British Columbia Ministry of Natural Gas Development October 22, 2013 BC Petroleum and Natural Gas Regulations Seminar Presentation to CAPL October 22, 2013 Geoff Turner Terry Branscombe Page 1. Page 1.
Apr 01, 2015
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
BC Petroleum and Natural Gas Regulations SeminarPresentation to CAPL
October 22, 2013
BC Petroleum and Natural Gas Regulations SeminarPresentation to CAPL
October 22, 2013Geoff Turner
Terry Branscombe
Page 1.Page 1.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
PART 1 – MINISTRY UPDATES
Ministry Structure / Organization Update
Acquiring Petroleum and Natural Gas (PNG) Tenure in BC
Resource Development Updates
Tenure Management Updates
Royalty Program Update
Policy and Regulatory Updates
Jobs and the Economy
Page 2.
SEMINAR OUTLINESEMINAR OUTLINE
Page 2.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
PART 2 – TENURE MANAGEMENT
Resources for administrators
General framework for tenureLand systems
Spacing
Rentals
Geological zones in BC
TenuresPermits (Features)
Drilling Licences (Features, Extensions, Earnings, Groupings)
Leases (Features, Continuation Options, Land Plats)
Page 3.
SEMINAR OUTLINESEMINAR OUTLINE
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
PART 3 – GENERAL ADMINISTRATION
e-PaymentsTraining Resources
Payment Types and when to use them
Tenure Cancellation
Letters of Authority
Instruments Affecting TitleTransfers (assignments)
Encumbrances
Pooling Agreements
Name Changes/Amalgamation
Page 4.
SEMINAR OUTLINESEMINAR OUTLINE
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Garth Thoroughgood, Executive Director, Tenure and Geoscience Branch 250-952-6382
POSTINGS, PETROLEUM TITLES ONLINE, WEBMASTER, MAPPINGElle Bardol, Manager, Crown Sale and GIS Services 250-952-0344
PRE-TENURE REFERRALS, TENURE CAVEATSMatt Austin, Director, Resource Development 250-787-3426
GEOLOGY, ZONE DESIGNATIONDave Richardson, Manager, Geology 250-952-0359
LEGISLATION AND POLICY DEVELOPMENTGeoff Turner, Director, Policy & Planning 250-952-0709DRILLING LICENCES, WORK PROGRAMS, PERMITSTerry Branscombe, Senior Tenure Management Advisor 250-952-0340
DRILLING LICENCES, LEASE CONTINUATIONSCindy Kocol, Tenure Management Advisor 250-952-0342
DRILLING LICENCES, TRANSFERS, ENCUMBRANCES, LEASE CONTINUATIONS,CANCELLATIONSChristine McCarthy, Tenure Management Advisor 250-952-0341
E-PAYMENTS, BCeID, PRE-AUTHORIZED DEBITSCarolyn Desjardins, Manager, Revenue Collection, Reconciliation and Reporting 250-356-1059
GENERAL INQUIRIES 250-952-0333www.empr.gov.bc.ca/Titles/OGTitles [email protected]
Page 5.
KEY CONTACTSKEY CONTACTS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
MINISTRY STRUCTUREMINISTRY STRUCTURE
Page 6.
Deputy MinisterMinistry of
Natural Gas Development
Assistant Deputy MinisterLiquefied Natural Gas Initiatives
Assistant Deputy MinisterUpstream Development Division
Assistant Deputy MinisterOil and Strategic Initiatives
Division
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
UPSTREAM DEVELOPMENT DIVISIONUPSTREAM DEVELOPMENT DIVISION
Page 7.
Assistant Deputy MinisterUpstream
Development Division
Policy and Royalty Branch
Tenure and Geoscience Branch
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 8.
TENURE AND GEOSCIENCE BRANCHTENURE AND GEOSCIENCE BRANCH
Garth ThoroughgoodExecutive Director
Tenure and Geoscience Branch
Terry Branscombe
Senior Tenure Management
Advisor
Debbie FischerDirectorTenure & Revenue
Management
Matt AustinDirectorResource
Development
Dave Richardson
ManagerGeology
Elle BardolManager
Crown Sale & GIS Services
Geoff TurnerDirectorPolicy & Planning
Fil FerriDirector
Petroleum Geology
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
ACQUIRING PNG TENURE IN BCACQUIRING PNG TENURE IN BC
Page 9.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 10.
PNG TENUREPNG TENURE
Tenure does provide:exclusive rights to the subsurface resourceright to apply to the OGC for activities approval
Tenure does not provide:the authority to conduct any activities on lands (e.g., drilling)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 11.
DISPOSITION PROCESSDISPOSITION PROCESS
12 sales per year
106 day process
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Posting Requests http://www.empr.gov.bc.ca/Titles/OGTitles/SalesNotices/Pages/Instructions.aspx
Submitting a Bid
Link to Bidding and Disposition Guide
Disposition Dates for 2014-2015
http://www.empr.gov.bc.ca/Titles/OGTitles/InfoLetters/IssueDate/Pages/OGD-13-03.aspx
Page 12.
ADDITIONAL INFORMATION SOURCESADDITIONAL INFORMATION SOURCES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
First Nations Engagement
Community Engagement
Caribou
Page 13.
RESOURCE DEVELOPMENT UPDATESRESOURCE DEVELOPMENT UPDATES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Role of the CrownThe Crown has a fiduciary duty to consult First Nations about decisions which may impact their rights and, where possible, accommodate their interests.
Role of the proponentBuild and maintain good relationships with First Nations in the areas you operate.
Page 14.
FIRST NATIONS ENGAGEMENTFIRST NATIONS ENGAGEMENT
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Monthly Referral ProcessInitial Impact Assessments Responsive to First Nation comments
Deferred ParcelsMeet to resolve area-specific issues – FSJ staffExample: Old Man Lily ParcelsShapefile and PDF map of currently deferred parcels: www.empr.gov.bc.ca/Titles/OGTitles/SalesNotices/Pages/default.aspx
Strategic First Nations NegotiationsConsultation Agreements Strategic Engagement Agreements
Page 15.
FIRST NATIONS ENGAGEMENTFIRST NATIONS ENGAGEMENT
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Emerging Issues
Opportunities to build landscape level impacts/Cumulative Effects into decisions
Outcome of the Dene Tha’ Judicial Review
Page 16.
FIRST NATIONS ENGAGEMENTFIRST NATIONS ENGAGEMENT
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Referral packages and discussions on deferred parcels with local government
Landowner Notification Program
Farmers’ Advocacy Office renewed
Page 17.
COMMUNITY ENGAGEMENTCOMMUNITY ENGAGEMENT
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 18.
CARIBOUCARIBOU
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
BOREAL CARIBOU RRAsBOREAL CARIBOU RRAs
In June 2010, 500,000 hectares of boreal caribou habitat were set aside as “resource review areas” (RRAs) where no PNG tenure requests would be accepted for a minimum of five years
For more information, see Information Letter TACRD-10-10
http://www.empr.gov.bc.ca/Titles/OGTitles/InfoLetters/IssueDate/Pages/TACRD-10-10.aspx
Page 19.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Radio collaring underway funded in part by industry
New ungulate winter ranges and wildlife habitat areas designated in May 2013 (Chinchaga herd)
Establishment of operating practices to be applied to oil and gas activities within designated caribou habitat management polygons
Consultation completed with First Nations and stakeholders on the “Implementation Plan for the Ongoing Management of Boreal Caribou”
Page 20.
BOREAL CARIBOU – UPDATESBOREAL CARIBOU – UPDATES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Provincial implementation plan has been completed for Peace Northern Caribou
Established RRAs for high elevation winter ranges for Peace Northern Caribou Herds
Planning requirements have been established for activities taking place in high elevation winter ranges
Work underway to establish operating practices for low elevation habitat for the Peace Northern Caribou
Page 21.
PEACE NORTHERN CARIBOUPEACE NORTHERN CARIBOU
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
TENURE MANAGEMENT UPDATESTENURE MANAGEMENT UPDATES
Page 22.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Integrated Petroleum System (iPS)
iPS will transition 3 legacy applications to current technology
Petroleum Titles System (PTS)
Petroleum Accounts Receivable System (PARS)
Sales Parcel System (SPS)
Launch has been postponed to make minor changes and fixes
eBidding will be offered once industry consultation has taken place (expected in the new calendar year)
Page 23.
eBUSINESSeBUSINESS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
ROYALTY PROGRAMSROYALTY PROGRAMS
Page 24.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 25.
TARGETED ROYALTY PROGRAMSTARGETED ROYALTY PROGRAMS
Challenge Solution
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
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
These programs can be combined in many cases, thus providing enough margin to move certain projects to economic territoryExample - a well that:
is a road project (an infrastructure credit), is deep, and is marginal
can receive all the associated benefits for those programsMore information:
www.empr.gov.bc.ca/OG/oilandgas/royalties/Pages/default.aspx
Page 26.
TARGETED ROYALTY PROGRAMS TARGETED ROYALTY PROGRAMS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Changes Announced as Part of Budget 2013Deep Well Credit – minimum 3% royalty payableSummer Drilling Credit Program cancelledMore information: www.sbr.gov.bc.ca/business/Natural_Resources/Oil_and_gas_royalties/bulletins.htm
2013 Infrastructure Royalty Credit Program$115.8 million in royalty credits supporting 12 new infrastructure projects in northeast BC, which will help the advancement of an LNG industryThe 2013 credits are expected to generate about $445 million in revenues for the province and over $320 million in new capital spending by industry
Page 27.
ROYALTY PROGRAMS UPDATEROYALTY PROGRAMS UPDATE
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
POLICY & REGULATORY UPDATESPOLICY & REGULATORY UPDATES
Page 28.
BC Tenure Working Group
Review of the PNG Act & Regulations
New Policy Guides
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
The BC Tenure Working Group continues to meet regularly to discuss:
Improved communication
Legislation and Regulations
Opportunities to work more efficiently and effectively
Educational opportunities
eBusiness
Recent meetings included discussions about:Posting and bidding processes
Foundational concepts for tenure reform
Tenure terms and continuation
Page 29.
BC TENURE WORKING GROUPBC TENURE WORKING GROUP
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Comments received in response to the Discussion Paper on the tenure provisions helped inform analysis and recommendations
Proposed changes are intended to modernize the Act, streamline tenure administration and improve management of unconventional resource development within the tenure system
In March 2012 the Ministry issued a report on progress for tenure holders regarding potential changes
Consultations with industry, First Nations and other government agencies continued in 2012
Page 30.
REVIEW OF THE PNG ACT & REGULATIONSREVIEW OF THE PNG ACT & REGULATIONS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Feedback on the proposed changes from the Tenure Reform Task Group informed further analysis and consultation with the BC Tenure Working Group
In addition to reviewing the tenure provisions, the Ministry is working on a framework for the management of carbon capture and storage
The Ministry is awaiting a decision on if and when changes will be made
Ongoing consultation and analysis regarding some details that would be introduced through the regulations
Page 31.
REVIEW OF THE PNG ACT & REGULATIONSREVIEW OF THE PNG ACT & REGULATIONS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Policy guides will replace info letters as the main source of detailed information on BC tenure policy and legislation
Guides are updated each time there is a change eliminating the need to refer to multiple info letters
Guides available online: www.empr.gov.bc.ca/Titles/OGTitles/OtherPublications
Info letters will still be used for announcements
Subscribers will receive notifications when a guide is issued or updated (to subscribe, send a request to [email protected])
Page 32.
NEW POLICY GUIDESNEW POLICY GUIDES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Recently issued guides:
Guidelines for Registering a Transfer of Subsurface Interest in Title
Guide to BC Petroleum and Natural Gas Act Lease Continuations
Upcoming guides include:
Guide to Bidding and Disposition of Crown Petroleum and Natural Gas Rights
Guide to the Petroleum and Natural Gas Drilling Licence Regulation
Natural Gas and Oil Tenure Rents, Fees and Penalties
Page 33.
NEW POLICY GUIDESNEW POLICY GUIDES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
JOBS & THE ECONOMYJOBS & THE ECONOMY
Page 34.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 35.
CROWN SALESCROWN SALES
2013 (to Sept)
2012 (Calendar) 2011 (Calendar)
# parcels offered 184 217 326 # parcels disposed 145 171 274 # hectares offered 105,290 169,533 243,730 # hectares disposed 83,846 136,521 191,534 Total tender bonus $157,897,419.95 $ 139,262,098.12 $ 222,682,988.67 Average price/hectare $1,883.18 $ 1,020.08 $ 1,162.63
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Ensure an effective royalty regime
Ensure Infrastructure is available to encourage investment
Amend the Petroleum and Natural Gas Act and regulations
New Jobs for BC
Engaging with First Nations and Communities
Ensuring environmental responsible development
Page 36.
NATURAL GAS STRATEGYNATURAL GAS STRATEGY
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
In September 2011, the Premier confirmed Provincial commitment to the development of LNG export capacity in BC
The announcement included commitments in four areas:
Greater emphasis on the permitting and decision making processes
Skills training and development
Investment and attraction
International marketing
Page 37.
LIQUEFIED NATURAL GAS (LNG)LIQUEFIED NATURAL GAS (LNG)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
The Premier made two trade missions to Asia to promote trade and cultivate business relationships
BC hosted Canada’s first international LNG conference in February 2013
The NEB has issued export licences to three LNG proponents and additional applications are before the NEB for review
Several proponents have come forward with proposals for LNG facilities and transportation systems
Most recently, in response to the Province’s request for expressions of interest, four proponents submitted proposals for an LNG plant and marine export terminal at Grassy Point near Prince Rupert
Page 38.
LNG UPDATELNG UPDATE
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Continue to develop and implement strategies to make PNG tenure available
Continue to create and implement progressive and innovative strategies and approaches for effective policy, legislation and regulations that support a modernized tenure issuance and management system
Continue to provide an attractive investment environment through royalty and infrastructure programs
Page 39.
PNG OPPORTUNITIESPNG OPPORTUNITIES
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
QUESTIONS?QUESTIONS?
Page 40.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 41.
PART 2
Tenure
Management
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Resource ListTenure and Geoscience Branch homepage• Legislation• Information Letters• Other Publications (Guides and reference material)• Links to:
– Petroleum Titles Online (PTO)» Submit posting requestes for Crown disposition» Online title searches
– e-Payments
DataBC/GeoBC• http://www.data.gov.bc.ca/dbc/geographic/view_and_analyze/imapbc
• Map Viewer (iMap 2.0)– Complete data warehouse of provincial GIS data– Tenure in context of other geographic and land use information
Page 42.
Tenure ManagementTenure Management
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 43.
Start HereStart Here
http://www.empr.gov.bc.ca/Titles/OGTitles
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 44.
Online Title SearchesOnline Title Searches
Getting there:
Navigate to PTO main page from the Branch homepage, or dial in: https://www.ptonline.gov.bc.ca
On PTO main page, click “PTS Web” in left sidebar
Support: [email protected]
Content:
Up-to-the minute title status and descriptions for active titlePrimary Term (years), Area (hectares), Key Dates: Issuance, Effective, ExpiryTracts – Lands and Rights heldGroupings (Drilling Licences)Ownership profileRental & Continuation HistoryTransfers and EncumbrancesSpecial Projects (OGC), Wells (UWIs), Unit Agreements
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Petroleum Titles Online (PTO)http://www.ptonline.gov.bc.ca
File posting requests
Support: [email protected]
e-Paymentshttps://epayments.gov.bc.ca
Support: [email protected]
Page 45.
Online Tools and SupportOnline Tools and Support
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Petroleum and Natural Gas ActGrid Regulation
Drilling Licence Regulation
Fee, Rental and Work Requirement Regulation
Storage Reservoir Regulation
Page 46.
Key Acts and RegulationsKey Acts and Regulations
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Dominion Land Survey (DLS)
Petroleum Grid (NTS)
Spacing Areas
Well Locations
Stratigraphy & Zones
Page 47.
Geography and GeologyGeography and Geology
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
PNG Grid Regulation Schedule 1Limited to Peace River Block
TWPs 76 - 88RGEs 13 – 26 W6M
Section size is as surveyed, not standard like Alberta
Refer to downloadable map entitled “Peace River Block Gas Spacing Units and Hectarage Map”• Location: PNG Titles Branch > Other
Publications
Page 48.
DLSDLS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
PNG Grid Regulation Schedule 3
Applies everywhere the DLS does not
Based on longitude and latitude, but customized for oil and gas management
Sub-divisions achieve oil and gas spacing areas similar in size to DLS
Unit areas defined in downloadable lookup tables• Location: PNG Titles Branch > Other
PublicationsGeothermal and coal tenures are also managed with Petroleum Grid system
Page 49.
Petroleum Grid (NTS)Petroleum Grid (NTS)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 50.
Petroleum Grid (NTS)Petroleum Grid (NTS)
8° long.
4° lat.
Well location example:d-010-A/094-H-16
Title description example:094-H-16 Blk A Unit 10
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 51.
Petroleum Grid (NTS)Petroleum Grid (NTS)
Well location example:d-010-A/094-H-16
Title description example:094-H-16 Blk A Unit 10
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 52.
1 10 1 10 1 10 1 10 1 10
91 100 91 100 91 100 91 100 91 100
X
1 10 1 10 1 10 1 10 1 10
91 100 91 100 91 100 91 100 X 91 100
1 10 1 10 1 10 1 10 1 10
91 100 91 100 91 100 91 100 91 100
D C B A
L K J
Normal Spacing – NTSNormal Spacing – NTS
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
OGAA: Drilling and Production RegulationOTN’s are an OGC approval
PNG Act – section 65.1
Generally larger than normal spacing areasSome are already declared
Peace River Block – Petroleum GridBC – YT, NWT, AB boundariesBC – USAProtected Areas
1 OTN gas spacing = 1 gas spacing for calculating earnings from Drilling Licences
Page 53.
Other-than-Normal SpacingOther-than-Normal Spacing
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 54.
OTN – Peace River BlockOTN – Peace River Block
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 55.
41
50
31
40
21
30
11
20
1
10
1
91
100
9 1
81
90
71
80
61
70
51
60
OTN – Alberta boundaryOTN – Alberta boundary
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 56.
91 100
91 100
1 10
1 10
91 100
91 100
J I L
G H E
YT / NWT
X X X X X X
X X X X X X
X X X X X X
X X X X X X
X X X
X X X
X X X
X X X
X X X
X X X
X X X
X X X X X X X X X
X X X X X X X X X
X X X X X X X X X
X X X
X X X
X X X
X X X
OTN – NWT / Yukon boundariesOTN – NWT / Yukon boundaries
Portions above 60° North
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
All tenure rentals are based on area, measured in whole hectaresPetroleum Grid (NTS) Unit
“NTS Unit Areas” (Excel workbook; download)For NWT/YT and other boundary areas, call us
Peace River Block (DLS)“Gas Spacing and Hectarage Map for the PRB” (PDF; download)• Includes size of fractional spacing's on NTS/DLS boundary• Depicts lands in other-than-normal spacing areas
Regardless of source, calculate area the sameSum individual source valuesKeep intermediate fractionsRound sum for entire title to nearest whole hectare
Page 57.
Tenure Size (hectares)Tenure Size (hectares)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Tenure Size – NTSTenure Size – NTS
Exercise; find the combined area of NTS Units 42-47 of Block E in 094-H-06
Map
94 EFGH
Group
5 to 8
Block
E F G H
Unit
41-50Page 58.
Total6 X 69.8 or 418.8
Rental Size: 419 ha.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 59.
Tenure Size – DLSTenure Size – DLS
Exercise; find the total area of the two gas spacing areas outlined at right
OTN: 19.0 + 21.4 + 39.7 + 38.0 + 66.0 + 66.0 = 250.1 ha.
Sec 8-88-25: infer 263.9
Total250.1 + 263.9 = 514.0Rental Size: 514 ha.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Well Authorization (WA)Simple 5-digit number assigned to each OGC well permitPlease use wherever possible in correspondence
Unique Well Identifier (UWI)16-digit code issued at spudExamples• DLS: 102041308617W603• NTS: 200D024H094H1604
Digit 1: DLS (1) or NTS (2)Digit 2: Always zeroDigit 3: Sequence of the well at that bottom-hole location
• Value of 1 never used
Digits 4-14: Approved (then actual) bottom-hole locationDigits 15-16: drilling or completion event sequence
• First CE gets same code as its DE
Well NameOperator(s), HZ, and surface location
Page 60.
Well IDs and LocationsWell IDs and Locations
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 61.
Zone Designation SystemZone Designation SystemZones are packages of one or more formations (marked in white on diagram)
Defined by specific intervals on specific logs of a reference well
Zone boundaries carefully selected to avoid disputes; primarily widespread markers in non-productive strata
5-digit codeDigits 1-3: Zone seriesDigits 4-5: Geographic IDCode value increases as age decreases
Available for download as a PDF wall chart
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 62.
STRATIGRAPHIC CHART
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
The Stratigraphic Chart illustrates standard geological formation names used in British Columbia
Overlaid on the Stratigraphic Chart are major horizontal intervals, lying between white lines, each containing from one to several major geological formations. These horizontal bands represent slices of rock that are used in the standard Zone Designation System. Some intermediate or alternate bands are left out for readability
Standard reference descriptions of geological intervals (“Zone Designations”) with well-chosen type wells are used to ensure consistency in the administration of rights
Page 63.
Zone Designation SystemZone Designation System
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
In a petroleum and natural gas Lease, when hydrocarbons are found in any part of a standard Zone Designation layer, then the entire layer is eligible for lease continuation
The boundaries between layers are chosen at points where geological correlations are clear. Conflicts between companies over geological correlations, rights held, and vertical pooling are eliminated
Page 64.
Zone Designation SystemZone Designation System
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
QUESTIONS?QUESTIONS?
Page 65.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Permits
Drilling Licences
Leases
Page 66.
BC’s Oil and Gas TenuresBC’s Oil and Gas Tenures
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Underground Storage LeasePNG Act sections 126 – 132
Special AgreementPNG Act section 72
Requires Order-in-Council (cabinet)
Geothermal Resources ActPermits
Leases
Page 67.
Other Tenure We ManageOther Tenure We Manage
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Permits
Page 68.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
A right to explore for oil and gas
Available only by Crown salePostings up to one NTS block accepted, with cause
One year primary term
Term renewal requires annual exploration spendingActual exploration spending or cash-in-lieu paymentRates defined in Fee, Rental and Work Req. Reg.Renewal options and work requirements vary by class
Page 69.
Permits - Main FeaturesPermits - Main Features
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Drilling Licences
Page 70.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
A right to explore for oil and gas by drilling wells
Not a right to take production (for sale); testing OK
Acquired only from Crown SalePostings: 1 – 36 gas spacing areas
Term is 3, 4, or 5 years; “Prescribed Area” (Schedule 2 of the DL Regs)
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
May convert some GSAs to Lease for production and defer any unused entitlement to later in DL term
Page 71.
DL - Main FeaturesDL - Main Features
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Section 3(5) - “Standard Extension”One year period
Available once - only at end of primary term
Pre-requisite for some other extension types
$500 fee; double rent ($7/ha)
Written application not required• Apply from e-Payments Statement; do not use Submission
• Available only up to expiry date (NO GRACE PERIOD)
Page 72.
DL - Term ExtensionsDL - Term Extensions
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Section 3(5.1) - “Special Extension”
Available after term expiry or another extension
Renewable for one year or less, by application
Approval is discretionary• Decisions will be based on policies in Information Letter TACRD-11-02
Requires:• Application submitted to the Director before expiry
• WA application filed with OGC at least 30 days before expiry
• Start of drilling is delayed by one of:
– Environmental or socio-economic study
– Public hearing
– Planning or consultation process
Application• Standard DL rental ($3.50/ha) by ePayments Submission (not Statement)
Page 73.
DL - Term ExtensionsDL - Term Extensions
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Section 3(5.3) - “Coal Bed Gas Extension”Applies only to land and rights within a coalbed gas project approved by the OGC under s.75 of OGAA
Available only after standard extension
May be used up to 5 times
Requires:• Application submitted to the Director before expiry
• Lands and zones remain subject to OGC special project
Application• Standard DL rental ($3.50/ha) by ePayments Submission (not Statement)
Page 74.
DL - Term ExtensionsDL - Term Extensions
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Sections 3(7) – “Drilling past expiry”
Available only after the “standard” extension
Term extended to the rig release date (for drilling operations)
Requires:• Drilling has reached 150m (from surface) at midnight on expiry date
• Drilling is being conducted “diligently”
– Drilling interruptions may be allowed depending on circumstances
Section 3(10): Other DLs expiring after standard extension may be extended to the same rig release date by grouping with the DL extended under 3(7).
Section 3(9): No other well may be started during extension, except in the event of mechanical failures in the first well.
Page 75.
DL - Term ExtensionsDL - Term Extensions
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Section 4.1One DL must have, in the Director’s opinion, an earning well not previously used as an earning well for grouping or selection
Any number of qualified DLs may now be grouped
To qualify, a DL must lie within 4 km. of the DL to which the grouping well is associated.• Verify using GIS measurement tools: DataBC, PTO Viewer, or
contact us for written confirmation.
Application:Submitted to Director before earliest expiry date of the DLs to be grouped.
Written authority of one titleholder of each DL to be grouped when the applicant is neither the Payor nor a titleholder of all DLs in the proposed group.
Page 76.
DL - GroupingDL - Grouping
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
QUESTIONS?QUESTIONS?
Page 78.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Awarded in terms of gas spacing areas (GSA) and “zones”GSAs awarded depends on:
Prescribed Area 1, 2, or 3• When DL spans two or more Areas, earnings are based on the
Area with the greatest earnings• Information Letter TITLES-05-03
Combined lengths of drilling events• Less any length drilled through rights held by lease that are
not necessary for the purpose of evaluating the DL
Licensee must designate one of the GSAs the earning well evaluatesA GSA may only be designated once during the life of the DL.
Page 79.
Lease EarningsLease Earnings
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Zones awarded are to the base of the deepest zone "evaluated”If the well penetrates 2 or more DLs
Licensee must nominate one to be the ‘drilled’ DLEarnings and grouping rights attach to ‘drilled’ DL only
Page 80.
Lease EarningsLease Earnings
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 81.
DL Term – Prescribed AreasDL Term – Prescribed Areas
Download from link in “Info Letters”
Info Letter TITLES-05-03
Link: “NEBC DL Boundary .pdf Map”
Primary TermMeasured Wellbore
Length (meters)Column 2
3 yearsColumn 3
4 yearsColumn 4
5 years
less than 1001
2 2 3
1 001 to 1 300 3 3 41 301 to 1 500 4 5 61 501 to 1 800 5 6 81 801 to 2 100 6 7 92 101 to 2 400 7 8 102 401 to 2 600 8 9 112 601 to 2 800 9 10 122 801 to 3 000 10 12 143 001 to 3 200 11 13 163 201 to 3 400 12 14 183 401 to 3 600 13 15 203 601 to 3 800 14 16 223 801 to 4 000 15 18 244 001 to 4 200 16 20 264 201 to 4 400 17 22 284 401 to 4 800 18 24 304 801 to 5 200 18 25 31Over 5 200 18 25 32
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Definition:3.1(1) A licensee may apply to the director to have a well designated as an earning
well for a gas spacing area if another well has not been designated as an earning well for that gas spacing area.
3.1(2) On application under subsection (1), the director may designate a well as an earning well for a gas spacing area if the well
a) is drilled in a spacing area all or part of which is in a location described in a drilling licence that is either in effect on the date of designation or ceased to be in effect not more than 60 days before the date of the designation, or is a well re-drilled in a spacing area formerly described in a permit, drilling licence or lease no longer in effect.
b) Has generated well reports and well data, as defined in section 14 of the Oil and Gas Activities Act General Regulation, B.C. Reg. 274/2010, that, in the opinion of the director, sufficiently evaluate a zone in the gas spacing area.
Page 82.
Earning WellsEarning Wells
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
A "redrilled" well refers to a “re-entered” well, so the work carried out may consist of one or more of:
deepening the existing well to evaluate one or more underlying zonescompleting a previously uncompleted interval in the wellre-completing one or more intervals in the well in a manner that provides significant new information about the formation
The total wellbore length for re-entered wells is measured from surface to the base of the new bottom-hole location or from surface to the base of the deepest new completion interval, whichever is applicable
Page 83.
Earning WellsEarning Wells
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 84.
Earning Well Scenario AEarning Well Scenario A
1
GSA 1
2
Zone A
Zone B
1st 2nd
Drilling order does not matter
Each well evaluates the same zones
One well not an earning well; choice is applicant’s
Applicant designates GSA1/ZoneA
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 85.
Earning Well Scenario BEarning Well Scenario B
1
GSA 1
2
Zone A
Zone B
Upper leg
Lower leg
1st 2nd
Drilling order does not matter
Each well drills a distinct ‘formation’, but in same zone
Applicant designates which well is the earning well
Applicant designates GSA1/ZoneA
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 86.
Earning Well Scenario CEarning Well Scenario C
1
GSA 1
2
Zone A
Zone B
Drilling order does not matter; both wells qualify as earning wells
Well #1 designates GSA/ZoneB
Well #2 designates GSA/ZoneA
1st 2nd
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 87.
Earning Well Scenario DEarning Well Scenario D
1 2
GSA 1
Zone A
Zone BGSA 2
Drilling order does not matter; both wells qualify as earning wells
Well #1 designates GSA1/ZoneA
Well #2 designates GSA2/ZoneA
1t 2nd
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 88.
Earning Well – Off DLEarning Well – Off DL
Drilling Licence Lease
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
A selected Lease may include rights down to the base of the deepest geological zone “evaluated” by the earning well
This standard is applied in a broad, exploratory sense The well must at least drill into and find significant or substantial new geological information about a zone. Typically, the information could establish that the well encountered a:
wet reservoir; or
tight reservoir; or,
hydrocarbon-bearing reservoir
Page 89.
Earning Wells – “Evaluation”Earning Wells – “Evaluation”
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Alternately, evaluation may also mean determiningThe definitive absence of a reservoir; or,
The geological character of a zone in a new area
The existing state of exploration of a zone in a particular geographic area is an important factor, for example:
If drilling takes place in a remote or wildcat exploratory area, or if little is known about the zone of interest, then smaller amounts of new information will be considered significant in the evaluation of the zone
Similarly, a zone known to have a great degree of local geological variability will require only a small amount of new significant drilling information in order to be considered evaluated
Page 90.
Earning Wells – “Evaluation”Earning Wells – “Evaluation”
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
First, e-Payments Submission; then Application Letter
Create a Conversion type of Submission
If a grouping is needed, add each DL to be grouped to the Sub
For each DL, create a row for each new Lease to be issued from that DL, with its expected area, in hectares
Application Letter must include:The e-Payments Submission number in subject line
Page 91.
Lease Selection ApplicationsLease Selection Applications
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Application Letter (continued)
Include a table with rows for each earning well, containing:• OGC Well Permit (WA)
• Rig release date (from drilling operations)
• Estimated total length of all eligible wellbore segments– Do not include lengths drilled after leaving the Drilling Licence rights
• Expected number of GSAs earned
• Name of the deepest formation “evaluated” by the well
• Designated GSA – location and zone
Desired configuration of Leases• Use legal descriptions that match formats used in the Drilling Licence
• Use separate tracts for lands of different rights
Page 92.
Lease Selection ApplicationsLease Selection Applications
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Basic restrictions on selected Leases:
Must include all spacing areas to be placed on production
Each Lease must be located entirely within one DL
Must not result in new split gas spacing areas, unless you have an oil well and want to split the gas spacing area
Options for selected Leases:
So long as leases share a common issuance date, and are selected simultaneously, earnings from two or more WAs may be combined, regardless of zones earned, or the originating DL
Page 93.
Lease ConfigurationLease Configuration
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
QUESTIONS?QUESTIONS?
Page 94.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Leases
Page 95.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
A right to explore for and produce oil and gas
Available fromCrown Sale
Converting Permits and Drilling Licences
Split from another Lease (transfer)
May be continued beyond initial primary term
Page 96.
LeasesLeases
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 97.
Leases – TermLeases – Term
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:
Term is the shorter of 5 or 10 years if Lease straddles boundary
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Several forms
Section 62
Section 61
Section 61.1
Section 58
One year, in all cases
Guides available online (“Other Publications” page)
“Guide to BC Petroleum and Natural Gas Act Lease Continuations”
"Recommended Technical Package Contents for Section 58 Applications"
Page 98.
Leases – ContinuationsLeases – Continuations
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Continuation by Penalty PaymentYear 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 ePaymentsUse 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 99.
s. 62 Continuations. 62 Continuation
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Continuation by Drilling Commitment made Before Expiry
Drill one or more wells on Lease during continuation year, evaluating at least one zone held by that Lease
Application Must be in Writing and Must be made Prior to Expiry
Available for any Lease that is expiring
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
Director may cancel Lease for non-performance
Applications made through e-Payments
The Act requires sending written application
Page 100.
s. 61 Continuations. 61 Continuation
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Continuation for Disposal Well and Planning Purposes
Continues spacing areas for existing disposal operations and spacing areas the Director believes will be required for effective future disposal, for example Coalbed Methane projects that advance across the land
Water, CO2, frac fluids, 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 101.
s. 61.1 Continuations. 61.1 Continuation
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Four types of continuation:58(3)(a): Eligible Spacing Areas
58(3)(b): Unit and Royalty Agreements
58(3)(c): Work Programs
58(3)(d): Establishment of a Well
All s.58 continuations subject to rights reversion: deep rights or zone specific (s.59)
Leases approved under two or more s.58 sub-sections will be split accordingly
Page 102.
s. 58 Continuations. 58 Continuation
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Section 58(3)(b) - “unit or royalty agreements”
Portions of Lease subject to Unit or Royalty Agreements
Once approved, continuation is by rental payment until further notice; subject to annual review under the Act
Section 58(3)(c) - “work programs”
Must be designed to delimit a pool or field of oil or natural gas
May include multiple Leases
Not intended for multi-year exploration programs, depends on circumstances (e.g., access, scope)
Section 58(3)(d) – “drilling incomplete”
The drilling 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 103.
s. 58 Continuations. 58 Continuation
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
s. 58(3)(a) – An Eligible Spacing Area is a spacing area that:
Contains a “petroleum well” or “gas well”
Is subject to an approved issued under s.75 of the Oil and Gas Activities Act by the Oil and Gas Commisssion
The Director believes is at least 50% covered by a designated land plat
The Director believes contains a pool that may be adequately drained by a well in an adjacent spacing area
Once approved, continuation is made by annual rental payment until further notice; subject to annual review under the Act
Page 104.
s. 58(3)(a) - Eligibilitys. 58(3)(a) - Eligibility
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Depicts where the Director of Petroleum Lands recognizes that a pool of natural gas or petroleum has been delimited through the exploration and development work of industry
Illustrates, in map view, the gas or oil Spacing Areas delimited in a pool, and names the geological formation in which the pool is recognized
Referred to by combining the Tenure Area (oil or gas field name), Geological Formation, Sequence Letter, and Fluid Type (oil or gas), for example:
TA49004980DG (Inga Doig Phosphate ‘D’ Gas)
Page 105.
s. 58(3)(a) – Land Platss. 58(3)(a) – Land Plats
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 106.
LAND PLATS - ExampleLAND PLATS - Example
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Lease continuation application process is simplified for Crown and industry
Expertise of geological staff can be focused on Spacing Areas not yet recognized
Freely availableData download; or,
View online (iMap tool at DataBC website)Pools are delimited by Control Points of hard and soft data:
Wells posting hard results at specific locations
2D Seismic line locations; 3D seismic survey grids
Known geological formation characteristics
Mid to long term production and pressure histories
Page 107.
s. 58(3)(a) – Land Platss. 58(3)(a) – Land Plats
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Sources of Evidence Delimiting Land Plats:Industry applications for continuation interpreting the results of drilling, seismic and well evaluation work
Ministry evaluations of drilling, log, sample, drillstem test, completion and production results, posted at the specific well locations, combined with geophysical evidence extending pools beyond well control
Analogous wells, old and new, with similar properties
Evaluations and approvals received from the OGC
Thousands of geophysical and geological interpretations on file from all Crown title holders, representing decades of information and analysis
All Analysed Spacing Area by Spacing Area
Page 108.
s. 58(3)(a) – Land Platss. 58(3)(a) – Land Plats
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Clients that only submit a land plat and no technical package with their 58(3)(a) original application, or a contingent section 58(3)(c) application, will be notified of the land plat reduction by telephone and e-mail and given one opportunity to make their case (58A or 58C) within 10 working days of that contact, regardless of how much time has elapsed after expiry.
Page 109.
s. 58(3)(a) – Land Platss. 58(3)(a) – Land Plats
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Leases are now subject to one of two types of rights reversion: zone-specific or deep rights reversion. In either case, the existing Zone Designation System will be used to administer them
What is Zone-Specific Retention (ZSR)?A ZSR-subject Lease is a PNG Lease that is a member of a chain of title originating with the purchase of a PNG title through a Crown sale held on or after March 29, 2007
ZSR is designed to return to the Province, at the end of the primary term of a subject Lease, all the zones that do not contain identified oil or natural gas depositsAll other zones will revert to the Crown unless they can be continued under other applicable sections of the Act, including sections 58(3)(c) and (d) and sections 61 and 62. These sections allow continuation based on drilling, completions, work programs, delimiting pools, and the simple payment of a penalty
Page 110.
s. 58(3)(a) – Reversions. 58(3)(a) – Reversion
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Benefits of Zone-Specific RetentionIncreased investment opportunities for industry
Earlier discovery and development of new oil and gas pools, leading to earlier revenues for both industry and the Province
If well, geophysical, geological or engineering data shows that a pool of oil or gas exists in a zone in any spacing area, then it qualifies for continuation. This consideration is independent of the status of a well
The zone may be behind pipe, and in some cases the well may be abandoned, but well information proves a pool exists.
Page 111.
s. 58(3)(a) – Reversions. 58(3)(a) – Reversion
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Standards for Zone-Specific RetentionWell information, combined with existing geological knowledge, are usually sufficient to determine whether a zone contains hydrocarbons
Modern well evaluation technologies, properly applied, are capable, in the vast majority of cases, of demonstrating the presence of hydrocarbons
Any remaining doubts should be resolved by completing the zone
Page 112.
s. 58(3)(a) – Zone Reversions. 58(3)(a) – Zone Reversion
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
iMapBC 2.0Land Plats Demo
iMapBC 2.0Land Plats Demo
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
General FeaturesMay include multiple Leases, even multiple target zones, and with different but relatively close expiry dates
Proposed work must, in the opinion of the division head, be designed to delimit one or more pools
Approved non-optional work must be fully completed during the term of the continuation.
Contingent work must be started during the term of the continuation, e.g., contingent wells must be spudded
Majority of programs are one year only; exceptions may be considered due to very limited access or an unusually complex work program
Non-performance jeopardizes future work programs
Page 114.
s. 58(3)(c)s. 58(3)(c)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Application must include a cover letter on company letterhead, and include:
A firm work commitment, e.g. “XYZ Corp. commits to carry out the following program of work: . . .”
A clear description of where the work will take place in relation to the Leases included in the application
The locations and formation names of the pools that will be delimited by the work program
Technical package contents
Must demonstrate the current state of geologic knowledge of the pools to be delimited, and how the work is likely to further delimit those pools
May include any technical material, such as public and proprietary well data, geological x-sections, isopachs, interpreted seismic, remote sensing results, and field studies
Page 115.
s. 58(3)(c)s. 58(3)(c)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Where approved programs include seismic components (new or re-evaluated), an acceptable report of the geophysical results is required at the end of the continuation year
Refer to downloadable document entitled “Requirements for Affidavits and Reports”Location: “Other Publications” page
Reports held confidential for 10 years, then deposited with thousands of similar studies
A cumulative index is published annually and available online from the same page
Page 116.
s. 58(3)(c)s. 58(3)(c)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Designed to allow leaseholders to finish drilling or “establishing” a well that is clearly in progress
More scrutiny will be applied if the well has not been spudded by expiry
If the well drilled into or will drill into multiple Leases, all Leases may be approved
All rights below the base of the deepest objective zone corresponding with the OGC well permit’s (WA) deepest “objective” formation are not included
Page 117.
s. 58(3)(d)s. 58(3)(d)
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 118.
PART 3
General
Administration
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
ePayments
Support: [email protected]
Page 119.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Accepts rents, fees, and penalty payments
Requires self-managed BCeID, electronic passport to BC Gov
Mandatory
Client must initiate payment; not an auto debit system
Key components to remember: Payors, Statements, Submissions, Receipts, Refunds, Surrenders
Issues refunds electronically, also mandatorye-Payments will not accept payments related to:
Split Transfers of PNG LeasesPNG PermitsSection 72 AgreementsUnderground Storage or Geothermal tenure
Page 120.
ePayments – OverviewePayments – Overview
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
BCeID Profile Manager
Appointments Company Administrator for each application accessed with BCeID
Company Administrator (e-Payments)
Assigns roles to other users; can perform function of any role
Users may be assigned multiple roles
Land Adminstrator
Creates and ‘opens’ submissions
Payment Administrator
Initiates payments from Statements or Open Submissions
Viewer
Read-only access
Page 121.
ePayments – User RolesePayments – User Roles
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Page 122.
Continuing your TenureContinuing your TenureStatements
• When written applications are not required
• Use one of the “Statements” screens• Primary Term• Continuation/Extension
• Leases• Section 62, or• Section 58(3)(a), 58(3)(b), or 61.1
when this would repeat the previous continuation
• Drilling Licences• Section 3(5)
Submissions
• When written applications are required or to reduce title area by partial surrender
• Use “Manage Expiring Titles” screen• Leases
• 58(3)(a),(b) – first time• 58(3)(c),(d) – each time• 61 – each time• 61.1 – first time
• Drilling Licences• Conversions to Lease• 3(5.1) – each time• 3(5.3) – each time
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Distinct from payments made from a Statement
Used when written applications are required Certain DL extension and Lease continuation types
All DL groupings and lease conversions
When requested by the Crown
An electronic “bucket” to hold a group of tenures related by their inclusion in a common application for extension, continuation, or conversion
Designed to facilitate application tracking by industry and reduce need to contact Branch staff for updates
e-Payments generates a Submission ID number; please reference it in all application correspondence
Tracking with Milestones and Communication Log
Page 123.
Submission paymentsSubmission payments
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Rental “Default Notices” were eliminated July 1, 2010Manage expiries from the All Titles screen
e-Payments sends a monthly e-mail reminder to view your statementsOverdue titles are shown in purple and fall off ePayments 61 days past expiry
Page 124.
Managing Rental DeadlinesManaging Rental Deadlines
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Late penalties are automatically calculated once the anniversary date has passedLeases
Day 1-30 - 1.5 %Day 31-60 – 3.0 %
Drilling LicenceDay 1-60 $500.00
Page 125.
Late PenaltiesLate Penalties
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Request from All Titles screen in ePaymentsMinistry will cancel 60 days after anniversary date and send confirmation
Check title to be cancelledWhile the title remains visible, the cancellation request can be reversed with the Cancel Request function button
Please use signed letters for tenure types not managed through e-Payments (may require letter of authorization from a titleholder)
CancellationsCancellations
Page 126.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Letter of Authorization’s are needed when you are neither an owner or payorRequired for Titles not covered by e-PaymentsFor e-Payments, the registered Owner’s intent is implied by authorizing the Designated Payor to make decisions on the title
Page 127.
Letters of AuthorityLetters of Authority
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Online HelpFollow link in Resources slideGetting StartedSelf-TutoringFAQsQuick Reference Tool
Page 128.
Training InformationTraining Information
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Other Instruments
Affecting Title
Page 129.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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 130.
Power-of-AttorneyPower-of-Attorney
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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
Page 131.
PartnershipsPartnerships
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
New Guide available from “Other Publications” page
Guidelines for Registering a Transfer of Subsurface Interest in Title (see Information Letter OGD-13-01)
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 132.
Title TransfersTitle Transfers
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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 133.
Title TransfersTitle Transfers
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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 134.
Title TransfersTitle Transfers
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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
Title TransfersTitle Transfers
Page 135.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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 136.
Split TransfersSplit Transfers
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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
Split TransfersSplit Transfers
Page 137.
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Purpose – joint development of a spacing area
Recorded as an ‘encumbrance’ in the titles registry (will appear online in title searches)
Letter contents:Name all title holders
Title numbers
Well authorization No.
UWI of well
Date of Pooling Agreement
Signature of all title holders
Page 138.
Pooling AgreementsPooling Agreements
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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
Builder’s Lien
Page 139.
EncumbrancesEncumbrances
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Single one-time fee:
$50.00 per title per encumbrance
Includes any partial or full discharge fees
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
Page 140.
Recording EncumbrancesRecording Encumbrances
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
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 141.
Discharging EncumbrancesDischarging Encumbrances
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Requests for copies of encumbrances can be sent by fax
Fax: (250) 952-0331
Fees – minimum charge of $10.00, or .75 cents per page whichever is greater, an invoice will be sent with the documents
We will copy only the first 6 pages of the document plus the signature page; additional pages may be accessed and copied on-site by an authorized agent.
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 142.
Copies of EncumbrancesCopies of Encumbrances
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
Requests must include:May be sent by mail, fax or email
Copy of certificate and articles of amendment
Photocopies acceptable
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 143.
Name Changes & AmalgamationsName Changes & Amalgamations
British ColumbiaMinistry of Natural Gas DevelopmentOctober 22, 2013
THANK YOUTHANK YOU
Page 144.