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British Columbia Ministry of Natural Gas Development October 22, 2013 BC Petroleum and Natural Gas Regulations Seminar Presentation to CAPL October 22,

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Presentation on theme: "British Columbia Ministry of Natural Gas Development October 22, 2013 BC Petroleum and Natural Gas Regulations Seminar Presentation to CAPL October 22,"— Presentation transcript:

1 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.

2 British Columbia Ministry of Natural Gas Development October 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 SEMINAR OUTLINESEMINAR OUTLINE

3 British Columbia Ministry of Natural Gas Development October 22, 2013 PART 2 – TENURE MANAGEMENT Resources for administrators General framework for tenure Land systems Spacing Rentals Geological zones in BC Tenures Permits (Features) Drilling Licences (Features, Extensions, Earnings, Groupings) Leases (Features, Continuation Options, Land Plats) Page 3. SEMINAR OUTLINESEMINAR OUTLINE SEMINAR OUTLINESEMINAR OUTLINE

4 British Columbia Ministry of Natural Gas Development October 22, 2013 PART 3 – GENERAL ADMINISTRATION e-Payments Training Resources Payment Types and when to use them Tenure Cancellation Letters of Authority Instruments Affecting Title Transfers (assignments) Encumbrances Pooling Agreements Name Changes/Amalgamation Page 4. SEMINAR OUTLINESEMINAR OUTLINE SEMINAR OUTLINESEMINAR OUTLINE

5 British Columbia Ministry of Natural Gas Development October 22, 2013 Garth Thoroughgood, Executive Director, Tenure and Geoscience Branch POSTINGS, PETROLEUM TITLES ONLINE, WEBMASTER, MAPPING Elle Bardol, Manager, Crown Sale and GIS Services PRE-TENURE REFERRALS, TENURE CAVEATS Matt Austin, Director, Resource Development GEOLOGY, ZONE DESIGNATION Dave Richardson, Manager, Geology LEGISLATION AND POLICY DEVELOPMENT Geoff Turner, Director, Policy & Planning DRILLING LICENCES, WORK PROGRAMS, PERMITS Terry Branscombe, Senior Tenure Management Advisor DRILLING LICENCES, LEASE CONTINUATIONS Cindy Kocol, Tenure Management Advisor DRILLING LICENCES, TRANSFERS, ENCUMBRANCES, LEASE CONTINUATIONS, CANCELLATIONS Christine McCarthy, Tenure Management Advisor E-PAYMENTS, BCeID, PRE-AUTHORIZED DEBITS Carolyn Desjardins, Manager, Revenue Collection, Reconciliation and Reporting GENERAL INQUIRIES Page 5. KEY CONTACTS

6 British Columbia Ministry of Natural Gas Development October 22, 2013 MINISTRY STRUCTURE Page 6. Deputy Minister Ministry of Natural Gas Development Assistant Deputy Minister Liquefied Natural Gas Initiatives Assistant Deputy Minister Upstream Development Division Assistant Deputy Minister Oil and Strategic Initiatives Division

7 British Columbia Ministry of Natural Gas Development October 22, 2013 UPSTREAM DEVELOPMENT DIVISION Page 7. Assistant Deputy Minister Upstream Development Division Policy and Royalty Branch Tenure and Geoscience Branch

8 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 8. TENURE AND GEOSCIENCE BRANCHTENURE AND GEOSCIENCE BRANCH TENURE AND GEOSCIENCE BRANCHTENURE AND GEOSCIENCE BRANCH Garth Thoroughgood Executive Director Tenure and Geoscience Branch Terry Branscombe Senior Tenure Management Advisor Debbie Fischer Director Tenure & Revenue Management Matt Austin Director Resource Development Dave Richardson Manager Geology Elle Bardol Manager Crown Sale & GIS Services Geoff Turner Director Policy & Planning Fil Ferri Director Petroleum Geology

9 British Columbia Ministry of Natural Gas Development October 22, 2013 ACQUIRING PNG TENURE IN BC Page 9.

10 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 10. PNG TENUREPNG TENURE PNG TENUREPNG TENURE Tenure does provide: exclusive rights to the subsurface resource right to apply to the OGC for activities approval Tenure does not provide: the authority to conduct any activities on lands (e.g., drilling)

11 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 11. DISPOSITION PROCESSDISPOSITION PROCESS DISPOSITION PROCESSDISPOSITION PROCESS 12 sales per year 106 day process

12 British Columbia Ministry of Natural Gas Development October 22, 2013 Posting Requests /Pages/Instructions.aspx Submitting a Bid Link to Bidding and Disposition Guide Disposition Dates for sueDate/Pages/OGD aspx Page 12. ADDITIONAL INFORMATION SOURCES

13 British Columbia Ministry of Natural Gas Development October 22, 2013 First Nations Engagement Community Engagement Caribou Page 13. RESOURCE DEVELOPMENT UPDATES

14 British Columbia Ministry of Natural Gas Development October 22, 2013 Role of the Crown The 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 proponent Build and maintain good relationships with First Nations in the areas you operate. Page 14. FIRST NATIONS ENGAGEMENT

15 British Columbia Ministry of Natural Gas Development October 22, 2013 Monthly Referral Process Initial Impact Assessments Responsive to First Nation comments Deferred Parcels Meet to resolve area-specific issues – FSJ staff Example: Old Man Lily Parcels Shapefile and PDF map of currently deferred parcels: ult.aspx Strategic First Nations Negotiations Consultation Agreements Strategic Engagement Agreements Page 15. FIRST NATIONS ENGAGEMENT

16 British Columbia Ministry of Natural Gas Development October 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 ENGAGEMENT

17 British Columbia Ministry of Natural Gas Development October 22, 2013 Referral packages and discussions on deferred parcels with local government Landowner Notification Program Farmers’ Advocacy Office renewed Page 17. COMMUNITY ENGAGEMENTCOMMUNITY ENGAGEMENT COMMUNITY ENGAGEMENTCOMMUNITY ENGAGEMENT

18 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 18. CARIBOUCARIBOUCARIBOUCARIBOU CARIBOUCARIBOUCARIBOUCARIBOU

19 British Columbia Ministry of Natural Gas Development October 22, 2013 BOREAL 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 itles/InfoLetters/IssueDate/Pages/TA CRD aspx Page 19.

20 British Columbia Ministry of Natural Gas Development October 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 – UPDATES

21 British Columbia Ministry of Natural Gas Development October 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 CARIBOU

22 British Columbia Ministry of Natural Gas Development October 22, 2013 TENURE MANAGEMENT UPDATE S Page 22.

23 British Columbia Ministry of Natural Gas Development October 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. eBUSINESS

24 British Columbia Ministry of Natural Gas Development October 22, 2013 ROYALTY PROGRAMS Page 24.

25 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 25. TARGETED ROYALTY PROGRAMS ChallengeSolution 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

26 British Columbia Ministry of Natural Gas Development October 22, 2013 These programs can be combined in many cases, thus providing enough margin to move certain projects to economic territory Example - a well that: is a road project (an infrastructure credit), is deep, and is marginal can receive all the associated benefits for those programs More information: Page 26. TARGETED ROYALTY PROGRAMS

27 British Columbia Ministry of Natural Gas Development October 22, 2013 Changes Announced as Part of Budget 2013 Deep Well Credit – minimum 3% royalty payable Summer Drilling Credit Program cancelled More information: oyalties/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 industry The 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 UPDATE

28 British Columbia Ministry of Natural Gas Development October 22, 2013 POLICY & REGULATORY UPDATES Page 28. BC Tenure Working Group Review of the PNG Act & Regulations New Policy Guides

29 British Columbia Ministry of Natural Gas Development October 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 BC TENURE WORKING GROUPBC TENURE WORKING GROUP

30 British Columbia Ministry of Natural Gas Development October 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 & REGULATIONS

31 British Columbia Ministry of Natural Gas Development October 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 & REGULATIONS

32 British Columbia Ministry of Natural Gas Development October 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: 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 Page 32. NEW POLICY GUIDES

33 British Columbia Ministry of Natural Gas Development October 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 GUIDES

34 British Columbia Ministry of Natural Gas Development October 22, 2013 JOBS & THE ECONOMY Page 34.

35 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 35. CROWN SALES

36 British Columbia Ministry of Natural Gas Development October 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 STRATEGY

37 British Columbia Ministry of Natural Gas Development October 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)

38 British Columbia Ministry of Natural Gas Development October 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 UPDATE

39 British Columbia Ministry of Natural Gas Development October 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 PNG OPPORTUNITIESPNG OPPORTUNITIES

40 British Columbia Ministry of Natural Gas Development October 22, 2013 QUESTIONS? Page 40.

41 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 41. PART 2 Tenure Management

42 British Columbia Ministry of Natural Gas Development October 22, 2013 Resource List Tenure 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 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 Tenure ManagementTenure Management

43 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 43. Start Here

44 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 44. Online Title SearchesOnline Title SearchesOnline Title SearchesOnline Title Searches Online Title SearchesOnline Title SearchesOnline 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: Content: Up-to-the minute title status and descriptions for active title Primary Term (years), Area (hectares), Key Dates: Issuance, Effective, Expiry Tracts – Lands and Rights held Groupings (Drilling Licences) Ownership profile Rental & Continuation History Transfers and Encumbrances Special Projects (OGC), Wells (UWIs), Unit Agreements

45 British Columbia Ministry of Natural Gas Development October 22, 2013 Petroleum Titles Online (PTO) File posting requests Support: e-Payments https://epayments.gov.bc.ca Support: Page 45. Online Tools and Support

46 British Columbia Ministry of Natural Gas Development October 22, 2013 Petroleum and Natural Gas Act Grid Regulation Drilling Licence Regulation Fee, Rental and Work Requirement Regulation Storage Reservoir Regulation Page 46. Key Acts and RegulationsKey Acts and Regulations Key Acts and RegulationsKey Acts and Regulations

47 British Columbia Ministry of Natural Gas Development October 22, 2013 Dominion Land Survey (DLS) Petroleum Grid (NTS) Spacing Areas Well Locations Stratigraphy & Zones Page 47. Geography and Geology

48 British Columbia Ministry of Natural Gas Development October 22, 2013 PNG Grid Regulation Schedule 1 Limited to Peace River Block TWPs RGEs 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 DLSDLS

49 British Columbia Ministry of Natural Gas Development October 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 Publications Geothermal and coal tenures are also managed with Petroleum Grid system Page 49. Petroleum Grid (NTS)

50 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 50. Petroleum Grid (NTS)Petroleum Grid (NTS) 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

51 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 51. Petroleum Grid (NTS) Well location example: d-010-A/094-H-16 Title description example: 094-H-16 Blk A Unit 10

52 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 52. Normal Spacing – NTS

53 British Columbia Ministry of Natural Gas Development October 22, 2013 OGAA: Drilling and Production Regulation OTN’s are an OGC approval PNG Act – section 65.1 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 Licences Page 53. Other-than-Normal SpacingOther-than-Normal Spacing Other-than-Normal SpacingOther-than-Normal Spacing

54 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 54. OTN – Peace River Block

55 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 55. OTN – Alberta boundary

56 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 56. OTN – NWT / Yukon boundaries Portions above 60° North

57 British Columbia Ministry of Natural Gas Development October 22, 2013 All tenure rentals are based on area, measured in whole hectares Petroleum 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 same Sum individual source values Keep intermediate fractions Round sum for entire title to nearest whole hectare Page 57. Tenure Size (hectares)Tenure Size (hectares) Tenure Size (hectares)Tenure Size (hectares)

58 British Columbia Ministry of Natural Gas Development October 22, 2013 Tenure Size – NTS Exercise; find the combined area of NTS Units of Block E in 094-H-06 Map94 EFGH Group5 to 8 BlockE F G H Unit41-50 Page 58. Total 6 X 69.8 or Rental Size: 419 ha.

59 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 59. Tenure Size – DLSTenure Size – DLS Tenure Size – DLSTenure Size – DLS Exercise; find the total area of the two gas spacing areas outlined at right OTN: = ha. Sec : infer Total = Rental Size: 514 ha.

60 British Columbia Ministry of Natural Gas Development October 22, 2013 Well Authorization (WA) Simple 5-digit number assigned to each OGC well permit Please use wherever possible in correspondence Unique Well Identifier (UWI) 16-digit code issued at spud Examples DLS: W603 NTS: 200D024H094H1604 Digit 1: DLS (1) or NTS (2) Digit 2: Always zero Digit 3: Sequence of the well at that bottom-hole location Value of 1 never used Digits 4-14: Approved (then actual) bottom-hole location Digits 15-16: drilling or completion event sequence First CE gets same code as its DE Well Name Operator(s), HZ, and surface location Page 60. Well IDs and LocationsWell IDs and Locations Well IDs and LocationsWell IDs and Locations

61 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 61. Zone Designation System Zones 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 code Digits 1-3: Zone series Digits 4-5: Geographic ID Code value increases as age decreases Available for download as a PDF wall chart

62 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 62. STRATIGRAPHIC CHART

63 British Columbia Ministry of Natural Gas Development October 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 System

64 British Columbia Ministry of Natural Gas Development October 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 System

65 British Columbia Ministry of Natural Gas Development October 22, 2013 QUESTIONS? Page 65.

66 British Columbia Ministry of Natural Gas Development October 22, 2013 Permits Drilling Licences Leases Page 66. BC’s Oil and Gas Tenures

67 British Columbia Ministry of Natural Gas Development October 22, 2013 Underground Storage Lease PNG Act sections 126 – 132 Special Agreement PNG Act section 72 Requires Order-in-Council (cabinet) Geothermal Resources Act Permits Leases Page 67. Other Tenure We ManageOther Tenure We ManageOther Tenure We ManageOther Tenure We Manage Other Tenure We ManageOther Tenure We ManageOther Tenure We ManageOther Tenure We Manage

68 British Columbia Ministry of Natural Gas Development October 22, 2013 Permits Page 68.

69 British Columbia Ministry of Natural Gas Development October 22, 2013 A right to explore for oil and gas Available only by Crown sale Postings up to one NTS block accepted, with cause One year primary term Term renewal requires annual exploration spending Actual exploration spending or cash-in-lieu payment Rates defined in Fee, Rental and Work Req. Reg. Renewal options and work requirements vary by class Page 69. Permits - Main Features

70 British Columbia Ministry of Natural Gas Development October 22, 2013 Drilling Licences Page 70.

71 British Columbia Ministry of Natural Gas Development October 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 Sale Postings: 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 DL - Main FeaturesDL - Main Features

72 British Columbia Ministry of Natural Gas Development October 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 Extensions

73 British Columbia Ministry of Natural Gas Development October 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 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 Extensions

74 British Columbia Ministry of Natural Gas Development October 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 DL - Term ExtensionsDL - Term Extensions

75 British Columbia Ministry of Natural Gas Development October 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 DL - Term ExtensionsDL - Term Extensions

76 British Columbia Ministry of Natural Gas Development October 22, 2013 Section 4.1 One 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 DL - GroupingDL - Grouping

77 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 77. Drilling Past Expiry Exercise: DL 1 is extended under 3(7); all DLs here reach the end of their s. 3(5) extension on the dates indicated 1. When does DL 1 expire? Dec Which of the five DLs qualify to be extended under section 3(10)? DL 4 3. Why not DL 2? Expires after DL 1 extension ends 4. Why not DL 3? > 4 km from DL 1 5. Why not DL 5? Expires before DL 1 is extended Spudded: Sep 5 Rig Release: Dec 12 Spudded: Sep 5 Rig Release: Dec 12 Expires: Oct 29 Expires: Oct 9 Expires: Dec 15 Expires: Oct 29 Expires: Oct 19

78 British Columbia Ministry of Natural Gas Development October 22, 2013 QUESTIONS? Page 78.

79 British Columbia Ministry of Natural Gas Development October 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 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 evaluates A GSA may only be designated once during the life of the DL. Page 79. Lease Earnings

80 British Columbia Ministry of Natural Gas Development October 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’ DL Earnings and grouping rights attach to ‘drilled’ DL only Page 80. Lease Earnings

81 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 81. DL Term – Prescribed Areas Download from link in “Info Letters” Info Letter TITLES Link: “NEBC DL Boundary.pdf Map” Primary Term Measured Wellbore Length (meters) Column 2 3 years Column 3 4 years Column 4 5 years less than to to to to to to to to to to to to to to to to to Over

82 British Columbia Ministry of Natural Gas Development October 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 Wells

83 British Columbia Ministry of Natural Gas Development October 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 zones completing a previously uncompleted interval in the well re-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 Wells

84 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 84. Earning Well Scenario A 1 1 GSA Zone A Zone B 1 st 2 nd 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

85 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 85. Earning Well Scenario B 1 1 GSA Zone A Zone B Upper leg Lower leg 1 st 2 nd 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

86 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 86. Earning Well Scenario C 1 1 GSA 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 1 st 2 nd

87 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 87. Earning Well Scenario D GSA 1 Zone A Zone B GSA 2 Drilling order does not matter; both wells qualify as earning wells Well #1 designates GSA1/ZoneA Well #2 designates GSA2/ZoneA 1t1t 1t1t 2 nd

88 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 88. Earning Well – Off DLEarning Well – Off DLEarning Well – Off DLEarning Well – Off DL Earning Well – Off DLEarning Well – Off DLEarning Well – Off DLEarning Well – Off DL Drilling Licence Lease

89 British Columbia Ministry of Natural Gas Development October 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”

90 British Columbia Ministry of Natural Gas Development October 22, 2013 Alternately, evaluation may also mean determining The 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”

91 British Columbia Ministry of Natural Gas Development October 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 Applications

92 British Columbia Ministry of Natural Gas Development October 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 Applications

93 British Columbia Ministry of Natural Gas Development October 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 Configuration

94 British Columbia Ministry of Natural Gas Development October 22, 2013 QUESTIONS? Page 94.

95 British Columbia Ministry of Natural Gas Development October 22, 2013 Leases Page 95.

96 British Columbia Ministry of Natural Gas Development October 22, 2013 A right to explore for and produce oil and gas Available from Crown Sale Converting Permits and Drilling Licences Split from another Lease (transfer) May be continued beyond initial primary term Page 96. LeasesLeases LeasesLeases

97 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 97. Leases – TermLeases – TermLeases – TermLeases – Term Leases – TermLeases – TermLeases – 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

98 British Columbia Ministry of Natural Gas Development October 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 – Continuations

99 British Columbia Ministry of Natural Gas Development October 22, 2013 Continuation by Penalty 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 99. s. 62 Continuation

100 British Columbia Ministry of Natural Gas Development October 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 Continuation

101 British Columbia Ministry of Natural Gas Development October 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, CO 2, 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 Continuation

102 British Columbia Ministry of Natural Gas Development October 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 Continuation

103 British Columbia Ministry of Natural Gas Development October 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 Continuation

104 British Columbia Ministry of Natural Gas Development October 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) - Eligibility

105 British Columbia Ministry of Natural Gas Development October 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: TA DG (Inga Doig Phosphate ‘D’ Gas) Page 105. s. 58(3)(a) – Land Plats

106 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 106. LAND PLATS - ExampleLAND PLATS - ExampleLAND PLATS - ExampleLAND PLATS - Example LAND PLATS - ExampleLAND PLATS - ExampleLAND PLATS - ExampleLAND PLATS - Example

107 British Columbia Ministry of Natural Gas Development October 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 available Data 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 Plats

108 British Columbia Ministry of Natural Gas Development October 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 Plats

109 British Columbia Ministry of Natural Gas Development October 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 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 Plats

110 British Columbia Ministry of Natural Gas Development October 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 deposits All 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) – Reversion

111 British Columbia Ministry of Natural Gas Development October 22, 2013 Benefits of Zone-Specific Retention Increased 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) – Reversion

112 British Columbia Ministry of Natural Gas Development October 22, 2013 Standards for Zone-Specific Retention Well 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 Reversion

113 British Columbia Ministry of Natural Gas Development October 22, 2013 iMapBC 2.0 Land Plats Demo

114 British Columbia Ministry of Natural Gas Development October 22, 2013 General Features May 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)

115 British Columbia Ministry of Natural Gas Development October 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)

116 British Columbia Ministry of Natural Gas Development October 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)

117 British Columbia Ministry of Natural Gas Development October 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)

118 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 118. PART 3 General Administration

119 British Columbia Ministry of Natural Gas Development October 22, 2013 ePayments Support: Page 119.

120 British Columbia Ministry of Natural Gas Development October 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 mandatory e-Payments will not accept payments related to: Split Transfers of PNG Leases PNG Permits Section 72 Agreements Underground Storage or Geothermal tenure Page 120. ePayments – Overview

121 British Columbia Ministry of Natural Gas Development October 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 Roles

122 British Columbia Ministry of Natural Gas Development October 22, 2013 Page 122. Continuing your Tenure Statements 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

123 British Columbia Ministry of Natural Gas Development October 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 payments

124 British Columbia Ministry of Natural Gas Development October 22, 2013 Rental “Default Notices” were eliminated July 1, 2010 Manage expiries from the All Titles screen e-Payments sends a monthly reminder to view your statements Overdue titles are shown in purple and fall off ePayments 61 days past expiry Page 124. Managing Rental Deadlines

125 British Columbia Ministry of Natural Gas Development October 22, 2013 Late penalties are automatically calculated once the anniversary date has passed Leases Day % Day – 3.0 % Drilling Licence Day 1-60 $ Page 125. Late Penalties

126 British Columbia Ministry of Natural Gas Development October 22, 2013 Request from All Titles screen in ePayments Ministry will cancel 60 days after anniversary date and send confirmation Check title to be cancelled While 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.

127 British Columbia Ministry of Natural Gas Development October 22, 2013 Letter of Authorization’s are needed when you are neither an owner or payor Required for Titles not covered by e-Payments For e-Payments, the registered Owner’s intent is implied by authorizing the Designated Payor to make decisions on the title Page 127. Letters of Authority

128 British Columbia Ministry of Natural Gas Development October 22, 2013 Online Help Follow link in Resources slide Getting Started Self-Tutoring FAQs Quick Reference Tool Page 128. Training Information

129 British Columbia Ministry of Natural Gas Development October 22, 2013 Other Instruments Affecting Title Page 129.

130 British Columbia Ministry of Natural Gas Development October 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

131 British Columbia Ministry of Natural Gas Development October 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. Partnerships

132 British Columbia Ministry of Natural Gas Development October 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 Transfers

133 British Columbia Ministry of Natural Gas Development October 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 Transfers

134 British Columbia Ministry of Natural Gas Development October 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 Transfers

135 British Columbia Ministry of Natural Gas Development October 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 Transfers Page 135.

136 British Columbia Ministry of Natural Gas Development October 22, 2013 A procedure to divide one lease into two or more leases Leases only $ fee for each new lease to be issued Leases may be divided by: Surface hectares Stratigraphic A combination of both Page 136. Split Transfers

137 British Columbia Ministry of Natural Gas Development October 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 Transfers Page 137.

138 British Columbia Ministry of Natural Gas Development October 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 Agreements

139 British Columbia Ministry of Natural Gas Development October 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

140 British Columbia Ministry of Natural Gas Development October 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 Encumbrances

141 British Columbia Ministry of Natural Gas Development October 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 Encumbrances

142 British Columbia Ministry of Natural Gas Development October 22, 2013 Requests for copies of encumbrances can be sent by fax Fax: (250) 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 up to 50 pages, by collect courier or mail – include your courier name and account number with your request Page 142. Copies of Encumbrances

143 British Columbia Ministry of Natural Gas Development October 22, 2013 Requests must include: May be sent by mail, fax or 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 & Amalgamations

144 British Columbia Ministry of Natural Gas Development October 22, 2013 THANK YOU Page 144.


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