British Columbia Ministry of Energy, Mines and Petroleum
Resources BC Tenure Regulations CAPL October 19, 2010 October 19,
2010 Page 1.
Slide 2
British Columbia Ministry of Energy, Mines and Petroleum
Resources SEMINAR OUTLINE PART 1 Oil & Gas in British Columbia
Legislation and Incentive Initiatives Clean Energy Act Oil and Gas
Activities Act Royalty Credit Programs First Nations Engagement
Relationships and Agreements Caribou Conservation and Habitat
Protection Page 2.
Slide 3
British Columbia Ministry of Energy, Mines and Petroleum
Resources SEMINAR OUTLINE (continued) PART 1 (continued) Community
and Landowner Engagement Crown Sale and Referral Process
Organizational Structure and Function Accomplishments and
Initiatives PART 2 Tenure Resources for Tenure Managers
Introduction to BCs tenure, land, and zone systems Permits Page
3.
Slide 4
British Columbia Ministry of Energy, Mines and Petroleum
Resources SEMINAR OUTLINE (continued) PART 2 (continued) Drilling
Licences Leases PART 3 Payments & Instruments e-Payments
Transfers, Encumbrances, and Related Page 4.
Slide 5
British Columbia Ministry of Energy, Mines and Petroleum
Resources Laurel Nash, Executive Director, Oil and Gas Titles
Branch250-952-0335 POSTINGS, PETROLEUM TITLES ONLINE, WEBMASTER,
MAPPING Chris Blaney, Manager, Crown Sale and GIS
Services250-952-0344 PRE-SALE CONSULTATIONS, TENURE CAVEATS May
Mah-Paulson, Director, Resource Development250-952-0709 GEOLOGY,
ZONE DESIGNATION Dave Richardson, Manager, Geology 250-952-0359
DRILLING LICENCES, WORK PROGRAMS, PERMITS Terry Branscombe, Senior
Tenure Management Advisor250-952-0340 DRILLING LICENCES, LEASE
CONTINUATIONS Cindy Kocol, Tenure Management Advisor250-952-0342
DRILLING LICENCES, TRANSFERS, ENCUMBRANCES Christine McCarthy,
Tenure Management Advisor250-952-0341 E-PAYMENTS, BCeID,
PRE-AUTHORIZED DEBITS Carolyn Desjardins, Manager, Revenue
Collection, Reconciliation and Reporting250-356-1059 GENERAL
INQUIRIES250-952-0333 WWW:
http://www.empr.gov.bc.ca/titles/[email protected] Key
Contacts Page 5.
Slide 6
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 6. OIL AND GAS IN BRITISH COLUMBIA
Slide 7
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 7. CURRENT MEMPR INITIATIVES
Slide 8
British Columbia Ministry of Energy, Mines and Petroleum
Resources Clean Energy Act (2010) The Clean Energy Act, 2010,
builds on the foundation of the BC Energy Plan and the Climate
Action Plan Three policy goals: 1. Ensuring electricity self
sufficiency at low rates; 2. Harnessing BCs clean power potential
to create jobs in every region; and 3. Strengthening environmental
stewardship and reducing greenhouse gases. Page 8.
Slide 9
British Columbia Ministry of Energy, Mines and Petroleum
Resources BC Oil & Gas Activities Act (OGAA) OGAA passed in
2008; Became law October 4, 2010; See OGC website:
http://www.ogc.gov.bc.ca/OGAA/ Page 9.
Slide 10
British Columbia Ministry of Energy, Mines and Petroleum
Resources OGAA: Consolidation of legislation Tenure Admin. Explore
& Develop Petroleum & Natural Gas Act Pipeline Act OGC Act
Specified Enactment Powers OGAA Mediation and Arbitration Board
changed to Surface Rights Board: www.surfacerightsboard.bc.ca The
amended version of the P&NG Act is on the BC Laws website:
http://www.bclaws.ca Page 10.
Slide 11
British Columbia Ministry of Energy, Mines and Petroleum
Resources OGAA: Summary of Changes Modernized, consolidated
regulatory framework; Flexibility & innovation; Enhanced
C&E framework; Stakeholder input & comments; Protect/manage
environmental values Formal review and appeal process Page 11.
Slide 12
British Columbia Ministry of Energy, Mines and Petroleum
Resources OGAA: Summary of Changes Permitting: Consultation &
notification OGC must consider Governments Environmental Objectives
(GEOs) Review & appeal provisions Compliance history
consideredActivities: Industry standards Results-based requirements
Environmental protection & management Safety & security
Page 12.
Slide 13
British Columbia Ministry of Energy, Mines and Petroleum
Resources Targeted Royalty Programs What was the challenge?What was
the solution? B.C. drilling activity very concentrated during
winter months, when ground frozen Summer Royalty Credit Program
Western Canada sedimentary basin deepens towards the West Deep
Royalty Credit Program New, conventional wells with lower
productivity Marginal Royalty Program Tight gas development
Ultra-marginal (tight gas) Royalty Program Coalbed gas potential
development challenges Coalbed Methane Royalty Program White spaces
and areas with limited infrastructure (roads/pipes) available
Infrastructure Royalty Credit Program Huge potential in new,
remote, high-risk unconventional resources Net Profit Royalty
Program Page 13.
Slide 14
British Columbia Ministry of Energy, Mines and Petroleum
Resources How Can These Royalty Programs Help Develop
Unconventional Resources? These programs can be combined in many
cases, thus providing enough margin to move certain projects to
economic territory. Example - a well that a road project (an
infrastructure credit), is drilled in the summer, is deep, and is
marginal can receive all the associated benefits for those
programs. For more information:
http://www.empr.gov.bc.ca/OG/oilandgas/royalties/Pag
es/default.aspx Page 14.
Slide 15
British Columbia Ministry of Energy, Mines and Petroleum
Resources Infrastructure Royalty Credit Program Oil and Gas
Stimulus Package Infrastructure Royalty Credit Program (2010):
Facilitates increased oil and gas exploration and production in
under-developed areas and extends the drilling season to allow for
year-round activity Issued a request for applications for road and
pipeline projects in March 2010 In August 2010, $115.6 million in
royalty credits were awarded to 16 companies for 21 natural gas and
petroleum infrastructure projects Stimulus Package (August 2009): 4
royalty initiatives and 2 regulatory initiatives designed to
address economic slowdown by generating new stimulus for drilling
in B.C. Page 15.
Slide 16
British Columbia Ministry of Energy, Mines and Petroleum
Resources Long Term Results: Becoming a Leader in North American
Natural Gas Markets Second natural gas producer in Canada, after
Alberta Increasing market share in Canada Potential to triple
production as unconventional natural gas develops existing
production 1 Tcf/year Page 16.
Slide 17
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 17. FIRST NATION AND COMMUNITY ENGAGEMENT
Slide 18
British Columbia Ministry of Energy, Mines and Petroleum
Resources First Nation Engagement Recent legal decisions confirm
Aboriginal rights exist in B.C. Means consultation at a pre-tenure
stage Aboriginal and Treaty rights are protected under section 35
of the Constitution Act 1998 Halfway (Metachia) decision confirmed
government must consult Results in change in government policy
dealing with First Nations and confirms need to consult at the
tenures stage Page 18.
Slide 19
British Columbia Ministry of Energy, Mines and Petroleum
Resources First Nation Engagement Assign caveats in the Notice of
Public Tender that respond to First Nation comments "Oil and Gas
Tenure 101" Presentations to Chief & Council and Lands Staff
Responsive to First Nation comments Provide more detailed mapping
and information for specific sites Meet to resolve area-specific
issues Page 19.
Slide 20
British Columbia Ministry of Energy, Mines and Petroleum
Resources New Relationship Significant steps taken by government to
recognize and reconcile the gap between aboriginal people and other
British Columbians Milestones reached: Improved Treaty process
Reconciliation and Economic Benefit Agreement Revenue Sharing
Agreements on Mine Projects Land Use Plans Language and culture
preservation Support for aboriginal learners Improved health care
and housing For further information visit:
http://www.gov.bc.ca/themes/new_relationship.html Page 20.
Slide 21
British Columbia Ministry of Energy, Mines and Petroleum
Resources Treaty 8 Treaty originally signed in 1899 For further
information visit:
http://www.ainc-inac.gc.ca/al/hts/tgu/pubs/t8/trty8- eng.asp#chp4
Page 21.
Slide 22
British Columbia Ministry of Energy, Mines and Petroleum
Resources Economic Benefits Agreement Outlines obligations of
British Columbia Outlines when benefits are paid to a band Outlines
dispute resolution procedures Outlines obligations of Treaty 8
First Nations Doig River Prophet River West Moberly EBA enables
resource management agreements; more specifically, the Long Term
Oil and Gas Agreement. For further information visit:
http://www.gov.bc.ca/arr/treaty/key/down/treaty_8_eba.pdf Page
22.
Slide 23
British Columbia Ministry of Energy, Mines and Petroleum
Resources T8-BC Long Term Oil and Gas Agreement (LTOGA) The
Ministry and the OGC signed a completed LTOGA with BC-based Treaty
8 First Nations in the Spring of 2009. LTOGA is separate from the
OGCs Consultation Process Agreements The main categories of the
agreement are the Crown land disposition process, emergency
response management, compliance and enforcement, reclamation,
collaborative projects and commitment to ongoing communication and
educational opportunities. The LTOGA will be administered by an
Implementation Committee that will find efficiencies by working
with the CPA Implementation Committee Page 23.
Slide 24
British Columbia Ministry of Energy, Mines and Petroleum
Resources T8-BC Long Term Oil and Gas Agreement (LTOGA): Industry
Engagement During negotiations, the Ministry/OGC and Treaty 8 had a
series of workshops with First Nation and Industry participation
(including CAPL and CAPP representatives). A December 2008 workshop
focused on identifying issues and collaborative solutions in the
tenuring process. The negotiation teams used the ideas and input
from the workshops in drafting the Agreement. In September 2009 the
Ministry/OGC and Treaty 8 held a follow up workshop that focused on
how First Nation related terms and conditions could be made more
clear and transparent for First Nations, industry and Government.
The Parties will continue to engage with Industry in the
implementation of the Agreement. Page 24.
Slide 25
British Columbia Ministry of Energy, Mines and Petroleum
Resources Fort Nelson First Nation Fort Nelson First Nation (FNFN)
were an original signatory to the Treaty 8 Economic Benefit
Agreement (EBA) and participant in the negotiation of the
Collaborative Management Agreements, including the Long Term Oil
and Gas Agreement. In April of 2009, FNFN voted to withdraw from
the Treaty 8 EBA in favour of pursuing solutions outside of the
Treaty 8 EBA framework. The Ministry and the OGC are currently
working with the leadership of FNFN and the Horn River Producers
Group with regard to their interests and concerns. Page 25.
Slide 26
British Columbia Ministry of Energy, Mines and Petroleum
Resources Treaty 8 Consultation Process Agreements Treaty 8
Consultation Process Agreements (CPA) are due to expire March 31,
2011. The CPA Implementation Committee is currently undertaking a
review to prepare for the renewal of these agreements.
Implementation Committee is composed of Treaty 8 land managers and
representatives from the OGC and MEMPR. Page 26.
Slide 27
British Columbia Ministry of Energy, Mines and Petroleum
Resources Caribou Conservation and Habitat Protection Northeastern
BC encompasses the western extent of boreal caribou in Canada,
which are listed as threatened and Priority 1 species for action
under the BC Conservation Framework. 500,000 hectares of boreal
caribou habitat have been set aside as resource review areas (RRAs)
where no natural gas and petroleum tenure requests will be accepted
for 5 years. The RRAs will be revisited after five years when the
effectiveness of caribou population management measures and
population assessments are better understood. Government will
collaborate on this step with First Nations, industry and
stakeholders. Key aspects of Boreal Caribou management and recovery
will be formalized and enabled through the implementation of the
Oil and Gas Activity Act (OGAA) Environmental Protection and
Management Regulation. Page 27.
Slide 28
British Columbia Ministry of Energy, Mines and Petroleum
Resources Resource Review Areas (RRAs) Source:
http://www.empr.gov.bc.ca/Titles/OGTitles/InfoLetters/IssueDate/Pages/TACRD-10-10.aspx
Page 28.
Slide 29
British Columbia Ministry of Energy, Mines and Petroleum
Resources Community Engagement Page 29.
Slide 30
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 30. Northeast Energy and Mines Advisory Committee -
NEEMAC NEEMAC was established in 2006 to facilitate community
engagement in relation to energy, mining and petroleum issues 2008
achievements: Landowner Notification Program Oil and Gas Activities
Act input Coordination Agreement between OGC and Mediation and
Arbitration Board Creation of Regional Executive Director position
in NE British Columbia Subcommittee consisting of industry,
landowners and govt., working on a Standard Surface Lease Agreement
for private landowners to be included as part of LON Program For
further information on NEEMAC visit:
http://www.empr.gov.bc.ca/MACR/CommunityRelations/Pages/NEEM
AC.aspx
Slide 31
British Columbia Ministry of Energy, Mines and Petroleum
Resources Landowner Notification Program initiated in April 2008
Landowner Notification Program provides landowners with:
information about oil and gas exploration and development, and
opportunity to provide companies surface feature information. The
highest bidder is provided checklist(s) with Landowner comments For
further information visit:
http://www.landownernotification.gov.bc.ca/ Page 31.
Slide 32
British Columbia Ministry of Energy, Mines and Petroleum
Resources Standard Surface Lease (Voluntary) Negotiated 2007-08:
CAPL, SEPAC, CAPP together with MEMPR and Land Owner groups Final
Version Completed with organizational commitment: September, 2009
Included in BC Landowner Notification materials: October 2009 Page
32.
Slide 33
British Columbia Ministry of Energy, Mines and Petroleum
Resources Surface Lease Agreement - Affirmation A surface lease
between landowners and industry members is an agreement between
parties, and may need to be tailored to address the specific
concerns of each party. The Canadian Association of Petroleum
Producers encourages its members to use appropriate clauses of the
sample agreement to enter into site specific agreements. The only
exception to this is clause 4. These provisions are required by the
provisions of B.C. Reg.497/74 and, as such, must form a part of
every surface lease in British Columbia. Page 33.
Slide 34
British Columbia Ministry of Energy, Mines and Petroleum
Resources Farmers Advocate Office opened October 1, 2010, funded by
Peace River Reg. Dist. & MEMPR Based in Dawson Creek, B.C.
Provide a no-fee information service to NE B.C. rural landowners
related to oil and gas development: Disseminating information
Resolving problems Emphasizing facilitation and negotiation An
independent, effective gateway to existing organizations For
further information visit: www.farmersadvocate.ca Page 34.
Slide 35
British Columbia Ministry of Energy, Mines and Petroleum
Resources ACQUIRING OIL AND GAS TENURE IN B.C. Page 35.
Slide 36
British Columbia Ministry of Energy, Mines and Petroleum
Resources Subsurface Ownership Page 36. Two forms of subsurface
ownership: Crown: MEMPR issues Crown-owned subsurface tenures and
consults on all of these requested issuances Freehold: There are
cases where subsurface is freehold and owned by the private
parties. These may be for all rights or specific rights e.g. coal,
phosphate and PNG OGC regulates all industry activity, whether
Crown or freehold
Slide 37
British Columbia Ministry of Energy, Mines and Petroleum
Resources Oil & Gas Tenure Page 37. Tenure does provide :
exclusive rights to the subsurface resource right to apply to the
Oil and Gas Commission (OGC) for activities approval Tenure does
not provide: the authority to conduct any activities on lands (e.g.
drilling)
Slide 38
British Columbia Ministry of Energy, Mines and Petroleum
Resources Sale Process Monthly auctions of tenure Industry
nominates parcels for each auction Internal review Proposed parcels
referred to First Nations, local governments and Provincial
agencies If parcel accepted for sale posting, then caveats added to
proposed tenure Proposed tenure is advertised seven weeks prior to
sale date Interested parties submit sealed bids If sold (bids not
always accepted), highest cash offer Page 38.
Slide 39
British Columbia Ministry of Energy, Mines and Petroleum
Resources Internal Review and Process Distribute Referrals First
Nations Provincial Ministries Local/Regional Governments Returns
Compiled for Analysis Monthly Rights Auction Notice of Public
Tender Posting Requests Determine Crown PNG Rights Oil and Gas
Posting Request and Sale Process Page 39. Landowner Notification 12
sales per year 106-day process
Slide 40
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 40. Posting Request Pre-tenure process is initiated
by posting requests by industry for PNG rights Companies request
parcels for each sale, which includes the following information:
Specific formations(s) requested Parcel configuration if more than
one parcel is requested Companies do not provide information on
what development will take place or what resource they are
targeting
Slide 41
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 41. Internal Review and Process Parcels are reviewed
to identify if MEMPR is able and willing to send parcels out for
review The Oil and Gas Commission (OGC) participates in this
internal review process For example: Are the parcels configured
correctly (i.e., on spacing area) Are the rights available Do the
parcels overlap: Previously deferred parcel Land use planning areas
(PMT) Areas which require Pre-Tenure Plan (MK)
Slide 42
British Columbia Ministry of Energy, Mines and Petroleum
Resources Referral Process First Nations, local governments, and
Crown Agencies are sent referral packages. MEMPR encourages FN to
provide: Site-specific information when available: Gravesites,
cabins, campsites, etc., and What current treaty activities are
taking place, on what species and when these activities are
occurring Page 42.
Slide 43
British Columbia Ministry of Energy, Mines and Petroleum
Resources Referral Comments Comments requested within four weeks
Comments generally focus on high level access management issues, do
include some site specific information Comments are assessed to
determine next steps: Proceed to disposition Not to proceed for
disposition Further consultation/research Page 43.
Slide 44
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 44. Referral Comments Provincial Ministries First
Nations Local/Regional Governments Review parcels for conflict
with: Official Community Plans residential areas drinking water
supply areas Review parcels for conflict with: reserves sacred
areas/ burial grounds hunting sites traditional use sites Review
parcels for conflict with: wildlife habitats other tenure holders
(e.g. grazing, forest, coal)
Slide 45
British Columbia Ministry of Energy, Mines and Petroleum
Resources Caveats Created Where appropriate, comments are used to
assign caveats to reflect issues or concerns that should be
considered prior to development. Caveats identify high level issues
which: The OGC should be aware of at the activity stage Proponents
should be aware of when acquiring tenure Identify that potential
mitigation strategies may be required at the activity stage Page
45.
Slide 46
British Columbia Ministry of Energy, Mines and Petroleum
Resources Caveat Examples Page 46. Caveats near First Nation areas
(examples) X FIRST NATION HAS REQUESTED ENGAGEMENT PRIOR TO
ON-THE-GROUND ACTIVITIES. TRADITIONAL USE, ARCHAEOLOGICAL, OR
WILDLIFE ASSESSMENTS AND MITIGATION PLANS MAY BE REQUESTED PRIOR TO
ON-THE-GROUND ACTIVITIES. PARCEL OVERLAPS TRAPLINE REGISTERED TO
FIRST NATION COMMUNITY MEMBER
Slide 47
British Columbia Ministry of Energy, Mines and Petroleum
Resources Caveat Examples Page 47. Caveat near
community/residential area (example) PARCEL CONTAINS OR IS NEAR
RESIDENTIAL DEVELOPMENTS. THE OIL AND GAS COMMISSION PUBLIC
ENGAGEMENT AND DISPUTE RESOLUTION MANAGER RECOMMENDS THAT OPERATORS
CONSIDER REDUCING OR ELIMINATING FLARING, AND MANAGE NOISE AS PER
BC NOISE CONTROL BEST PRACTICES GUIDELINES.
Slide 48
British Columbia Ministry of Energy, Mines and Petroleum
Resources Caveat Examples Page 48. Caveats in the Horn River
(examples). PARCEL IS LOCATED WITHIN HORN RIVER, MONTNEY OR CORDOVA
EMBAYMENT BOUNDARIES IN WHICH SHALE GAS RECOVERY AND TECHNOLOGY IS
ANTICIPATED; PARTICIPATION IN A WATER OR ACCESS PLANNING PROCESS
WITH OTHER TENURE HOLDERS MAY BE REQUIRED TO COORDINATE ACTIVITIES,
EXPLORATION AND DEVELOPMENT.
Slide 49
British Columbia Ministry of Energy, Mines and Petroleum
Resources Enhanced Collaboration with the OGC We have been working
with the OGC to look for opportunities to better link the MEMPR
pre-tenure referral process with that of the OGC activity
application referral process MEMPR assigns caveats to individual
tenure parcels based on comments received through the referral
process and internal analysis; this includes discussions with the
OGC to ensure there is a common understanding of the intent of the
assigned caveats At the activity application stage, the OGC reviews
caveats assigned to the relevant PNG tenure Page 49.
Slide 50
British Columbia Ministry of Energy, Mines and Petroleum
Resources Notice of Public Tender Prepare full parcel description
for publication. Page 50.
Slide 51
British Columbia Ministry of Energy, Mines and Petroleum
Resources Landowner Notification The Landowner Notification
packages are sent out six weeks prior to the monthly rights sale by
Public Auction. Package includes: Cover/information letter Oil and
Gas and You Booklet Property Checklist Standard Surface Lease
Agreement Map Completed property checklists are sent by the
Ministry to the company that successfully acquires tenure this
information is intended to assist companies to engage landowners
and plan development Page 51.
Slide 52
British Columbia Ministry of Energy, Mines and Petroleum
Resources Monthly Disposition Interested parties submit sealed bids
Parcel awarded to top bidder if considered fair value Page 52.
Slide 53
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 53. Sale Process Schedule - 2011 Source:
http://www.empr.gov.bc.ca/Titles/OGTitles/InfoLetters/IssueDate/Pages/TACRD-10-13.aspx
Disposition DateClosing Date for Postings Withdraw,Postpone, Revise
Deadline Date Notice of Public Tender Published NB or NAB Closing
Date January 19, 2011October 5, 2010November 17, 2010December 2,
2010January 25, 2011 February 23, 2011November 9, 2010December 22,
2010January 6, 2011March 1, 2011 March 30, 2011December 14,
2010January 26, 2011February 10, 2011April 5, 2011 April 27,
2011January 11, 2011February 23, 2011March 10, 2011May 3, 2011 May
25, 2011February 8, 2011March 23, 2011April 7, 2011May 31, 2011
June 22, 2011March 8, 2011April 20, 2011May 5, 2011June 28, 2011
July 20, 2011April 5, 2011May 18, 2011June 2, 2011July 26, 2011
August 17, 2011May 3, 2011June 15, 2011June 30, 2011August 23, 2011
September 14, 2011May 31, 2011July 13, 2011July 28, 2011September
20, 2011 October 12, 2011June 28, 2011August 10, 2011August 25,
2011October 18, 2011 November 9, 2011July 26, 2011September 7,
2011September 22, 2011November 15, 2011 December 14, 2011August 30,
2011October 12, 2011October 27, 2011December 20, 2011
Slide 54
British Columbia Ministry of Energy, Mines and Petroleum
Resources Crown Sales-Adjudication Province reserves the right to
reject any or all bids Bid adjudication based on a technical review
of: Area geology Historic prices Current bidding trends Economic
climate For bids not accepted, comment in results posting will be
No bid or No acceptable bid Page 54.
Slide 55
British Columbia Ministry of Energy, Mines and Petroleum
Resources Improvements/ Initiatives Longer timeline: from 99 days
to 106 days Enhanced collaboration with the OGC Increased
communication/response to local government staff and First Nation
land staff with regards to comments provided Increased
communication with industry on expectations quarterly meetings
Enhanced maps to assist local government staff and First Nation
land staff in the review of the parcels Page 55.
Slide 56
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 56. TITLES BRANCH
Slide 57
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 57. Ministry Structure Deputy Minister Ministry of
Energy, Mines and Petroleum Resources Assistant Deputy Minister
Titles, Aboriginal and Corporate Relations Division Assistant
Deputy Minister Oil and Gas Division Assistant Deputy Minister
Mining and Minerals Division Assistant Deputy Minister Electricity
and Alternative Energy Division
Slide 58
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 58. Titles, Aboriginal & Corporate Relations
Division Structure
Slide 59
British Columbia Ministry of Energy, Mines and Petroleum
Resources Titles Branch Structure Page 59.
Slide 60
British Columbia Ministry of Energy, Mines and Petroleum
Resources Titles Branch Functions Subsurface Tenuring Tenure
dispositions (sales) Creation/maintenance of geological zone
descriptions Land access restrictions (caveats): Client and
stakeholder engagement First Nation and Community engagement Land
Owner Notification Program Mapping: First Nation consultation Land
Access/Land Use Resource Development Geology Special Requests Title
Administration: Fees, rentals & drilling deposits Renewals,
continuations, extensions Tenure conversions Cancellations Splits,
transfers & encumbrances Creation/evaluation of policy and
legislation re oil, gas, mineral and geothermal resources Review
and update PNG Act and Regulations, Mineral Tenure Act and
Regulations and Geothermal Resources Act and Regulations Page
60.
Slide 61
British Columbia Ministry of Energy, Mines and Petroleum
Resources Resource Development First Nations and Community
Engagement Lead Referral process for land sales Daily client and
stakeholder engagement First Nation and Community Engagement LTOGA
EBAs Official community plans Landowner Notification Program
Geothermal Referral Process Coal Referral Process Links - Oil and
Gas Division - Electricity and Alternative Energy Division -
Aboriginal Relations Division - Oil & Gas Commission - Other
agencies/levels of Government Page 61.
Slide 62
British Columbia Ministry of Energy, Mines and Petroleum
Resources Resource Development Crown Sales and GIS Services
Responsible for principle phase of Crown Sale Management Program
Daily client/stakeholder engagement Mapping Offered parcels
shapefiles are being posted to website as of January 2010. Ad Hoc
Mapping Requests in Support of: First Nation Consultation Land
access/Land use Resource Development Geology Special requests
Minister Public Affairs Forecasting for Crown sales Page 62.
Slide 63
British Columbia Ministry of Energy, Mines and Petroleum
Resources Policy and Planning Policy Review and update: PNG Act and
Regulations Geothermal Act and Regulations Review and develop
policy and procedures Responding to Energy Plan policy actions
Updating information letters Oil and Gas Tenure 101 Geothermal
Tenure 101 Links - Compliance and Administration Branch - Corporate
Policy & Planning Branch - Oil and Gas Division - Alternative
Energy Division - Oil and Gas Commission - Other agencies/levels of
Government Page 63.
Slide 64
British Columbia Ministry of Energy, Mines and Petroleum
Resources Policy & Planning Tenure Management Maintenance of
Provincial oil and gas titles registry PTS (Petroleum Titles System
is web-based application to provide direct access to Crown oil
& gas titles) Daily client and stakeholder engagement :
Legislation and Regulations: Review PNG Act and Regulations.
E-business Ownership changes Lease continuations Conversions
Permits DLs Industry training sessions CAPL Seminar Oct. 19/10
Links - Compliance and Administration Branch - Oil and Gas
Commission - Oil and Gas Division Page 64.
Slide 65
British Columbia Ministry of Energy, Mines and Petroleum
Resources GeologyGeology Creation and maintenance of system of
geological zone descriptions that divide B.C. into packages which
can be issued in the form of Crown PNG title Evaluates and make
decisions on title continuation and maintenance Participates in
creation/evaluation of policy and legislation re oil, gas, and
geothermal resources Puts in place definitions that can be used in
special agreements for development of unconventional gas
Contributes expert advice to Ministry departments that promote
development of unconventional gas Daily client and stakeholder
engagement Continuations Backlog In past 6 months have reduced
6-month backlog to 45- 60 days All continuations now working on a
60-day turnaround, which is the period of application specified in
the PNG Act Land Plats to be published to industry and commercial
vendors Co-op bridging program, training for succession Links - Oil
and Gas Division - Oil and Gas Commission - Electricity and
Alternative Energy Division Page 65.
Slide 66
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 66. TITLES ACCOMPLISHMENTS
Slide 67
British Columbia Ministry of Energy, Mines and Petroleum
Resources AccomplishmentsAccomplishments POLICY & LEGISLATION
Development of the Oil and Gas Activities Act (OGAA) Provides a
streamlined and simplified regulatory framework consolidation of
the Petroleum and Natural Gas Act, Oil and Gas Commission Act and
Pipeline Act. Establishment of a Northern Caribou Management
Strategy Established Resource Review Areas (RRAs) in a portion of
the remaining untenured areas across B.C.s northern caribou range.
Planning for the Management of Boreal Caribou Established Resource
Review Areas (RRAs) in untenured areas across B.C.s boreal caribou
range, accounting for 500,000 hectares. Identification of boreal
caribou habitat for management under the OGAA. Developing
mitigation practices with First Nations and industry. Review and
amendment of the Drilling Licence Regulation (2009) Re-emphasized
Drilling Licenses (DL) as an exploration tenure. Linked risk to
reward through redefinition of earning wells and small DL grouping
rules. Page 67.TITLES2010 Business AreaRecent Accomplishments
Slide 68
British Columbia Ministry of Energy, Mines and Petroleum
Resources AccomplishmentsAccomplishments CROWN SALES & GIS
SERVICES The June 2010 natural gas and petroleum rights sale was
the fifth largest on record for B.C., contributing over $404
million in bonus bids to the calendar year total of over $609
million. Crown Sale Performance (calendar year) Page 68.TITLES2010
Business AreaRecent Accomplishments 20092010 (to July) # of
hectares disposed 389,146281,830 Total tender bonus
$892,956,403.79$662,457,744.35 Average price per hectare
$2,294$2,350.56
Slide 69
British Columbia Ministry of Energy, Mines and Petroleum
Resources AccomplishmentsAccomplishments Page 69. TITLES2010
Business AreaRecent Accomplishments RESOURCE DEVELOPMENT Completed
improvements to Landowner Notification (LON) Program as per 2009
formal review. Key changes include: Notification packages revised
for improved readability; Creation of automated map process;
Installation of direct phone line in Titles Branch specific to LON;
Follow-up phone calls with landowners initiated for each
disposition; Improved data and information tracking. Improved
communication and working relationship with the Oil and Gas
Commission (OGC) with regards to parcel conditions/caveats.
Engagement with the Ministry of Environment on streamlining the
referral process for caribou habitat. Improvements to referral
process with First Nations.
Slide 70
British Columbia Ministry of Energy, Mines and Petroleum
Resources AccomplishmentsAccomplishments Page 70. TITLES2010
Business AreaRecent Accomplishments GEOLOGY Cleared the Land Plat
publication backlog of more than two years. Land Plats will soon be
available from Crown Publications. COMPLIANCE & ADMINISTRATION
Development of IPS (Integrated Petroleum System) software, a newly
integrated system designed to replace and/or streamline current
software systems, including Petroleum Titles System (PTS),
Petroleum Accounts Receivable System (PARS), and Sales Parcel
System (SPS) design phase completed; development phase to be
completed by August 31, 2011. GEOTHERMAL RESOURCES Initiated a
pre-tenure referral process with First Nations, local governments,
and provincial agencies for four areas of industry interest June
2009. Hosted a Crown sale for geothermal exploration rights in
March 2010 for one referred area and issued a geothermal permit
near Knight Inlet (central coast). Seven additional parcels sent
out for pre-tenure referral June 2010. Next auction for geothermal
rights expected for fall 2010.
Slide 71
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 71. CURRENT INITIATIVES
Slide 72
British Columbia Ministry of Energy, Mines and Petroleum
Resources Current Initiatives eBusiness Industry Engagement Lands
Plats - used to continue Lease tenure are drafted and current.
Queens Printer will distribute after a survey of company interest
is completed by the Industry-Government Tenure Working Group.
Geothermal tenure disposition Other priority initiatives are:
Review of Mineral Tenure Act and regulations Review of Geothermal
Resources Act Review of PNG Act and Regulations Review of PNG
referral process Implementation of coal referral process
Implementation of zone-specific retention Page 72.
Slide 73
British Columbia Ministry of Energy, Mines and Petroleum
Resources eBusiness Update Integrated Petroleum System (iPS) will
transition 3 legacy applications to current technology Application
delivery and integration testing is scheduled to be complete in
Sept 2011 UAT is scheduled for Oct 2011 Industry will have an
opportunity to participate as it relates to eBidding Production
launch including eBidding is Nov 2011 ePayments Submissions issues
are, for the most part, resolved. Still dealing with some company
specific items Automated emails will be enhanced to provide clarity
for clients Some issues remain associated with refunds Page
73.
Slide 74
British Columbia Ministry of Energy, Mines and Petroleum
Resources Industry Engagement Since May 2008, a working group has
been established between industry and govt. that meets on a
quarterly basis to discuss: Improved communication Legislation and
Regulations Opportunities to work more efficiently and effectively
Educational opportunities eBusiness Developed Shared Principles to
help guide discussions around policy, legislation and regulation
changes Used the Shared Principles to guide the discussions on the
Drilling Licence Regulation amendments Page 74.
Slide 75
British Columbia Ministry of Energy, Mines and Petroleum
Resources Shared Principles Ensuring the Crown, as the resource
owner, receives an equitable share of economic rent (including all
revenue streams). Ensuring Industry receives an economically
commensurate reward and recognition for risks taken
("risk/reward"). Recognizing close linkages to environmental
footprint and stakeholder considerations. Recognizing close linkage
to First Nations considerations. Recognize the relationship and
responsibility Industry and MEMPR have to the people of BC. Viewing
tenure as an element in a continuum of the exploration and
development process, rather than as a discrete compartment.
Recognizing the close integration of tenure with the broader
regulatory and royalty regimes. Creating and maintaining a fair,
efficient, effective and transparent process for management of
tenure across the province. Maintaining flexibility to address
custom solutions for specific emerging play types and developing
technologies. Page 75.
Slide 76
British Columbia Ministry of Energy, Mines and Petroleum
Resources Review of PNG Act & Regulations The Petroleum and
Natural Gas Act (PNG Act) has not had an overall review since the
late 1980s A comprehensive review of the PNG Act is required to
ensure it is responsive to both conventional and unconventional gas
development and responds to government direction. Ministry/Industry
working group has identified priorities for further discussion
Legislation (PNGA) Expansion of Director of Petroleum Lands
discretionary power Lease term lengths Fees & rentalsRegulation
Tenuring process Rental rates for all tenure types Page 76.
Slide 77
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 77. THANK YOU! Laurel Nash Executive Lead Titles
Branch
Slide 78
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 78. PART 2 Tenure
Slide 79
British Columbia Ministry of Energy, Mines and Petroleum
Resources Tenure Management Resources Available Information
Information Letters Referral Maps, Sales Notices, Results Notices
Other Publications Subscriptions by e-mail Tools PTS Web PTO:
online Postings and Mapping ePayments Page 79.
Slide 80
British Columbia Ministry of Energy, Mines and Petroleum
Resources Online Tools Titles Home Page 80. Subscription Services
(e-mail) Posting Maps Sale Notices Sale Results Info Letters Acts
& Regs Publications PTO & PTS Web ePayments
Slide 81
British Columbia Ministry of Energy, Mines and Petroleum
Resources Online Resources Petroleum Titles Online (PTO)
http://www.ptonline.gov.bc.ca [email protected] ePayments
https://epayments.gov.bc.ca [email protected] PTS Web From
PTO home, click Title Searches (PTS Web) link
[email protected] Page 81.
Slide 82
British Columbia Ministry of Energy, Mines and Petroleum
Resources Title Documents Page 82.
Slide 83
British Columbia Ministry of Energy, Mines and Petroleum
Resources TITLE: DL 77777 - DRILLING LICENCE DESCRIPTION AMENDMENT
DATE : 2006-OCT-24 AMENDED DESCRIPTION ------------------- TRACT 1
-------- NTS 094-P-10 BLK A UNITS 94 95 NTS 094-P-10 BLK H UNITS 4
5 INC : PETROLEUM AND NATURAL GAS DOWN TO BASE OF 20002 JEAN MARIE
ZONE 20002 JEAN MARIE ZONE DEFINED IN THE INTERVAL 4140.2'-4222.7'
ON THE BHC SONIC LOG OF THE WELL W.A. 3752 A-85-G/94-P-07. NO
FURTHER TRACTS CONTAINING 260 HECTARES DATED AT VICTORIA, BRITISH
COLUMBIA 2006-OCT-24 ------------------------------ THE DIRECTOR,
ON BEHALF OF THE MINISTER OF ENERGY, MINES AND PETROLEUM RESOURCES
Description Amendments
Slide 84
British Columbia Ministry of Energy, Mines and Petroleum
Resources Acts and Regulations Petroleum and Natural Gas Act Grid
Regulation Drilling Licence Regulation Fee, Rental and Work
Requirement Regulation Storage Reservoir Regulation Page 84.
Slide 85
British Columbia Ministry of Energy, Mines and Petroleum
Resources Tenure Management Things to Manage Land Zones Fluids Size
Ownership Page 85. + Time
Slide 86
British Columbia Ministry of Energy, Mines and Petroleum
Resources Land Survey Systems Dominion Land Survey (DLS) Petroleum
Grid (NTS) Page 86.
Slide 87
British Columbia Ministry of Energy, Mines and Petroleum
Resources DLS PNG Grid Regulation Schedule 1 Familiar divisions:
LSD Section Township Range Meridian But in B.C Legal Areas (for
rent) defined by published map Peace River Block Gas Spacing Units
and Hectarage Map Peace River Block TWPs 76 - 88 RGEs 13 26 W6M
Page 87.
Slide 88
British Columbia Ministry of Energy, Mines and Petroleum
Resources DLS Page 88.
Slide 89
British Columbia Ministry of Energy, Mines and Petroleum
Resources Petroleum Grid (NTS) PNG Grid Regulation Schedule 3
Applies everywhere the DLS does not Based on longitude and latitude
Sub-divisions achieve oil and gas spacing areas similar in size to
DLS Areas taken from lookup tables Also for geothermal and coal
tenures Page 89.
Slide 90
British Columbia Ministry of Energy, Mines and Petroleum
Resources Petroleum Grid (NTS) Page 90. 8 long. 4 lat.
Slide 91
British Columbia Ministry of Energy, Mines and Petroleum
Resources Petroleum Grid (NTS) Page 91. Well location example:
d-010-A/094-H-16 Title description example: 094-H-16 Blk A Unit
10
Slide 92
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 92. Normal Spacing NTS
Slide 93
British Columbia Ministry of Energy, Mines and Petroleum
Resources Other-than-Normal Spacing Drilling and Production
Regulation Administered and declared by the OGC Generally larger
than normal spacing areas Some are already declared Peace River
Block Petroleum Grid BC YT, NWT, AB boundaries BC USA Protected
Areas 1 OTN gas spacing = 1 gas spacing for calculating earnings
from Drilling LicencesAlternatives Good Engineering Practice (GEP)
Page 93.
Slide 94
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 94. Other-than-Normal Spacing
Slide 95
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 95. Other-than-Normal Spacing
Slide 96
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 96. Other-than-Normal Spacing
Slide 97
British Columbia Ministry of Energy, Mines and Petroleum
Resources Decoding Wells Well Authorizations (WA) Simple 5-digit
number assigned to each well license the OGC issues Well Names
Consists of: Operator, (HZ), Field, Surface Location, (Exceptions)
DLS sample: BRC HTR BRASSEY 02-04-077-19, A02-04-077-19 NTS sample:
ECAOG HZ SPRUCE b-013-D/094-I-16, b-A013-D/094-I-16 Unique Well
Identifiers (UWI) A 16-digit well identifier issued at spud New
UWIs added for subsequent drilling and completion events DLS:
102041308617W603 NTS: 200D024H094H1604 Digit 1: DLS or NTS Digits
2-3: surface event sequence; see exceptions in well names Digits
4-14: Approved or actual bottom-hole location Digits 15-16:
drilling or completion event sequence First completion event in a
drilling event gets same UWI as its drilling event Page 97.
Slide 98
British Columbia Ministry of Energy, Mines and Petroleum
Resources BCs PNG Zone System Page 98. Zones are packages of one or
more formations Defined by specific intervals on reference well
logs Zone boundaries are carefully selected to avoid disputes;
widespread markers in non- productive strata 5-digit code and
(often hyphenated) zone names 34002 Artex-Halfway-Doig 33012
Montney (excluding Basal Lag) 15401 Muskwa-Otter Park-Klua-Evie
Zone code and name Digits 1-3: relative stratigraphic position
Digits 4-5: geographic identifier Numbers increase from bottom to
top Download from Other Publications page
Slide 99
British Columbia Ministry of Energy, Mines and Petroleum
Resources Zone? Pool? Formation? Page 99. Zones are geographically
constrained packages of one or more geological formations Pools are
instances of specific formations Land plats depict eligible spacing
areas within specific formations and tenure areas Leases Prove a
formation; continue a zone Drilling Licences Evaluate a formation;
earn a zone (maybe) Rights usually described in relation to a zone
base, e.g.: PNG Down to Base 36002 (from surface) NG In 36002 PET
From Base 38001 To Base 36002 PNG Below Base 36002
Slide 100
British Columbia Ministry of Energy, Mines and Petroleum
Resources Tenure Size (hectares) All tenure rentals are based on
area, measured in whole hectares Petroleum Grid (NTS) Unit NTS Unit
Areas (download) Crown Publications map GM15 For NWT/YT and other
boundary areas, call us Peace River Block (DLS) Crown Publications
map GM14 (2 sheets) Includes size of fractional spacing's on
NTS/DLS boundary Depicts lands in other-than-normal spacing areas
Regardless of source, calculate area the same Sum individual unit
areas in title, keep intermediate fractions Round sum to nearest
whole hectare Page 100.
Slide 101
British Columbia Ministry of Energy, Mines and Petroleum
Resources Tenure Size NTS Usage; find the area of units 42-47 of
Block E in 094-H-06 Map94 EFGH Sheet5 to 8 BlockE F G H Unit41-50
Page 101. Total: 6 X 69.8 or 418.8 ha.
Slide 102
British Columbia Ministry of Energy, Mines and Petroleum
Resources Tenure Size DLS Page 102. Fractional spacing areas are
predefined Whole spacing areas are defined or inferred Usage; find
the area inside the OTN GSA and sec 8-88-25 OTN: 19.0 + 21.4 + 39.7
+ 38.0 + 66.0 + 66.0 or 250.1 ha. Sec 8-88-25: 263.9 Total: 514.0
ha.
Slide 103
British Columbia Ministry of Energy, Mines and Petroleum
Resources Permits
Slide 104
British Columbia Ministry of Energy, Mines and Petroleum
Resources Main Features A right to explore for oil and gas
Available only by Crown sale Postings up to one NTS block accepted,
with cause Requires annual exploration spending Actual exploration
or cash-in-lieu payments One year initial term; renewable from 4 to
7 times Permit Class Determines work requirements, rent, and
renewal options Class B most likely Page 104.
Slide 105
British Columbia Ministry of Energy, Mines and Petroleum
Resources Permit Renewals Four to seven renewals (Class B) Annual
application required to renew 3 ways to obtain renewal approval By
affidavit of expenditures for work done By cash-in-lieu of work not
done By refundable deposit and work commitment May surrender all or
part of a Permit at renewal Payment of applicable rent, fees,
deposits, and penalties within 60 days after expiry Page 105.
Slide 106
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 106. Permits - Rent and Work Requirements
Slide 107
British Columbia Ministry of Energy, Mines and Petroleum
Resources Permits Lease Selection Fifth year work requirement must
be met (Class B) Up to 50% of the Permit area is convertible Leases
must be configured, where possible, with 4 sides in 1 of 6 shapes
defined by NTS units, and Shapes must coincide with gas spacing
areas Leases must corner other leases, or be separated by at least
2 NTS units Exceptions made to reach 50% of Permit area No
splitting of gas spacing areas Exceptions are available where
Permit shape or location prevents 50% rule, but in no case will any
one Lease exceed 9 GSUs Page 107.
Slide 108
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 108. Permits Lease Selection Available lease
configuration options, i.e., shapes Exceptions may be considered if
50% rule cannot be met with these configurations
Slide 109
British Columbia Ministry of Energy, Mines and Petroleum
Resources Drilling Licences
Slide 110
British Columbia Ministry of Energy, Mines and Petroleum
Resources Main Features A right to explore for oil and gas by
drilling wells Not a right to take production; but testing OK
Acquired only from Crown Sale Postings: 1 36 gas spacing areas Term
is 3, 4, or 5 years; depends on Area Term may be extended, at least
once, more depending on circumstances Splits not allowed; but
partial surrenders OK Convertible to Lease by drilling or grouping
Page 110.
Slide 111
British Columbia Ministry of Energy, Mines and Petroleum
Resources Term Extensions Section 3(5) - Standard Extension
Available after expiry or other extension Available once only
Pre-requisite for some other extension types One year $500 fee;
double rent ($7/ha) Application Due by expiry date Apply using
ePayments Page 111.
Slide 112
British Columbia Ministry of Energy, Mines and Petroleum
Resources Term Extensions Section 3(5.1) - Special Extension
Available after term expiry or another extension Renewable, if
delay persists and Director approves Requires: WA application be
filed with OGC at least 30 days before expiry Start of drilling is
delayed past term expiry or extension by one of: Environmental or
socio-economic study Public hearing Planning or consultation
process May include DLs that would otherwise be grouped One year,
or less Application Application due by expiry date No extra fee
Normal DL rent ($3.50/ha) Page 112.
Slide 113
British Columbia Ministry of Energy, Mines and Petroleum
Resources Term Extensions Section 3(5.3) - Coal Bed Gas
Applications must be sent before expiry Applies only to land and
rights within a coalbed gas project approved by the OGC under s.75
of OGAA May be used 5 times after both the primary term and an
"automatic" extension have expired Page 113.
Slide 114
British Columbia Ministry of Energy, Mines and Petroleum
Resources Term Extensions Sections 3(7), 3(9), 3(10) - Drilling
past expiry Available only after the standard extension, s.3(5)
Extends term to the date a rig is released from drilling operations
Drilling must be: Past 150m at midnight on expiry date Conducted
diligently Rig may be withdrawn during drilling interruptions due
to road bans or unsafe working conditions, e.g., avalanche hazard
No other well may be started during extension, except in the event
of mechanical failures in the first well Other DLs grouped with
extended DL are extended to same date Page 114.
Slide 115
British Columbia Ministry of Energy, Mines and Petroleum
Resources Grouping One Group per Earning Well Criteria for
inclusion: In the opinion of the Director, an "earning" well exists
or has been spudded on one of the DLs to be grouped All DLs to be
grouped lie within 4 km. of the DL with the earning well Use scaled
map, GIS, PTO Viewer Call to receive written verification Written
application and ePayment submission sent before earliest expiring
DL Written authority of one titleholder of each DL if applicant is
not the Payor or a titleholder of all DLs Page 115.
Slide 116
British Columbia Ministry of Energy, Mines and Petroleum
Resources Grouping Maximum Number of DLs in a Group Depends on
number of whole gas spacing areas in DLs to be grouped at time of
issue If any one DL had more than four gas spacing areas, the
maximum is two DLs in the group Otherwise, number limited only by
distance from DL with earning well, i.e., 4 km. rule always applies
Rules aim for tighter link of risk to reward Page 116.
Slide 117
British Columbia Ministry of Energy, Mines and Petroleum
Resources Why Small DL Grouping? Page 117. 3,500m
Slide 118
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 118. Grouping Distance Guide Four NTS Units or DLS
quarter-sections are always less than 4 kilometres when measured
directly north- south or east-west For all other circumstances, use
caution, i.e. GIS: Shortest distance is a diagonal line Shortest
distance is E-W or N-S, but across the DLS/NTS boundary
Slide 119
British Columbia Ministry of Energy, Mines and Petroleum
Resources Awarded in terms of gas spacing areas and zones GSAs
awarded depends on: Prescribed Area of DL When DL spans two or more
Areas, earnings are based on the Area with the greatest earnings
When well penetrates 2 or more DLs, applicant nominates one DL to
the drilled DL for both earnings and grouping eligibility Combined
length of drilling events Less any length drilled through rights
held by lease that are not necessary for the purpose of evaluating
the DL Zones awarded are to base of deepest zone "evaluated
Evaluated = significant new geological information Verifies
existence of new hydrocarbon-bearing reservoir Establish that a
known reservoir is wet or absent Establish the sedimentological or
structural characterization of a zone in a new area Page 119. Lease
Earnings
Slide 120
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 120. DL Term and Earnings
Slide 121
British Columbia Ministry of Energy, Mines and Petroleum
Resources DL Term and Earnings Page 121. Download from: Info Letter
TITLES-05-03 NEBC DL Boundary.pdf Map Wall size; print with
plotter
Slide 122
British Columbia Ministry of Energy, Mines and Petroleum
Resources When is a Zone evaluated? Significance of info rises
with: Quality and variety of information collected, and Proportion
of zone evaluated, and Distance from comparable plays Page 122.
Significant New Geological Information Collected High Low Certainty
of Earning the Zone Low High
Slide 123
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Wells Definition before August 20, 2009 remains
in force "A well drilled in a spacing area all or part of which is
in a location described in a drilling licence, and includes a well
redrilled in a spacing area formerly described in a (a)permit,
(b)drilling licence, or (c)lease... no longer in effect" A
"redrilled" well includes a "recompleted" well If the completion is
over an interval not previously completed, or, if previously
completed, it will provide significant new information Page
123.
Slide 124
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Wells Amendments of August 20, 2009 Wellbore must
be first to evaluate a particular zone on at least one spacing area
One well may be first to evaluate several spacing areas Evaluation
is deemed to have occurred when either: 150m of wellbore has been
drilled in a spacing area, or the Director is satisfied the well
evaluates the zone first Page 124.
Slide 125
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Well Off DL Page 125. Drilling Licence Lease
Yes
Slide 126
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 126. Earning Well Scenario A 1 1 Spacing Area
1Spacing Area 2
Slide 127
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Well Scenario A Page 127. 1 1 Spacing Area
1Spacing Area 2 2 2 2 2
Slide 128
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 128. Earning Well Scenario B ? ? 1 1 2 2 Spacing
Area 1Spacing Area 2
Slide 129
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Well Scenario B Page 129. 1 1 Spacing Area
1Spacing Area 2 2 2
Slide 130
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Well Scenario C Page 130. DL 1DL 2 2 2 1 1 Wells
penetrate identical zones Spacing Area 1Spacing Area 2
Slide 131
British Columbia Ministry of Energy, Mines and Petroleum
Resources Earning Well Scenario C Page 131. DL 1DL 2 1 or 2
Slide 132
British Columbia Ministry of Energy, Mines and Petroleum
Resources Lease Selection Applications e-Payments Submission THEN
Application Letter add Letter of Authority if neither Payor nor
Titleholder Include e-Payments Submission number in subject line
Letter must include, for each earning well: Name and OGC Well
Authorization (WA) Estimated total eligible wellbore length Enclose
the directional survey where applicable Estimated earnings (gas
spacing areas) Statement of deepest evaluated formation or zone
Desired configuration of Leases Earnings from two or more WAs may
be combined Use legal descriptions that match formats used in the
Drilling Licence Page 132.
Slide 133
British Columbia Ministry of Energy, Mines and Petroleum
Resources Lease Configuration The number and location of selected
Leases are up to the applicant, except Leases must: include all
spacing areas to be placed on production be located entirely within
one DL contain only contiguous tracts not result in split gas
spacing areas (oil wells excepted) Page 133.
Slide 134
British Columbia Ministry of Energy, Mines and Petroleum
Resources Leases
Slide 135
British Columbia Ministry of Energy, Mines and Petroleum
Resources Leases A right to explore for and produce oil and gas
Available from Crown Sale Max. posting is 1 GSU Converting Permits
and Drilling Licences Split from another Lease (transfer) May be
continued beyond term Page 135.
Slide 136
British Columbia Ministry of Energy, Mines and Petroleum
Resources Leases Term Page 136. Inside Area 1: 5 years Outside Area
1: 10 years A Lease overlapping both areas has a 5-year term
Posting requests and Lease selections intersecting the boundary
should be done carefully!
Slide 137
British Columbia Ministry of Energy, Mines and Petroleum
Resources Leases Continuations Several forms Section 62 Section 61
Section 61,1 (rights revert zone specific) Section 58 (rights
revert deep or specific) One year, in all cases Download from Other
Publications: Lease Continuation Options "Recommended Technical
Package Contents" Page 137.
Slide 138
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 62 Continuation Continuation by payment Year 1$15.00 /
Ha Years 2 or 3$25.00 / Ha Available three times for any 10-year
Lease No rights reversion Need not be used in consecutive years
Application made through ePayments Use the statement when no other
continuation types are anticipated for the Lease, or Use submission
and written application when other continuation types (splits) are
anticipated or desired for the Lease Page 138.
Slide 139
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 61 Continuation Continuation by drilling commitment
Drill at least one well on location of Lease during continuation
that evaluates at least one zone held by that Lease Drilling past
expiry OK, but must make best effort to reach target zone(s) named
in Well Authorization Available for any Lease No rights reversion
May be used more than once, but spacing area(s) of successful
commitment wells will be split out under s.58 Applies only to
Lease(s) being drilled Applications made through e-Payments Must
make Submission and written application Page 139.
Slide 140
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 61.1 Continuation a.k.a. 61W Continues spacing areas
in relation to existing and planned disposal operations e.g. water,
CO 2, waste fluids Shallow and deep rights revert Spacing areas
included in projects approved under s.75 of the Oil and Gas
Activities Act are not eligible Written application with supporting
technical material to accompany e-Payments for first approval Once
approved, application is by annual rental until further notice by
Director Page 140.
Slide 141
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58 Continuation Four types of continuation: 58(3)(a):
Eligible Spacing Areas 58(3)(b): Unit agreements 58(3)(c): Work
programs 58(3)(d): Establishing a well All s.58 continuations
subject to rights reversion, deep or specific zones (s.59) Leases
approved under two or more s.58 sub- section may have to be split
Page 141.
Slide 142
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58 Continuation s. 58(3)(a) Eligible spacing areas are
spacing areas that: Contain a petroleum or gas well Are located in
a project area approved by the OGC under s.75 of the Oil and Gas
Activities Act Are >50% covered by a designated EMPR pools (aka:
land plat) Are being drained from an adjacent spacing area Once
approved, continuation is by rental payment until further notice
Page 142.
Slide 143
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58 Continuation Section 58(3)(b) - unit agreements
Spacing areas within Unit Agreements Once approved, continuation is
by rental payment until further notice Section 58(3)(c) - work
programs May include multiple leases Not intended for multi-year
exploration programs, depends on circumstances (e.g., access,
scope) Section 58(3)(d) - incomplete drilling The drilling of, or
work on the establishment of, a well is incomplete on the expiry
date The Director is satisfied that the drilling or work will
continue Page 143.
Slide 144
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58(3)(c) General Features May include multiple Leases,
even multiple target zones, and different expiry dates Requires
written commitment to specific work Majority are one year only;
exceptions to this on a case-by-case basis, typically due to very
limited access and unusually large project scope Non-performance of
commitments jeopardizes future work program approvals Page
144.
Slide 145
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58(3)(c) Application must include: The locations to be
included The formation(s) that will be delineated A firm
commitment, e.g. XYZ Corp. commits to carry out the following
program of work:... A clear depiction (map) of where the work will
take place in relation to the locations to be included A clear
explanation of how the work will delineate a hydrocarbon-bearing
reservoir on each spacing area Technical package contents must
demonstrate how the work will delineate a field or pool Simple
notice of a new well Complex interpreted seismic, X-sections, well
results, etc. Page 145.
Slide 146
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58(3)(c) Programs with seismic components require a
geophysical report at year end Resource Document Look for
Requirements for Affidavits and Reports in the chapter appendix or
here: http://www.em.gov.bc.ca/Subwebs/landsale/Publications Page
146.
Slide 147
British Columbia Ministry of Energy, Mines and Petroleum
Resources s. 58(3)(d) Designed to allow leaseholders to finish
establishing a well clearly in progress Applies only to a single
Lease At minimum, must have Well Authorization before expiry
Estimated rig release date well past expiry 60 days to make any s.
58 application, but We encourage s. 58(3)(a) within 60 days where
possible More scrutiny if well not spud by expiry All rights below
the base of the deepest objective zone named in the Well
Authorization (WA) are subject to rights reversion, deep or
specific Page 147.
Slide 148
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 148. PART 3 Payments & Instruments
Slide 149
British Columbia Ministry of Energy, Mines and Petroleum
Resources ePayments Contacts: Carolyn Desjardins (250) 356-1059
[email protected] Brenda Jennings (250) 952-0331
[email protected] Shawna Logue (250) 387-5196
[email protected] Page 149.
Slide 150
British Columbia Ministry of Energy, Mines and Petroleum
Resources ePayments Mandatory October 2009 Online statements,
payments, and receipts Client initiates payment NOT Auto Debit
Payments associated with Rent and Fees for lease selections,
extensions, continuations and primary term annual rentals
Electronic refunds Mandatory Oct. 1, 2010 NOT included in ePayments
requires cheque Split Transfers Permits OIC - S 72 Agreements
Underground Storage Leases/Licences Page 150.
Slide 151
British Columbia Ministry of Energy, Mines and Petroleum
Resources BCeID is a Portal or Passport BCeID ePayments Mineral
Titles Online Petroleum Titles Online Integrated Land Mgmt Registry
GATOR Crown Land Corporate Registries Titles, Aboriginal &
Corporate Relations Division assigns Subscription Code Page
151.
Slide 152
British Columbia Ministry of Energy, Mines and Petroleum
Resources Obtain a BCeID Page 152.
Slide 153
British Columbia Ministry of Energy, Mines and Petroleum
Resources BCeIDBCeID Do not share your BCeID password with anyone
except the Company Administrator Sharing BCeID Passwords means you
are not using the system securely You can identify who makes
transactions by their BCeID for audit purposes Page 153.
Slide 154
British Columbia Ministry of Energy, Mines and Petroleum
Resources ePayments - Next Steps You have your BCeID... Company
Administrator requests subscription code Receives code then signs
onto ePayments main page Enter subscription code Add other
authorized users If you are going to be a payor on titles you will
need to submit Pre-authorized Debit forms Rental and Fee PAD Rental
and Fee PAD for refunds A BCeID, subscription code and PAD forms
are required for each of your company entities Page 154.
Slide 155
British Columbia Ministry of Energy, Mines and Petroleum
Resources ePayments User Roles BCeID Profile Manager Applies for
BCeID Appointments Company Administrator Company ePayments
Administrator Assigns roles to other users; can view, add or change
banking information; can perform all functions Payment
Administrators Make the actual payments Land Administrators
Initiate submissions to continue titles beyond their primary term
and convert drilling licences to lease Viewers View Only access
financial and/or senior staff that are not required to conduct
transactions Page 155.
Slide 156
British Columbia Ministry of Energy, Mines and Petroleum
Resources ePayments - Designated Payor Companies will need to
designate payor on all title they have ownership in Payors cannot
be designated 11 days prior to the anniversary date and 60 days
after Any registered owner or designated payor can nominate a
designated payor Crown Sale, bid letter must include who will be
the designated payor for future rental payments When a title is
issued by other means, the Designated Payor is defaulted to the
registered Owner with the highest interest In the case of 50/50,
the decision will be made alphabetically Page 156.
Slide 157
British Columbia Ministry of Energy, Mines and Petroleum
Resources Payment Types Primary Term ContinuationConversion Page
157.
Slide 158
British Columbia Ministry of Energy, Mines and Petroleum
Resources All Titles Screen To view all the titles you are a
registered Owner and/or Payor of, click on Titles Page 158.
Slide 159
British Columbia Ministry of Energy, Mines and Petroleum
Resources Managing Expiring Titles Page 159.
Slide 160
British Columbia Ministry of Energy, Mines and Petroleum
Resources Statement Types Primary Term Statement
Continuation/Extension Statement Submission Request Statement Page
160.
Slide 161
British Columbia Ministry of Energy, Mines and Petroleum
Resources Primary Term Statement Unpaid titles, Carried Forward
from the Previous Statement, appear under the red heading bar.
Unpaid titles that are part of the Current Statement appear under
the blue heading bar. Page 161.
Slide 162
British Columbia Ministry of Energy, Mines and Petroleum
Resources Continuation Submission From the Managing Expiring Titles
screen Page 162.
Slide 163
British Columbia Ministry of Energy, Mines and Petroleum
Resources Items to Remember Submissions should contain titles that
are linked geologically or geographically and share a common
technical package Confirm payment is made (Payment Acknowledgement
No.) Submit letter and technical package Include submission number
in your application letter Page 163.
Slide 164
British Columbia Ministry of Energy, Mines and Petroleum
Resources Convert to Lease Submission Convert to Lease Submission
From the All Titles screen 1. Check Title 2. Click on Create
Pending Submission Page 164.
Slide 165
British Columbia Ministry of Energy, Mines and Petroleum
Resources Convert to Lease Submission Your Pending Submission
Number will appear All fees will be calculated You can adjust the
Hectares Page 165.
Slide 166
British Columbia Ministry of Energy, Mines and Petroleum
Resources GroupingsGroupings For each Grouping, whether 2 drilling
licences or a cluster of drilling licences, they should go together
in the same Submission, if theyre related If the Groupings are not
related, they should be in separate Submissions. Page 166.
Slide 167
British Columbia Ministry of Energy, Mines and Petroleum
Resources Groupings 2 DLs Two DLs grouped together should be
submitted as one Submission DL 1DL 2 Page 167.
Slide 168
British Columbia Ministry of Energy, Mines and Petroleum
Resources Groupings Cluster (all within 4 km of each other) DL 1 DL
3 DL 4 DL 5 DL 6 DL 2 Multiple DL groupings that have a DL that is
used more than once should be submitted as one Submission Page
168.
Slide 169
British Columbia Ministry of Energy, Mines and Petroleum
Resources Continuing your Tenure Continuation/Extension (Managing
Expiring Titles Screen) NO Paper Application Required Types of
Payments Final YearPrimary Term10 year - When applying for Section
62 58 A, B and 61.1 (repeat only) 62 (1, 2, 3) Drilling Licence
Extension 3.5 Submission (All Titles Screen) Paper Application
Required Types of Payments Final YearPrimary Term-5 year 58A &
B 1 st year 58Ano longer eligiblecontinue under other section 58C
& D, 61 DL extension 3(5.1) Environmental 1 st year DL
extension 3(5.3) Coalbed Methane 1 st year Lease Selections
(conversion) Page 169.
Slide 170
British Columbia Ministry of Energy, Mines and Petroleum
Resources RECAPRECAP Continuation/Extension Submission Create from:
Manage Expiring Titles ConversionSubmission Create from: All Titles
Include Submission Number on Written Application Page 170.
Slide 171
British Columbia Ministry of Energy, Mines and Petroleum
Resources Managing Rental Deadlines Default Notices eliminated July
1, 2010 Manage titles from the All Titles screen Epayments sends
you a monthly reminder to view your statements Overdue titles are
shown in purple and fall off ePayments on day 60 past expiry Page
171.
Slide 172
British Columbia Ministry of Energy, Mines and Petroleum
Resources Late Penalties Late penalties are automatically
calculated once the anniversary date has passed Permits (Manual
Payment) Day 1-10 $100.00 Day 11-60 $500.00 Leases Day 1-30 - 1.5 %
Day 31-60 3.0 % Drilling Licence Day 1-60 $500.00 Page 172.
Slide 173
British Columbia Ministry of Energy, Mines and Petroleum
Resources CancellationsCancellations Request from All Titles screen
Ministry will cancel 60 days after anniversary date and send
confirmation Check title to be cancelled Can be reversed by
selecting title and hitting Cancel Request Email ministry to
confirm reversal Manual letters for titles not included in
ePayments Page 173.
Slide 174
British Columbia Ministry of Energy, Mines and Petroleum
Resources Letters of Authority Letter of Authorizations are needed
when you are neither a owner or payor Required for Titles not
covered by ePayments The registered Owners intent is implied by
authorizing the Designated Payor to make decisions on the title
Page 174.
Slide 175
British Columbia Ministry of Energy, Mines and Petroleum
Resources Self-Tutoring Online: Modular Self-paced Computer-based
Getting Started, Self-Tutoring, FAQs & Quick Reference Tool
available online -
http://www.empr.gov.bc.ca/Titles/OGTitles/ePayments/Pages/default.aspx
Calgarycontact CAPLA: www.caplacanada.org Victoria - contact:
[email protected] Training Information Page 175.
Slide 176
British Columbia Ministry of Energy, Mines and Petroleum
Resources Transfers, Encumbrances and Related Transfers,
Encumbrances and Related Page 176.
Slide 177
British Columbia Ministry of Energy, Mines and Petroleum
Resources Power-of-AttorneyPower-of-Attorney No fees required Cover
letter is required Power of Attorney documents should have original
signatures or be a Certified True Copy The document must clearly
state the types of document that the person/position is authorized
to sign on behalf of the company A registration number will be
assigned to the company upon the initial registration, this number
will be used for all future registrations Page 177.
Slide 178
British Columbia Ministry of Energy, Mines and Petroleum
Resources Partnerships Permitted to hold title in BC Partnership
needs to provide documentation showing the partnership structure
Documentation must be signed by all parties of the partnership
Contact Oil & Gas Commission to confirm requirements to licence
well Page 178.
Slide 179
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 179. Title Transfers No fees required Cover letter
must accompany documents Transfers are considered effective from
the date received, not the execution date Stale-dated transfers are
acceptable Changes are recorded against title specified in the
document Only transfers of undivided interest are permissible
Signatures in counterpart are acceptable Any color ink acceptable
for signatures Electronic Signatures and signature stamps are not
acceptable Page 179.
Slide 180
British Columbia Ministry of Energy, Mines and Petroleum
Resources Title Transfers Transfer documents must: Be originals
List all title numbers to be transferred Be executed by all
transferors and all transferees Subsequent edits must be initialled
by all parties A properly executed document is: Dated, and Signed
by a signing officer of the firm or by a person with a Power of
Attorney registered with Titles, Aboriginal and Corporate Relations
Division, and Witnessed or affixed with a corporate seal Page
180.
Slide 181
British Columbia Ministry of Energy, Mines and Petroleum
Resources Title Transfers Schedules are permitted and should
include only the title number and the company reference number
Transfer documents must specify interest as a percentage of the
undivided interest 8 decimal places (max) Interests displayed as
percentages of percentages are not acceptable: Interest amounts are
not required on transfer of all a companies interest in a title
Page 181.
Slide 182
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 182. Title Transfers Sample forms available from the
Division website, no prescribed form necessary Information Letter
EMD-008 Must not contain implied or explicit encumbrances, eg:
subject to clause Do not send title documents with your transfer
request Use full legal name of companies If legal descriptions must
be included for corporate reasons, they: Must be identical to
registered legal description Must include complete tract rights
Page 182.
Slide 183
British Columbia Ministry of Energy, Mines and Petroleum
Resources Split Transfers A procedure to divide one lease into two
or more leases Leases only $500.00 fee for each new lease to be
issued Leases may be divided by: Surface hectares Stratigraphic A
combination of both Page 183.
Slide 184
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 184. Split Transfers All criteria applicable to
simple transfers are applicable to split transfers, plus: in and to
a portion of. must be used on the transfer documents Legal
descriptions of the transferred portion, including the rights held
by that portion, must be specified Must not divide gas spacing
areas containing gas wells May divide gas spacing areas if:
Contains an oil well; or Spacing area already split Page 184.
Slide 185
British Columbia Ministry of Energy, Mines and Petroleum
Resources Pooling Agreements Purpose joint development of a spacing
area Recorded in the Oil and Gas Titles Branch Letter contents:
Name all title holders Title numbers Well authorization No. UWI of
well Date of Pooling Agreement Signature of all title holders Page
185.
Slide 186
British Columbia Ministry of Energy, Mines and Petroleum
Resources EncumbrancesEncumbrances Information Letter EMD02-01 A
claim or lien placed on a title by a third-party NOT a legal
registry; information purposes only Encumbrances do not restrict
the application of any provision of the Petroleum and Natural Gas
Act Examples of types of documents: Bank Act assignment Deed of
Trust Debenture Mortgage Builders Lien Page 186.
Slide 187
British Columbia Ministry of Energy, Mines and Petroleum
Resources Recording Encumbrances Requests must include: Letter of
instruction and fee State the type of encumbrance State the full
legal names of the companies involved Encumbrance document Original
or certified true copy Document must be dated and signed by a
signing officer of the company holding the encumbrance Fee: $50.00
per title per encumbrance, includes discharge Page 187.
Slide 188
British Columbia Ministry of Energy, Mines and Petroleum
Resources Discharging Encumbrances Requests must: Be dated and
signed by a signing officer of the company holding the encumbrance
Include original encumbrance registration numbers State the type of
encumbrance State full legal names of the companies named in the
encumbrance Include the date of the original encumbrance
registration Include the date of the encumbrance Indicate if the
discharge is full or partial List only active title numbers to be
discharged Original signatures or certified true copy Each
encumbrance must be discharged with a separate document Page
188.
Slide 189
British Columbia Ministry of Energy, Mines and Petroleum
Resources Copies of Encumbrances Requests for copies of
encumbrances can be sent by fax Fax: (250) 952-0331 Send to
Attention of : Diane Jensen Fees minimum charge of $10.00, or.75
cents per page whichever is greater, an invoice will be sent with
the documents We copy the first 10 pages of the documents and the
signature page only, due to the size of some encumbrance documents
Return by fax or email up to 50 pages, by collect courier or mail
include your courier name and account number with your request Page
189.
Slide 190
British Columbia Ministry of Energy, Mines and Petroleum
Resources Name Changes & Amalgamations Requests must include:
May be sent by mail, fax or email Letter or email request Copy of
certificate and articles of amendment, photocopies are acceptable
Email: [email protected] Changes are only recorded
against active title All federal and provincial certificates are
accepted where: Jurisdiction and registration numbers are included
Full legal names of the parties are used Page 190.
Slide 191
British Columbia Ministry of Energy, Mines and Petroleum
Resources Signed Title Searches Available if required Send request
via fax or mail to Diane Jensen Results can be delivered by: Fax or
email up to 50 pages Mail Courier (sent collect) Fees $7.50 per
title number Invoice will be returned with request Page 191.
Slide 192
British Columbia Ministry of Energy, Mines and Petroleum
Resources PTS Web Search www.ptonline.gov.bc.ca Title number and
type Term and Area Key Dates: Issuance, Effective, Expiry Tracts
Lands and Rights held Ownership Continuation History Transfer
History Encumbrance History Special Projects, Wells, Units,
Groupings Page 192.
Slide 193
British Columbia Ministry of Energy, Mines and Petroleum
Resources Page 193. THANK YOU ! Laurel Nash 952-0335 Christine
McCarthy Terry Branscombe 952-0341952-0340 GENERAL INQUIRIES Phone.
250-952-0333 Phone. 250-952-0333 Email. [email protected]