CAPL weLCoMeS The 2014 BoArd of direCTorS

36 Pages·2014·7.5 MB·English

NEGOTIATOR
THE

The Magazine of the Canadian Association of Petroleum Landmen
September 2014
CAPL weLCoMeS
The 2014 BoArd
of direCT orS
Terminating a Freehold
CAPL Merit Awards
Oil & Gas Lease CAPL 2014 Freehold Lease
Honouring Exceptional CAPL
Difficult to Terminate Non-Producing New Changes to CAPL Lease Form
Members & Individuals
Leases in Summary Judgment
Your energy partner
Building on over 20 years of recognized oil and
gas leadership and valued relationships with
CAPL, McMillan continues to be your trusted and
experienced energy counsel.
For information on the services McMillan’s Energy Group can provide,
please visit our website or contact Michael Thackray, QC.
Michael A. Thackray, QC
e: [email protected]
t: 403.531.4710
NEGOTIATOR
THE
NEGOTIATOR
The Magazine of the Canadian Association
of Petroleum Landmen THE
Senior Editorial Board
Director of Communications
Brad Reynolds [ph] 403-215-9159
Advertising Editors
Kevin Young [ph] 403-724-4450
Colin Taylor [ph] 403-355-8359
Coordinating Editor
Krissy Rennie [ph] 403-663-2595
Feature Content Editor
Mark Innes [ph] 403-818-7561
Regular Content Editor
Anne Macedo [ph] 403-699-6451
Social Content Editor Features
Jason Peacock [ph] 403-691-7077 September 2014
Editorial Committee
Dave Lewis [ph] 403-968-2673
Amy Kalmbach [ph] 403-619-2868 2 D ifficulty in Obtaining Summary
Nathan Roberts [ph] 403-268-3006
Dinora Santos [ph] 403-470-1558
Judgment to Terminate a Freehold
Design and Production
Rachel Hershfield, Folio Creations
Printing Oil and Gas Lease
McAra Printing
Submissions Wilson McCutchan
For information regarding submission of articles, please
contact a member of our Senior Editorial Board.
Disclaimer 6 2013 CAPL Merit Awards
All articles printed under an author’s name represent the
views of the author; publication neither implies approval of
the opinions expressed, nor accuracy of the facts stated. Larry Buzan, P.Land
Advertising
For information, please contact Colin Taylor (403-777-3347)
or Kevin Young (403-724-4450). No endorsement or 10 C APL 2014 Freehold Lease
sponsorship by the Canadian Association of Petroleum
Landmen is suggested or implied.
The contents of this publication may not be reproduced either R.K. Howard, P.Land
in part or in full without the consent of the publisher.
In Every Issue
14 The Negotiator’s Message From the Board: President
2014–2015 CAPL Board of Directors
President
Michelle Radomski 16 Get Smart
Vice-President
Nikki Sitch, P.Land, PSL 19 Board Briefs
Director, Business Development
Alberta & British Columbia
Andrew Weldon 25 Roster Updates
Director, Business Development
Saskatchewan & Alberta Oilsands 28 The Negotiator’s Message From the Board: Past Vice-President
Michelle Creguer
Director, Communications
Brad Reynolds, P.Land 31 The Social Calendar
Director, Education
Connie De Ciancio 32 CAPL Calendar of Events
Director, Field Acquisition & Management
Paul Mandry, PSL
Director, Finance 32 October Meeting
Larry Buzan, P.Land
Director, Member Services
Kent Gibson
Director, Professionalism Also
Joanna Shea in this issue
Director, Public Relations
Gary Richardson, PSL
Director, Technology 12 Q2 M&A Report by ATB
Mandy Cookson
Secretary/Director, Social 13 Oktoberfest Charity Land Social
Andrew Webb
Past President
John Covey 18 PLUS Update
Readers may obtain any Director’s contact 21 PLUS 2013-2014 Graduating Class
information from the CAPL office.

Suite 350, 500 – 5 Avenue S.W. Calgary, Alberta T2P 3L5 27 In Memoriam
[ph] 403-237-6635 [fax] 403-263-1620
www.landman.ca 27 CAPL 2014 Dust Up
Kaitlin Polowski [email protected]
Denise Grieve [email protected] 30 2014 CAPL Conference
Irene Krickhan [email protected]
Karin Steers [email protected]
Difficulty in Obtaining
Summary Judgment to
Terminate a Freehold
Oil and Gas Lease
4 It may now be harder for lessors There were two periods of non-production that
1
0
R 2 In alberta to summarIly termI- indisputably lasted for more than 90 days. Even
E
MB nate non-producIng leases. In P. Burns still, the Court of Appeal would not affirm termi-
E
T
EP Resources Limited v. Locke, Stock & Barrel Company nation of the lease. The Court of Appeal held that
S
R / Ltd., 2014 ABCA 40, the Alberta Court of Appeal it was unclear whether Locke, Stock & Barrel took wrItten by
O
TIAT overturned a summary judgment ruling against the steps in those periods that accorded with “good WILSON MCCuTCHAN
O
EG non-producing lessee, Locke, Stock & Barrel. oilfield practice” and whether these steps were mcmIllan llp
N
E
H 2
T
“aimed at the production of oil”. The Court of Appeal held this the prior decisions
was an issue that ought to be determined at trial. Accordingly, Summary judgment was granted against the Locke, Stock &
it set aside the summary judgment terminating Locke, Stock & Barrel in Masters Chambers. The Master held that the lease had
Barrel’s lease. expired according to its terms due to lack of production and
working operations. Because there had been no production or
Habendum clauses working operations for more than 90 days (on two separate occa-
The decision in Locke, Stock & Barrel – at all levels of court – hinged sions, no less), the Master held that the lease terminated and
on the lease’s habendum clause. there was no chance that Locke, Stock & Barrel could successfully
In oil and gas law, the habendum clause has been called “the claim otherwise.
heart of the lease.”1 Amongst other things, it sets out the terms on Locke, Stock & Barrel then proceeded to a de novo appeal before
which the lease may be extended and what happens when a well a Justice of the Court of Queen’s Bench of Alberta. It provided new
stops producing or drilling stops.2 The inclusion of the habendum evidence about what had happened during the two periods of
clause in oil and gas leases in Canada dates from the last quarter non-production. Locke, Stock & Barrel tried convincing the Court
of the nineteenth century; the wording of the clause has remained that its actions during those periods allowed it to rely on the
substantially the same since then.3 The purpose of the clause was “good oilfield practice” exception. Even still, the Justice upheld the
and remains a practical one: lessees who work hard to bring lands Master’s decision and affirmed summary judgment.
into production should not have their leases terminate while oil or The Queen’s Bench Justice held that “the failure to produce
natural gas is being produced. The habendum clause avoids the impo- was not the result of a cause outside of [Locke, Stock & Barrel]’s
sition of “a very substantial hardship on the lessee who had brought control or in accordance with good oilfield practice.”5 In other
the lands into production.”4 words, neither the “outside cause” nor the “good oilfield practice”
In essence, if there is production or working operations aimed exception applied.
at production, the lease continues beyond its primary term.
Secondary terms are, in theory, indefinite. Their length depends actions of locke, stock & barrel
on a continuation of production or working operations. Subject to To combat the Masters summary judgment, Locke, Stock & Barrel
express exceptions to the rule, the secondary term of a freehold submitted evidence before the Queen’s Bench Justice on appeal
lease comes to an end when there is neither production nor work- that, during both periods of non-production, it took action that
ing operations for more than 90 consecutive days. was in accordance with good oilfield practice. Justice Bensler
considered the affidavit evidence of a pumper, who said that
locke, stock & barrel’s lease he had been on site every day during both periods of non-pro-
In Locke, Stock & Barrel the primary term of the lease had expired. duction. The pumper swore in his affidavit that during the first
Crucially, the habendum clause in the lease contained two excep- period in question, he contacted expert engineers about what to
tions to the 90 day termination rule. First, if the suspension of do with the pump during that time and, based on their advice,
operations resulted from “any cause whatsoever beyond the did the following:
Lessee’s reasonable control”, the lease would not terminate.
The second exception was the “good oilfield practice” exception; • Occasionally turned the pump on and off;
if the 90 day suspension of operations resulted from any cause • Used various strategies in attempting to dislodge acetate and
whatsoever “in accordance with good oil field practice”, the lease wax and bring oil to the surface;
would survive. • Poured diesel down the pump;
T
H
E
N
E
G
O
T
IA
T
O
R
/ S
E
P
T
E
M
B
E
R
2
3 01
4
• Tapped the pump; “minimal attempts that were not actively directed at the produc-
• Added fluids; and tion of oil.”6
• Pulled on the drill stem and pump.
the court of appeal
The pumper swore that during the second period of non-produc- After losing the summary judgment decision on two occasions,
tion he had done the same things as well as occasionally run the Locke, Stock & Barrel appealed to the Alberta Court of Appeal.
pumps in an effort to get oil to the surface and keep acetate and There it finally had success. The Court of Appeal overturned the
wax from accumulating. award of summary judgment.
Beyond the affidavit of the pumper, Locke, Stock & Barrel also The Court of Appeal reasoned that the Justice on the de
relied on expert affidavit evidence in trying to make out its “good novo appeal had erred by failing to put any weight whatsoever
oilfield practice” argument. The expert’s evidence centred on the on the expert’s evidence. The Court stated that “combined with
fact that the well was old and required a special kind of mainte- [the pumper’s] evidence, there is some evidence of steps being
nance to extend its life. The expert swore that the well was near taken here in accordance with good oilfield practice.”7 The Court
the end of its natural life. He stated that as wells age and enter of Appeal went on to state that “expert opinion about the types
their low productivity stages, “a prudent operator with a good of steps that constitute good oil field practice for these low
production and maintenance strategy can extend the economic producing wells at the current late stage of the well’s life is highly
life of a well by 10 or 20 years.” The expert concluded that steps, relevant.”8 The Court of Appeal concluded as follows:
similar to the ones taken by the pumper, were consistent with
“good oilfield practice”. Such steps were geared towards maintain- Considering all of the evidence, we are satisfied that [Locke,
ing production in the long term. Stock & Barrel] has met its evidentiary burden of adducing
The Queen’s Bench Justice largely if not entirely ignored the sufficient evidence to defeat summary judgment … It is
expert’s conclusions. The Queen’s Bench Justice held that in order hard to see how the chambers judge could find, in the face
to establish “working operations” a lessee must expend more of all this evidence, that there was not at least an issue as
than just minimal effort. She held that the all the various steps to whether the steps were “aimed at the production of oil”.
testified to by the pumper and approved of by the expert were It is at least a genuine issue for trial.9
Providing Professional
Land Surveying and Mapping
in Alberta and Saskatchewan.
Visit compassgeomatics.ca today!
4
1
0
2
R
E
B
M
E
T
EP The Right Direction
S
OR / 1-855-356-0111
T
A
TI
O
G
E
N
E
H 4
T
It is important to note that the Court of Appeal did not decide new summary Judgment regime
whether the lease was still alive. It merely held that the steps The implications of Locke, Stock & Barrel should be considered
taken by Locke, Stock & Barrel during non-productive periods in conjunction with those arising from the Supreme Court of
may have served to continue the lease. The Court of Appeal did Canada’s recent decision in Hryniak v. Mauldin, 2014 SCC 7, in
not conclude that the actions of the pumper were in accordance which the Court considered amendments to Ontario’s summary
with “good oilfield practice”; it merely concluded that there was judgment Rule. The Court pronounced that a “shift in culture” is
enough evidence to make that a triable issue. required in order to facilitate greater access to justice for ordinary
Canadians, who often cannot afford to engage in lengthy litiga-
potential Impact tion. The Court noted that “[t]he summary judgment motion is
Obtaining summary judgment already has a high legal hurdle in an important tool for enhancing access to justice because it can
oil and gas disputes. The Court of Appeal decision in Locke, Stock & provide a cheaper, faster alternative to a full trial.” Accordingly,
Barrel will potentially now make it even more difficult for lessors to the Court held that Ontario judges are empowered under the
obtain summary judgment against non-producing lessees. summary judgment Rule to make findings of fact where doing so
It remains to be seen whether this matter will eventually can resolve the matter and prevent a trial while also achieving a
proceed to trial. A written decision from the Court may help fair and just result.
clarify and further develop the law with respect to what consti- The Alberta Court of Appeal in Windsor v. Canadian Pacific Railway
tutes “good oilfield practice”, at least so far as that term – or Ltd., 2014 ABCA 108 held that the principles enunciated in Hryniak
one like it – is used in habendum clauses. In dissenting reasons have application in Alberta. There are therefore new, attendant
provided in Kensington Energy Ltd. v. B & G Energy Ltd., 2008 ABCA risks to making summary judgment applications in Alberta. The
151, Justice Romaine of the Alberta Court of Appeal held that the Court of Queen’s Bench may decide that a fair and just determina-
trial judge had employed too strict a definition of what might tion on the merits can be reached within the summary judgment
constitute good oilfield practice. The well had been shut in and application. It may then engage in a fact-finding exercise, one
the trial judge held that the freehold lease had therefore expired. which an applicant did not envision when bringing its motion.
He declined to hear expert evidence on whether the good oilfield Theoretically a motions Court could determine that a period of
practice exception could apply to the shutting in of a dry well. non-production did indeed result from a cause in accordance with
Justice Romaine held that such refusal was in error. The shutting “good oilfield practice”, and rule in favour of the non-producing
in of a well, she stated, could be caught under the good oilfield lessee. Of course, it is possible the Court could also determine the
practice exception. She stated that a non-producing freehold issue the other way, and rule in favour of the lessor.
lease could be continued for reasons other than matters beyond
the lessee’s control. The majority opinion in Kensington Energy conclusion
did not deal with what actions might or might not be caught Given the potentially large breadth of the “good oilfield practice”
under the good oilfield practice exception; it granted the appeal exception, summary judgment to terminate freehold oil and gas
for different reasons. If there were a trend to be gleaned, however, leases may now be harder to obtain in Alberta. Further, lessors
from the overturning of summary judgment in Locke, Stock & Barrel must now also account for the possibility that the Court, on a
and Justice Romaine’s dissenting opinion in Kensington Energy, motion for summary judgment, may proceed to determine the
it could only be towards a more expansive definition of “good entirety of an action on its merits. m
oilfield practice”.
A trial decision in Locke, Stock & Barrel could also expand notes
the definition of the term “working operations” or “operations 1. John Bishop Ballem, The Oil and Gas Lease in Canada, 4th ed.
aimed at the production of oil”. In Montreal Trust Co. v. Williston (Toronto: University of Toronto Press, 2008), p. 127
Wildcatters Corp., 2002 SKCA 91, the Saskatchewan Court of Appeal 2. Ibid.
upheld a trial decision which concluded that well maintenance 3. Ibid., p. 8
was not sufficient to constitute “working operations” necessary to 4. Ibid., p. 7
keep the lease alive. The actions of Locke, Stock & Barrel during 5. P. Burns Resources Ltd. v. Locke, Stock & Barrel Co., 2013 ABQB 129
the lulls in production could certainly be argued by the lessor at para. 25 T
H
E
to be nothing more than well maintenance. If the Alberta Court 6. Ibid. at para. 39 N
E
G
of Queen’s Bench deems such actions to have been operations 7. P. Burns Resources Ltd. v. Locke, Stock & Barrel Co., 2014 ABCA 40 O
T
IA
“aimed at the production of oil”, that term would acquire a more at para. 22 T
O
R
liberal definition. 8. Ibid. at para. 23 / S
E
P
9. Ibid. at para. 25 T
E
M
10. Hryniak v. Mauldin, 2014 SCC 7 at para. 34 BE
R
2
5 01
4
2013 CAPL
All her deadlines were met and Crystal took initiative in every
respect. Great to work with and a joy to watch her results –
Crystal is worthy of this award as she exemplifies all of the traits
Merit Awards
commensurate with this award – dedication, reliability, leadership,
effectiveness as a team player.
on thursday, may 15, 2014, the 2013 capl merIt Gary Richardson. Gary has been THE reason that the 30 member
awards were presented to very deservIng FAM Committee members are engaged with each other. Countless
capl members and IndIvIduals to those who made hours on the phone and on the computer writing to regulators,
exceptional contributions through their volunteer efforts, dedica- Gary has been our voice to the worker bees of the governments.
tion, enthusiasm and hard work in 2013. Each one had contributed Gary never passes on a job he can do himself; never misses a
towards the success of CAPL during 2013 and we believe will meeting without cause; always the consummate professional.
impact the Association for the years ahead. Gary as FAM Chairperson is a much deserving award recipient.
On behalf of the Merit Awards Committee and the newly
elected CAPL Board of Directors, we want to wish hearty congrat- the bright lights award
ulations to each of the following Award recipients: 2013 Award Recipients
Micheal Myers
the capl awards of merit Richard Forrester
2013 Award Recipients:
Bonnie Cioni CML
Gary Richardson PSL
Crystal Pomedli
Richard Forrester (Subcategory: Minerals). Huge hours working on the
Bonnie Cioni. An ‘unsung hero’ of the CAPL Education Committee, 2013 Dustup, the 2013 Conference and the PLM Alumni Golf Tourney,
Bonnie has been our material coordinator since 2006, working Richard is in a word “active” inside CAPL. He has and continues to
with all levels of Committee management and the CAPL staff coor- make positive contributions to CAPL. Well deserved Richard!
dinating the Education material and it is likely she of all the folks
on the Committee devotes the most time there. Long overdue we Micheal Myers (Subcategory: Surface). Again, huge hours on the
are so pleased to see Bonnie given this award. Education Committee and never missed a meeting. Micheal coordi-
4 nated four separate surface courses while most volunteers handled
1
0
R 2 Crystal Pomedli. Crystal served as the Administration Co-Chair two. Additionally Micheal found instructors for two of his four courses
E
B
M on the 2013 Conference. ‘Administration’ says it all – and Crystal for the CAPL! Amazing. Every course is introduced by Micheal and the
E
T
EP handled a huge share of the details for CAPL. Hundreds of attendees all feel welcome and ready to go. We are very pleased to
S
R / hours and thousands of details go into every CAPL Conference. give this award to Micheal.
O
T
A
TI
O
G
E
N
E
H 6
T
the outstanding graduate award the lifetime membership award
2013 Award Recipient: Will Glass 2013 Award Recipient: Carolyn Murphy, P.Land
Carolyn Murphy. Awarded only to past recipients of the Herb
Hughes Award or to past CAPL Presidents with over 25 years’
membership in CAPL, Carolyn’s 2013 award has “life membership”
written all over it. As the CAPL Hotel committee member liaison
Will Glass (Subcategory: Institution, Mount Royal Petroleum Land – from the staging, menu and CAPL Board of Director placements,
Business Program). Will is a valuable member of the Education to working with Sue at the Westin, to sorting out all the hotel &
Committee, the CAPL Ski Trip, and – note this – he allowed his staff details, making sure all of us are always welcome there and
name to stand to run for CAPL office in 2012. Will continuously ensuring all of this occurs within the budget boundaries, Carolyn
demonstrates leadership among his peers and has created value is the one we can depend on and have depended on since before
in his volunteer portfolios. Will – congratulations! her presidency in 2002 and as we have seen – for years afterwards.
Since 1981 the HURLAND team has
been providing comprehensive
services in all aspects of Surface
Land Acquisition, Administration,
LAND ACQUISITIONS
FIRST NATIONS CONSULTATION
PROJECT MANAGEMENT
T
AER CROWN APPLICATIONS H
E
SHERWOOD PARK 1.888.321.2222 N
ANNUAL COMPENSATION REVIEWS E
G
O
DAMAGE SETTLEMENTS T
[email protected] IA
T
PUBLIC CONSULTATIONS & O
www.hurland.com R
NOTIFICATIONS / S
E
P
T
E
M
B
E
R
2
7 01
4
2013 pin recipients
In addition to the Awards presentation, the CAPL also hosted a separate function to honour 128 long term members of the Association.
A special tribute was made to Ned (Edward) Gilbert as the first member to receive a 65-year PIN and accompanied by his son, Ned was
recognized for his personal tremendous efforts to secure and develop the oilsands. We heartily congratulate all the 2013 Pin recipients:
65 years – 1 member 40 years – 6 members Janice Langley David Barlass Nance McCollom
Ned Gilbert Michael Geldert Dave Lewis Brian Birchall John Parry
David Kiddle Tim Martin Bob Clark Norman Parsons
60 years – 2 members Bill Oliver Brenda Mayder Sandra Craig Al Pickering
John Gareau Otto Paulgaard Denis McGrath Clark Drader Phil Prefontaine
Roy Gillespie Ron Reid Al Murray Sandra Drinnan Thomas Rafter
Hart Schneider Brian Murray Ken Dryden Terry Raymond
55 years – 3 members Scott Nalder Dennis Eisner Glen Sveinson
Peter Abt 35 years – 32 members John Norman Darryl Erickson James Thomson
Des Barton Rick Braund Stan Nykiel Bob Funnell Ken Truscott
Dick Moore Bob Breckon Colin Ogilvy Wayne Geddes Don Umbach
Ken Cruikshank Kevin Orriss Richard Grant Murray Wade
50 years – 1 member Gerry Donaldson Larry Parks Wayne Haaland Brian Williams
Bernie Wylie Harry Higgins George Paulus Ray Heptonstall Peter Wolf
Douglas Hilland Dan Slattery David Holmes shane Wylie
45 years – 5 members Steve Irish Jeff Standen Andrew Hyslop
Gary Aitken Rex Kary Peter Sticksl Ron Jenkins 25 years – 38 members
Don Finlay Doug Kay Greg Strachan Edward Kalthoff Brian Bass
Harry Gabel Daniel Kell James Taylor Donald Klimosko Ruth Bennett
Ray Maguire Bill Kiff Michael Lambros David Bernatchez
Ken Murphy David Kinton 30 years – 40 members Lynn Lehr Marilyn Brenneis
Ed Kozbial Guy Anderson Dave MacKay Elizabeth Burke-Gaffney
Don Austin Raymond Masniuk David Cassidy
4
1
0
2
R
E
MB LANLLDAAGNNRDDOGGURRPOOUUPP maimml@aatiillr@@avttrreaarvvseeelrrassneeldlaagnnrddoggurrpoo.ucuoppm..ccoo mm wwwwwww.trwwa..vttrreaarvvseeelrrassneeldlaagnnrddoggurrpoo .ucuoppm . .ccoomm
E
T
P
SE CalgCCaaarllygg a|a 2rryy6 0|| ,22 6668001,, 566 88811 S55t .88 N SSEtt,.. CNNaEEl,,g CCaaaryllgg, aaArrByy ,, TAA2BBE TT722HEE7 77HH77 40344.2006335..22.1660555..110005500
OR / SedSSgeeeddwggiceekww |ii 4cckk9 1|| 144 99411811 A 44v88e .AA, Pvv.eeO...,, PBP..oOOx.. BB3oo6xx, S 33e66d,, gSSeeewddggiceekww, AiiccBkk ,, TAA0BBB TT400CBB0 44CC00 78077.3888004..33.3885446..335556655
T
TIA GranGGdrraaenn Pddreae i PPrirreaa |ii rr#iie1e 0 || 1##,11 1000114,, 111900 44 911999 A 99v99e .AA, Gvveera..,,n GGdrreaa nnPddraeei rPPierraa, iiArriiB ee,, TAA8BB V TT088SVV4 007SS844 077.5883002..55.7336223..770663300
O
G
E
N
E
H 8
T