Street, Edmonton, Alberta T5V 1M5 19

22 Ryan Stackhouse reminded the Board that the Insurance Survey results varied widely. Ryan thus put forward a motion to publish the results of the Insurance Survey on the CAPL website. The motion was passed. Nikki Sitch, on behalf of Kent Gibson, advised the Board that members are encouraged to bring forward any thoughts they may have on ways to improve CAPL s by-laws. Michelle Creguer updated the Board that CAPP representatives met with Alberta Energy and will be meeting again in April to discuss oil sands tenure regulations. Alberta Energy indicated an additional extension to the oil sands tenure regulations is likely, as they probably won t have time to finalize amendments to the regulations before the expiry of the current extension deadlines, however, more information should be forthcoming. Bill Schlegel updated the Board that he and the Education Committee are monitoring course attendance levels closely in conjunction with expenses to ensure courses that are running are breaking even. Additionally, the Education Committee is exploring their options to operate courses more efficiently. Jordan Murray advised the Board that the CAPL Ski Trip was held Friday February 5, 2016 while the CAPL Curling Bonspiel was held February 18, Finally, the CAPL Squash Tournament is scheduled for March 12, Noel Millions made a motion to amend the CAPL Professionalism Procedure with the goal of broadening our Professional Members awareness on land access issues outside their designated areas of expertise. The motion was approved. Michelle Radomski advised the Board that the Elections committee is seeking nominations for new candidates to run for the various available board positions that will be vacated this year. There was no new other business; and Nikki Sitch reminded the Board of the following: The next Board of Directors Meeting will be on April 5, 2016; and The next General Meeting will be the Thursday March 17, 2016 networking event at Craft. m Jordan Murray Secretary/Director, Social In this environment, they say diversification is key. Oh, we re diversifying all right. Call us to find out how

23 Get Smart The CAPL Education Committee is pleased to present the following courses: May 2016 Acquisitions and Divestments: The Paper Chase May 5, :30 a.m. to 4:30 p.m. This course will cover the procedures, processes and tips necessary to properly time, evaluate, create and disseminate the flow of paper, from the beginning to the end of an acquisition, divestment or trade. This will include scheduling, due diligence, closing and post-closing responsibilities. Documentation such as Land Schedules to the 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 containing examples of those items will be provided. British Columbia P&NG Tenure Continuations NEW COURSE (DATE CHANGE) May 10, :30 a.m. to 12:00 p.m. A case study approach to BC Tenure Management, covering considerations from posting strategy through to maximizing the value of capital decisions that impact ability to continue lands with targeted/specific capital expenditures, groupings, and related undertakings that ultimately result in the submission of a Continuation Application(s). This seminar includes an overview of the BC Tenure Continuation regulations along with various strategies and undertakings that can be considered and employed in the life cycle of lands: posting lands, drilling, grouping, submitting continuation applications. are followed. An in depth discussion of boundaries, evidence, field surveys and survey plans will follow, including a look at the Alberta Energy Regulator, ESRD, Enhanced Approval Process and Land Titles with respect to survey processes and plans. Technology in measurement and applications will also be discussed. Saskatchewan P&NG Regulations DATE CHANGE October 26, :30 a.m. to 4:00 p.m. This seminar will provide an overview of the Saskatchewan Petroleum and Natural Gas Regulations. Emphasis will be placed on the land tenure system, lease continuation, posting and bidding on Crown land. A question and answer period will follow the presentation CAPL Farmout and Royalty Procedure May 17 & 18 (workshop), :30 a.m. to 4:30 p.m. The focus of this course will be on a conceptual review of the 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. Pipeline Plain Talk Series, Part 2 (PSL ) NEW BUSINESS LUNCHEON May 17, :30 a.m. to 1:30 p.m. Part 2 of the Pipeline Plain Talk Series is a 1.5 hour seminar which will focus on pipeline company management systems and programs necessary for regulatory compliance and to address stakeholder expectations throughout the entire lifecycle of the company s 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. Facilities Overview (PSL ) May 10, :30 a.m. to 4:30 p.m. Well Spacings and Holdings May 19, :00 a.m. to 4:30 p.m. A one day seminar for surface land agents will give an overview Changes to the spacing regulations and Directive 065 along with of many key aspects of oil and gas field operations, facilities and the increase in horizontal well drilling have led to confusion and practices. Upon completion of the course, land agents will have misunderstanding as to what constitutes an on-target, compliant a basic understanding of the key aspects involved in field opera- well. The objectives of this course are to familiarize participants tions, including exploration, production and abandonment. with the current regulations and learn how to interpret them correctly to ensure the wells they drill will not be subject to Oil and Gas Land Surveying: An Alberta Perspective (PSL ) off-target penalties or enforcement action (due to non-compli- May 11, :30 a.m. 12:00 p.m. Oil and Gas Surveying: An Alberta Perspective will briefly introduce land surveying, the role of the professional Land Surveyor, including areas of practice and legislation, regulation and standards that ance) from the Alberta Energy Regulator (AER). Emphasis will be placed on reviewing existing regulations (including holdings) in both Alberta and British Columbia and the consequences of variation from normal spacing units through practical problems. Information resources will also be discussed. 21

24 Acquisitions and Title Review: A Practical Guide NEW DATE May 25, :30 a.m. to 4:30 p.m. This seminar will focus on the practical aspects of title and due diligence reviews when acquiring assets in Western Canada. Attendees will benefit from the suggestions presented to make the title review process involving outside counsel more cost-effective 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 land personnel to conduct due diligence reviews in circumstances where the involvement of outside counsel may not be merited. Finally, the process of deficiency rectification will be discussed as well as alternatives for dealing with unresolved deficiencies within the context of the business deal and the sale agreement. from an Alberta perspective, much of the material is relevant to other jurisdictions also. Economic Considerations for Land Deals DATE CHANGE May 31 & June 1, :30 a.m. to 4:30 p.m. The instructor will cover the basics of measuring project value from an economic perspective. The advantages and disadvantages of alternative methods of value measurement will be 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 examples and applications of the material covered will be provided. Participants will have several opportunities to derive solutions to problems. Participants are requested to bring a simple arithmetic calculator to the seminar. Surface Land Fundamentals May 25, :30 a.m. to 4:30 p.m. The course is designed to provide an overview of how the surface land department works by examining the surface land process from project kick-off to licensing. Areas discussed include the acquisition process on both private property and crown lands, applicable acts and regulations, compensation calculations, documentation requirements and addendums, survey plans, AER participant involvement and consultation requirements, AER non-routine license applications, Surface Rights Board applications and how to use these processes to gain access to land. While the focus of the course will be Overcoming the Five Dysfunctions of a Team May 31, :30 a.m. to 4:30 p.m. This seminar is built on the assumption that great teams attract great team players, and that great team players on great teams achieve more collectively than they could on their own. Using Patrick Lencioni s book The Five Dysfunctions of a Team as a template, this day long seminar teaches participants how to strengthen their teams, improve their self-awareness and sharpen their leadership skills. The course also includes a number of practical exercises that can be used to overcome hurdles that stand in the way of building an effective team. 22 Sayer Energy Advisors... The Leading Expert in Corporate Advisory Services Corporate Valuations Fairness Opinions Expert Witness Assignments Strategic Partnerships and Joint Ventures Shareholder Value Analysis Corporate Restructurings For information on our services visit our website: or contact Alan Tambosso at or atambosso@sayeradvisors.com

25 June 2016 Surface Rights Law June 1, :30 a.m. to 4:30 p.m. Pipeline Plain Talk Series, Part 3 (PSL ) NEW BUSINESS LUNCHEON June 14, :30 a.m. to 1:30 p.m. This course is for the purpose of learning the applicable Statutes and Regulations that govern freehold surface land agreements and the execution of such documentation. The course will include a review of the Land Agents Licensing Act, Land Titles Act, Surface Rights Act, Dower Act, Devolution of Real Property Act, Agricultural and Recreational Land Ownership Act, Law of Property Act and a number of other statutes in force in the Province of Alberta that land agents should be aware of CAPL Operating Procedure June 2, :30 a.m. to 4:30 p.m. This seminar is intended for anyone who is seeking to learn about the new 2007 Operating Procedure. All experience levels are welcome, but it should be noted that the course will not be focused on the basics of the Operating Procedure. It is meant to enable personnel to appreciate substantive differences between the 1990 and the 2007 documents. Part 3 of the Pipeline Plain Talk Series will explore matters related to pipeline decommissioning, abandonment and reclamation from owner/operator and stakeholder perspectives. This 1.5 hour seminar will focus on Alberta Energy Regulator (AER) and National Energy Board (NEB) provisions for pipeline abandonment. Stakeholder, environment, legal and financial aspects of pipeline abandonment will also be discussed. After attending the seminar, participants will leave with knowledge of: Provincial and Federal requirements for pipeline decommissioning, abandonment/reclamation, pipeline abandonment options including pipeline removal (completely or partially), pipeline abandonment in place, landowner/stakeholder engagement strategies, what potential issues/concerns to prepare for, National Energy Board Abandonment Funding Program and other financial considerations, as well as Legal issues related to pipeline abandonment and post pipeline abandonment. m 23

26 Roster Updates New Members The following members were approved by a Motion on April 5, 2016: Applicant Current Employer Sponsors Active David Clark Twin Butte David Heasman Energy Ltd. Gordon Howe Michael Penner Ebony Thiel Mount Royal University Andrea Gill Christopher True University of Calgary Robert Schulz Active to Senior Norm Ganes On the Move Brian Bidyk Breanne Carson Independent m Davis LLP to DLA Piper (Canada) LLP Centrica Energy Canada to Independent Lindsay Clayton Imperial Oil George Cracco Resources Robert Friz, P.Land Gary Morris Kevin Koe Repsol Oil Len Moriarity, P.Land & Gas Canada Inc. Gary Richardson, PSL Murray Watchorn Heather Neustaedter Harvest Operations Linda Bigelow Corp. Teresa Dickie Karen Hertel Associate Katelyn MacDonald Crescent Point Peter Brimacombe, PSL Energy Corp. John Lanaras Jeff McManus Marcela Salas Repsol Oil Michael Anderson & Gas Canada Inc. Kristine Luft Gary Richardson, PSL Student Zachary Adolphe University of Calgary Robert Schulz Keven Blencowe University of Calgary Robert Schulz Austin Brady Olds College Tara Lloyd Beauman Duncan University of Calgary Robert Schulz Rebecca Histed University of Calgary Robert Schulz Jill Lebbert University of Calgary Robert Schulz Nancy Howes-Olmstead Helen Hudson Todd Humeniuk Dylan Johnson Cory Lundquist, PSL Paul Lyzaniwski Colin McKinnon, P.Land Wendy McKuski Jessica McLauchlin Denis Prefontaine Nature Conservancy Canada (AB Region) to NHO Office Services Enerplus Corporation to Independent LandSolutions LP to Independent Nexen Energy ULC to Independent Harvest Operations Corp. to Vesta Energy Ltd. Terra Energy Corp. to Independent Shell Canada Energy to Independent Harvest Operations Corp. to Independent Imperial Oil Resources to Independent Chevron Canada Resources to Independent 24 Suite 201, th Avenue Regina, Saskatchewan S4S 2N9 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

27 Steve Roth MSL Land Services Ltd. to Independent Vishal Saini Harvest Operations Corp. to Independent Linda Shields Harvest Operations Corp. to Independent Joanne Sinclaire Harvest Operations Corp. to Canalta Oil and Gas Ltd. Adam Skulsky Anegada Energy Corp. to Anegada Oil Corp. Craig Thomas ARC Resources Ltd. to TAQA North Ltd. Chris Trudel, PSL Independent to Integrated Environments (2006) Ltd. Shainy Vasanji Harvest Operations Corp. to Independent Kenneth Young, P.Land Kevin Young Enerplus Corporation to Independent Rife Resources Ltd. to Alberta Ltd. m In Memoriam Bernie Wylie It is with deepest sadness that the CAPL announces the recent passing of Bernhard (Bernie) Wylie on March 12, 2016 at the age of 84. He is survived by his four children, Shane (Robyn), Troy, Tanis (Gary), and Mark (Maureen) as well as eight grandchildren and thirteen great-grandchildren. He was predeceased by his wife Grace and beloved partner Eva Sherrington. Bernie was born in Calgary and later moved to Berkeley, California when he was awarded a full scholarship in hockey. He attended the University of California where he obtained a Bachelor of Arts in Education. Upon returning to Calgary, he embarked on a long and distinguished oil industry career starting with Imperial Oil as a landman scout. He went on to Atlantic Richfield as a landman, and in 1978 he joined Paramount Resources as Vice-President of Land where he was an officer and director until May Bernie loved to golf and was a member of both the Silver Springs and Calgary Golf and Country Clubs. He was also part of the team that won the 1976 Alberta Mixed Curling Championships. He was a humble gentleman who lived by the Golden Rule and will be truly missed by all of those that had the opportunity to know him. m * 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 25

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29 The Social Calendar EVENT DATE TIME LOCATION COST (INCLUDING GST) CONTACT NAME CONTACT PHONE CONTACT REGISTRATION DEADLINE 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) May-16 CAPL June General Meeting 22-June-16 7:30 AM The Westin Hotel Members: No Charge Student Members $31.50 Non-Members: $63.00 Karin Steers Kaitlin Polowski (403) June-16 CAPL, CAPLA, IRWA Triple Round-Up 23-Jun-16 4:30 PM National on 10th Ave Members: $26.25 Non-Members: $36.75 caplacanada.org caplacanada.org caplacanada.org N/A * Information and online registration: General Meetings: Social: LAND ACQUISITIONS FIRST NATIONS CONSULTATION PROJECT MANAGEMENT AER CROWN APPLICATIONS ANNUAL COMPENSATION REVIEWS DAMAGE SETTLEMENTS PUBLIC CONSULTATIONS & NOTIFICATIONS THE NAME IN SURFACE LAND ACQUISITIONS SHERWOOD PARK Info@hurland.ca 27

30 CAPL Calendar of Events May 3 Monday Board Meeting 5 Thursday Acquisitions and Divestments: The Paper Chase 10 Tuesday British Columbia P&NG Continuations (Tenure Management) 10 Tuesday Facilities Overview (PSL ) 11 Wednesday Oil and Gas Land Surveying: An Alberta Perspective (PSL ) 11 Wednesday Alberta Crown Land Sale 11 Wednesday Manitoba Crown Land Sale 12 Thursday Saskatchewan P&NG Regulations 17/18 (Tues/Wed) 2015 CAPL Farmout and Royalty Procedure 17 Tuesday Pipeline Plain Talk Series Part 2 (PSL ) 18 Wednesday British Columbia Crown Land Sale 19 Thursday Well Spacings and Holdings 23 Monday Victoria Day 25 Wednesday Alberta Crown Land Sale 25 Wednesday Acquisitions and Title Review: A Practical Guide 25 Wednesday Surface Land Fundamentals 26 Thursday Merit Awards Dinner 31 Tuesday Overcoming the Five Dysfunctions of a Team 31 (Tues/Wed) Economic Considerations for Land Deals (continues on June 1) 31 (Tues-Sat) Salmon Fishing Trip (continues to June 4) m June 1 (Tues/Wed) Economic Considerations for Land Deals (continues from May 31) 1 Wednesday Surface Rights Law (PSL ) 2 Thursday 2007 CAPL Operating Procedure 7 Tuesday Saskatchewan Crown Land Sale 7 Tuesday Board Meeting 8 Wednesday Alberta Crown Land Sale 14 Tuesday Pipeline Plain Talk Series Part 3 (PSL ) 15 Wednesday British Columbia Crown Land Sale 22 Wednesday Alberta Crown Land Sale 22 Wednesday General Meeting (Breakfast) 23 Thursday Triple Round-Up 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 320, 4 Avenue S.W. 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, m June Meeting June 22, 2016 Breakfast Meeting Speaker: Paul Negenman Time: Where: Cost: 7:30-9:30 a.m. The Westin Calgary 320, 4 Avenue S.W. 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, June 17, m 28

31 There are a lot of bases to cover for a successful acquisition or divestiture. Let our team of experts bring your deal home. Calgary I Bentley I Lloydminster I Edmonton I Grande Prairie I Lampman I Toronto I Fredericton LandSolutions can provide fully functional teams or individuals offering specialized support where you need it most. For acquisition or divestiture done right, count on the experts. To learn more, call us toll free at or visit us at

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