1. BC Tenure Regulations CAPL
October 19, 2010
Page 1.

2. SEMINAR OUTLINE PART 1 Oil & Gas in British Columbia
Legislation and Incentive Initiatives
Clean Energy Act
Oil and Gas Activities Act
Royalty Credit Programs
First Nations Engagement
Relationships and Agreements
Caribou Conservation and Habitat Protection
Page 2.

3. SEMINAR OUTLINE PART 1 (continued) PART 2 – Tenure
Community and Landowner Engagement
Crown Sale and Referral Process
Organizational Structure and Function
Accomplishments and Initiatives
PART 2 – Tenure
Resources for Tenure Managers
Introduction to BC’s tenure, land, and zone systems
Permits

4. PART 3 – Payments & Instruments
SEMINAR OUTLINE
PART 2 (continued)
Drilling Licences
Leases
PART 3 – Payments & Instruments
e-Payments
Transfers, Encumbrances, and Related

5. Key Contacts
Laurel Nash, Executive Director, Oil and Gas Titles Branch
POSTINGS, PETROLEUM TITLES ONLINE, WEBMASTER, MAPPING
Chris Blaney, Manager, Crown Sale and GIS Services
PRE-SALE CONSULTATIONS, TENURE CAVEATS
May Mah-Paulson, Director, Resource Development
GEOLOGY, ZONE DESIGNATION
Dave Richardson, Manager, Geology
DRILLING LICENCES, WORK PROGRAMS, PERMITS
Terry Branscombe, Senior Tenure Management Advisor
DRILLING LICENCES, LEASE CONTINUATIONS
Cindy Kocol, Tenure Management Advisor
DRILLING LICENCES, TRANSFERS, ENCUMBRANCES
Christine McCarthy, Tenure Management Advisor
E-PAYMENTS, BCeID, PRE-AUTHORIZED DEBITS
Carolyn Desjardins, Manager, Revenue Collection, Reconciliation and Reporting
GENERAL INQUIRIES
WWW:

6. OIL AND GAS
IN BRITISH COLUMBIA

7. CURRENT MEMPR INITIATIVES

8. Clean Energy Act (2010)
The Clean Energy Act, 2010, builds on the foundation of the BC Energy Plan and the Climate Action Plan
Three policy goals:
Ensuring electricity self sufficiency at low rates;
Harnessing BC’s clean power potential to create jobs in every region; and
Strengthening environmental stewardship and reducing greenhouse gases.

9. BC Oil & Gas Activities Act (OGAA)
OGAA passed in 2008;
Became law October 4, 2010;
See OGC website:

10. OGAA: Consolidation of legislation
Tenure Admin.
Explore & Develop
Petroleum & Natural Gas Act
Pipeline Act
OGC Act
Specified Enactment Powers
OGAA
The amended version of the P&NG Act is on the BC Laws website:
Moves and updates the regulation of the oil and gas industry from the Petroleum & Natural Gas Act, the Pipeline Act and the Oil and Gas Commission Act into one new Act.
Amendments to the Petroleum & Natural Gas Act take effective October 4,
Amendments to the Petroleum and Natural Gas Act will change the name of the Mediation and Arbitration Board to the Surface Rights Board – and enhance some of the authorities of the Board.
Mediation and Arbitration Board changed to Surface Rights Board:

11. OGAA: Summary of Changes
Modernized, consolidated regulatory framework;
Flexibility & innovation;
Enhanced C&E framework;
Stakeholder input & comments;
Protect/manage environmental values
Formal review and appeal process

12. OGAA: Summary of Changes
Permitting:
Consultation & notification
OGC must consider Government’s Environmental Objectives (GEOs)
Review & appeal provisions
Compliance history considered
Activities:
Industry standards
Results-based requirements
Environmental protection & management
Safety & security
Consultation & notifications now a legal requirement (OGAA sec. 32)
GEOs for water, riparian areas, wildlife and OGMAs must be considered
OGC may refuse to issue a permit based on actions of applicant or agent (OGAA sec 26(3)(4))

13. Targeted Royalty Programs
What was the challenge?
What was the solution?
B.C. drilling activity very concentrated during winter months, when ground frozen
Summer Royalty Credit Program
Western Canada sedimentary basin deepens towards the West
Deep Royalty Credit Program
New, conventional wells with lower productivity
Marginal Royalty Program
Tight gas development
Ultra-marginal (tight gas) Royalty Program
Coalbed gas potential development challenges
Coalbed Methane Royalty Program
“White spaces” and areas with limited infrastructure (roads/pipes) available
Infrastructure Royalty Credit Program
Huge potential in new, remote, high-risk unconventional resources
Net Profit Royalty Program

14. How Can These Royalty Programs Help Develop Unconventional Resources?
These programs can be combined in many cases, thus providing enough margin to move certain projects to economic territory.
Example - a well that…
a road project (an infrastructure credit),
is drilled in the “summer”,
is deep, and
is marginal…
…can receive all the associated benefits for those programs.
For more information:

15. Infrastructure Royalty Credit Program Oil and Gas Stimulus Package
Facilitates increased oil and gas exploration and production in under-developed areas and extends the drilling season to allow for year-round activity
Issued a request for applications for road and pipeline projects in March 2010
In August 2010, $115.6 million in royalty credits were awarded to 16 companies for 21 natural gas and petroleum infrastructure projects
Stimulus Package (August 2009):
4 royalty initiatives and 2 regulatory initiatives designed to address economic slowdown by generating new stimulus for drilling in B.C.

16. Long Term Results: Becoming a Leader in North American Natural Gas Markets
Second natural gas producer in Canada, after Alberta
Increasing market share in Canada
Potential to triple production as unconventional natural gas develops – existing production 1 Tcf/year
How successful have we been?
We are the second natural gas producer in Canada, after Alberta – and catching up…
We have consistently increased our “market share” in the natural gas market in Canada
Increase in wells drilled, production, reserves and capital spending
Industry investment increased from only 9.7% 2000, to 23.2% of total industry investment in conventional oil and gas in 2009.
Similar trends are observed in wells drilled, natural gas production and natural gas reserves, with BC’s participation increasing in all.
We have the potential to triple our natural gas production in the next decade and we have the plan, the commitment, and the programs in place to “un-tap” our unconventional resources and get there
BC is well on its way to become a leader in North American Natural Gas markets.

17. FIRST NATION AND COMMUNITY ENGAGEMENT
Page 17.

18. First Nation Engagement
Recent legal decisions confirm Aboriginal rights exist in B.C. Means consultation at a pre-tenure stage
Aboriginal and Treaty rights are protected under section 35 of the Constitution Act
1998 Halfway (Metachia) decision confirmed government must consult
Results in change in government policy dealing with First Nations and confirms need to consult at the tenures stage

19. First Nation Engagement
Assign caveats in the Notice of Public Tender that respond to First Nation comments
"Oil and Gas Tenure 101" Presentations to Chief & Council and Lands Staff
Responsive to First Nation comments
Provide more detailed mapping and information for specific sites
Meet to resolve area-specific issues

20. New Relationship
Significant steps taken by government to recognize and reconcile the gap between aboriginal people and other British Columbians
Milestones reached:
Improved Treaty process
Reconciliation and Economic Benefit Agreement
Revenue Sharing Agreements on Mine Projects
Land Use Plans
Language and culture preservation
Support for aboriginal learners
Improved health care and housing
For further information visit:

21. Treaty 8 Treaty originally signed in 1899
For further information visit:

22. Economic Benefits Agreement
Outlines obligations of British Columbia
Outlines when benefits are paid to a band
Outlines dispute resolution procedures
Outlines obligations of Treaty 8 First Nations
Doig River
Prophet River
West Moberly
EBA enables resource management agreements; more specifically, the Long Term Oil and Gas Agreement.
For further information visit:
Blueberry River First Nation are part of a separate EBA from the other three, and are not members of the T8 association (additional notes on next slide).

23. T8-BC Long Term Oil and Gas Agreement (LTOGA)
The Ministry and the OGC signed a completed LTOGA with BC-based Treaty 8 First Nations in the Spring of 2009.
LTOGA is separate from the OGC’s Consultation Process Agreements
The main categories of the agreement are the Crown land disposition process, emergency response management, compliance and enforcement, reclamation, collaborative projects and commitment to ongoing communication and educational opportunities.
The LTOGA will be administered by an Implementation Committee that will find efficiencies by working with the CPA Implementation Committee
The LTOGA negotiations include Doig River First Nation, Prophet River First Nation and West Moberly First Nation. Fort Nelson withdrew from the negotiations in the Spring of Saulteau and Halfway First Nations are not signatories to the EBA. Blueberry River First Nation and McLeod Lake Indian band are not members of the T8 Tribal Association, nor are they signatories to the T8 EBA.

24. T8-BC Long Term Oil and Gas Agreement (LTOGA): Industry Engagement
During negotiations, the Ministry/OGC and Treaty 8 had a series of workshops with First Nation and Industry participation (including CAPL and CAPP representatives).
A December 2008 workshop focused on identifying issues and collaborative solutions in the tenuring process. The negotiation teams used the ideas and input from the workshops in drafting the Agreement.
In September 2009 the Ministry/OGC and Treaty 8 held a follow up workshop that focused on how First Nation related terms and conditions could be made more clear and transparent for First Nations, industry and Government.
The Parties will continue to engage with Industry in the implementation of the Agreement.

25. Fort Nelson First Nation
Fort Nelson First Nation (FNFN) were an original signatory to the Treaty 8 Economic Benefit Agreement (EBA) and participant in the negotiation of the Collaborative Management Agreements, including the Long Term Oil and Gas Agreement.
In April of 2009, FNFN voted to withdraw from the Treaty 8 EBA in favour of pursuing solutions outside of the Treaty 8 EBA framework.
The Ministry and the OGC are currently working with the leadership of FNFN and the Horn River Producers Group with regard to their interests and concerns.

26. Treaty 8 Consultation Process Agreements
Treaty 8 Consultation Process Agreements (CPA) are due to expire March 31, 2011.
The CPA Implementation Committee is currently undertaking a review to prepare for the renewal of these agreements.
Implementation Committee is composed of Treaty 8 land managers and representatives from the OGC and MEMPR.

27. Caribou Conservation and Habitat Protection
Northeastern BC encompasses the western extent of boreal caribou in Canada, which are listed as threatened and Priority 1 species for action under the BC Conservation Framework.
500,000 hectares of boreal caribou habitat have been set aside as “resource review areas” (RRAs) where no natural gas and petroleum tenure requests will be accepted for 5 years. 
The RRAs will be revisited after five years when the effectiveness of caribou population management measures and population assessments are better understood. 
Government will collaborate on this step with First Nations, industry and stakeholders.
Key aspects of Boreal Caribou management and recovery will be formalized and enabled through the implementation of the Oil and Gas Activity Act (OGAA) Environmental Protection and Management Regulation.
Most of the information I took straight from the information letter online . The last bullet I took from a letter we wrote to Husky energy (MJ)

28. Resource Review Areas (RRAs)
Most of the information I took straight from the information letter online . The last bullet I took from a letter we wrote to Husky energy (MJ)
Source:

29. Community Engagement

30. Northeast Energy and Mines Advisory Committee - NEEMAC
NEEMAC was established in 2006 to facilitate community engagement in relation to energy, mining and petroleum issues
2008 achievements:
Landowner Notification Program
Oil and Gas Activities Act input
Coordination Agreement between OGC and Mediation and Arbitration Board
Creation of Regional Executive Director position in NE British Columbia
Subcommittee consisting of industry, landowners and govt., working on a Standard Surface Lease Agreement for private landowners to be included as part of LON Program
For further information on NEEMAC visit:

31. Landowner Notification
Program initiated in April 2008
Landowner Notification Program provides landowners with:
information about oil and gas exploration and development, and
opportunity to provide companies surface feature information.
The highest bidder is provided checklist(s) with Landowner comments
For further information visit:
NOTE: nothing new for Landowner notification, so can delete slide if no longer want to mention it.

32. Standard Surface Lease (Voluntary)
Negotiated : CAPL, SEPAC, CAPP together with MEMPR and Land Owner groups
Final Version “Completed” with organizational commitment: September, 2009
Included in BC Landowner Notification materials: October 2009
Thank you to the CAPL members who contributed to the negotiation and completion of the voluntary standard surface lease.
It is intended as a ‘guide’ with key concepts negotiated in legal detail with legal representation.
This is a registerable instrument.

33. Surface Lease Agreement - Affirmation
“A surface lease between landowners and industry members is an agreement between parties, and may need to be tailored to address the specific concerns of each party. The Canadian Association of Petroleum Producers encourages its members to use appropriate clauses of the sample agreement to enter into site specific agreements. The only exception to this is clause 4. These provisions are required by the provisions of B.C. Reg.497/74 and, as such, must form a part of every surface lease in British Columbia.”
The draft surface lease agreement is a result of a two year consultative process with representatives
of government, industry and stakeholders, including the following
􀂃 Ministry of Energy, Mines and Petroleum Resources (MEMPR)
􀂃 Mediation Arbitration Board (MAB)
􀂃 Attorney General’s Office
􀂃 Deputy Surveyor General (Land Title & Survey Authority of British Columbia
􀂃 Deputy Registrar (Land Title & Survey Authority of British Columbia)
􀂃 Custodians of the Peace
􀂃 BC Cattlemen Association
􀂃 BC Grain Producers Association
􀂃 Canadian Association of Petroleum Producers (CAPP)
􀂃 Small Producers and Explorers Association of Canada (SEPAC)
􀂃 Canadian Association of Petroleum Landmen (CAPL)
As a result of the extensive consultation process, industry, stakeholders and government have a
better understanding of the multiple common interests in land stewardship and access issues as we
work to supply a safe secure energy supply and provide economic benefit to British Columbia over
the next decades. The process has resulted in the development of a surface lease that not only
conforms to the Petroleum and Natural Gas Act but also addresses many concerns of industry and
stakeholders.
A surface lease between landowners and industry members is an agreement between parties, and
may need to be tailored to address the specific concerns of each party. The Canadian Association of
Petroleum Producers encourages its members to use appropriate clauses of the sample agreement to
enter into site specific agreements. The only exception to this is clause 4. These provisions are
required by the provisions of B.C. Reg.497/74 and, as such, must form a part of every surface lease
in British Columbia.

34. Farmers Advocate
Office opened October 1, 2010, funded by Peace River Reg. Dist. & MEMPR
Based in Dawson Creek, B.C.
Provide a no-fee information service to NE B.C. rural landowners related to oil and gas development:
Disseminating information
Resolving problems
Emphasizing facilitation and negotiation
An independent, effective gateway to existing organizations
For further information visit:

35. ACQUIRING OIL AND GAS TENURE IN B.C.

36. Subsurface Ownership Two forms of subsurface ownership:
Crown: MEMPR issues Crown-owned subsurface tenures and consults on all of these requested issuances
Freehold: There are cases where subsurface is “freehold” and owned by the private parties. These may be for all rights or specific rights e.g. coal, phosphate and PNG
OGC regulates all industry activity, whether Crown or freehold

37. Oil & Gas Tenure Tenure does provide :
exclusive rights to the subsurface resource
right to apply to the Oil and Gas Commission (OGC) for activities approval
Tenure does not provide:
the authority to conduct any activities on lands (e.g. drilling)

38. Sale Process Monthly auctions of tenure
Industry nominates parcels for each auction
Internal review
Proposed parcels referred to First Nations, local governments and Provincial agencies
If parcel accepted for sale “posting”, then caveats added to proposed tenure
Proposed tenure is advertised seven weeks prior to sale date
Interested parties submit sealed bids
If sold (bids not always accepted), highest cash offer

39. Oil and Gas Posting Request and Sale Process
12 sales per year
106-day process
Posting Requests
Internal Review and Process
Distribute Referrals
Provincial Ministries
Local/Regional Governments
First Nations
Returns Compiled for Analysis
Determine Crown PNG Rights
Notice of Public Tender
Landowner Notification
Monthly Rights Auction

40. Posting Request
Pre-tenure process is initiated by posting requests by industry for PNG rights
Companies request parcels for each sale, which includes the following information:
Specific formations(s) requested
Parcel configuration if more than one parcel is requested
Companies do not provide information on what development will take place or what resource they are targeting

41. Internal Review and Process
Parcels are reviewed to identify if MEMPR is able and willing to send parcels out for review
The Oil and Gas Commission (OGC) participates in this internal review process
For example:
Are the parcels configured correctly (i.e., on spacing area)
Are the rights available
Do the parcels overlap:
Previously deferred parcel
Land use planning areas (PMT)
Areas which require Pre-Tenure Plan (MK)

42. Referral Process
First Nations, local governments, and Crown Agencies are sent referral packages.
MEMPR encourages FN to provide:
Site-specific information when available: Gravesites, cabins, campsites, etc., and
What current treaty activities are taking place, on what species and when these activities are occurring

43. Referral Comments Comments requested within four weeks
Comments generally focus on high level access management issues, do include some site specific information
Comments are assessed to determine next steps:
Proceed to disposition
Not to proceed for disposition
Further consultation/research

44. Provincial Ministries Local/Regional Governments
Referral Comments
Provincial Ministries
First Nations
Local/Regional Governments
Review parcels for conflict with:
Official Community Plans
residential areas
drinking water supply areas
reserves
sacred areas/ burial grounds
hunting sites
traditional use sites
wildlife habitats
other tenure holders (e.g. grazing, forest, coal)

45. Caveats Created
Where appropriate, comments are used to assign caveats to reflect issues or concerns that should be considered prior to development.
Caveats identify high level issues which:
The OGC should be aware of at the activity stage
Proponents should be aware of when acquiring tenure
Identify that potential mitigation strategies may be required at the activity stage

46. Caveat Examples Caveats – near First Nation areas (examples)
X FIRST NATION HAS REQUESTED ENGAGEMENT PRIOR TO ON-THE-GROUND ACTIVITIES. TRADITIONAL USE, ARCHAEOLOGICAL, OR WILDLIFE ASSESSMENTS AND MITIGATION PLANS MAY BE REQUESTED PRIOR TO ON-THE-GROUND ACTIVITIES.
PARCEL OVERLAPS TRAPLINE REGISTERED TO FIRST NATION COMMUNITY MEMBER

47. Caveat Examples Caveat – near community/residential area (example)
PARCEL CONTAINS OR IS NEAR RESIDENTIAL DEVELOPMENTS. THE OIL AND GAS COMMISSION PUBLIC ENGAGEMENT AND DISPUTE RESOLUTION MANAGER RECOMMENDS THAT OPERATORS CONSIDER REDUCING OR ELIMINATING FLARING, AND MANAGE NOISE AS PER BC NOISE CONTROL BEST PRACTICES GUIDELINES.

48. Caveat Examples Caveats – in the Horn River (examples)
PARCEL IS LOCATED WITHIN HORN RIVER, MONTNEY OR CORDOVA EMBAYMENT BOUNDARIES IN WHICH SHALE GAS RECOVERY AND TECHNOLOGY IS ANTICIPATED; PARTICIPATION IN A WATER OR ACCESS PLANNING PROCESS WITH OTHER TENURE HOLDERS MAY BE REQUIRED TO COORDINATE ACTIVITIES, EXPLORATION AND DEVELOPMENT.

49. Enhanced Collaboration with the OGC
We have been working with the OGC to look for opportunities to better link the MEMPR pre-tenure referral process with that of the OGC activity application referral process
MEMPR assigns caveats to individual tenure parcels based on comments received through the referral process and internal analysis; this includes discussions with the OGC to ensure there is a common understanding of the intent of the assigned caveats
At the activity application stage, the OGC reviews caveats assigned to the relevant PNG tenure

50. Notice of Public Tender
Prepare full parcel description for publication.

51. Landowner Notification
The Landowner Notification packages are sent out six weeks prior to the monthly rights sale by Public Auction.
Package includes:
Cover/information letter
Oil and Gas and You Booklet
Property Checklist
Standard Surface Lease Agreement
Map
Completed property checklists are sent by the Ministry to the company that successfully acquires tenure – this information is intended to assist companies to engage landowners and plan development

52. Monthly Disposition Interested parties submit sealed bids
Parcel awarded to top bidder if considered fair value

53. Sale Process Schedule - 2011
Disposition Date
Closing Date for Postings
Withdraw,Postpone, Revise Deadline
Date Notice of Public Tender Published
NB or NAB
Closing Date
January 19, 2011
October 5, 2010
November 17, 2010
December 2, 2010
January 25, 2011
February 23, 2011
November 9, 2010
December 22, 2010
January 6, 2011
March 1, 2011
March 30, 2011
December 14, 2010
January 26, 2011
February 10, 2011
April 5, 2011
April 27, 2011
January 11, 2011
March 10, 2011
May 3, 2011
May 25, 2011
February 8, 2011
March 23, 2011
April 7, 2011
May 31, 2011
June 22, 2011
March 8, 2011
April 20, 2011
May 5, 2011
June 28, 2011
July 20, 2011
May 18, 2011
June 2, 2011
July 26, 2011
August 17, 2011
June 15, 2011
June 30, 2011
August 23, 2011
September 14, 2011
July 13, 2011
July 28, 2011
September 20, 2011
October 12, 2011
August 10, 2011
August 25, 2011
October 18, 2011
November 9, 2011
September 7, 2011
September 22, 2011
November 15, 2011
December 14, 2011
August 30, 2011
October 27, 2011
December 20, 2011
Source:

54. Crown Sales-Adjudication
Province reserves the right to reject any or all bids
Bid adjudication based on a technical review of:
Area geology
Historic prices
Current bidding trends
Economic climate
For bids not accepted, comment in results posting will be ‘No bid or No acceptable bid’

55. Improvements/ Initiatives
Longer timeline:
from 99 days to 106 days
Enhanced collaboration with the OGC
Increased communication/response to local government staff and First Nation land staff with regards to comments provided
Increased communication with industry on expectations
quarterly meetings
Enhanced maps to assist local government staff and First Nation land staff in the review of the parcels

56. TITLES BRANCH

57. Assistant Deputy Minister
Ministry Structure
Deputy Minister
Ministry of Energy, Mines and Petroleum Resources
Assistant Deputy Minister
Titles, Aboriginal and Corporate Relations Division
Oil and Gas Division
Mining and Minerals Division
Electricity and Alternative Energy Division

58. Titles, Aboriginal & Corporate Relations Division Structure

59. Titles Branch Structure
There are over 60 people who work for the Titles, Aboriginal and Corporate Relations Division. The largest branch – both in terms of staff and revenue generation – is the Titles Branch.
This is the group of folks who manage the subsurface resources to get maximum benefit for British Columbians.

60. Titles Branch Functions
Subsurface Tenuring
Tenure dispositions (sales)
Creation/maintenance of geological zone descriptions
Land access restrictions (caveats):
Client and stakeholder engagement
First Nation and Community engagement
Land Owner Notification Program
Mapping:
First Nation consultation
Land Access/Land Use
Resource Development
Geology
Special Requests
Title Administration:
Fees, rentals & drilling deposits
Renewals, continuations, extensions
Tenure conversions
Cancellations
Splits, transfers & encumbrances
Creation/evaluation of policy and legislation re oil, gas, mineral and geothermal resources
Review and update PNG Act and Regulations , Mineral Tenure Act and Regulations and Geothermal Resources Act and Regulations

61. Resource Development First Nations and Community Engagement
Lead Referral process for land sales
Daily client and stakeholder engagement
First Nation and Community Engagement
LTOGA
EBAs
Official community plans
Landowner Notification Program
Geothermal Referral Process
Coal Referral Process
Links - Oil and Gas Division
- Electricity and Alternative Energy
Division
- Aboriginal Relations Division
- Oil & Gas Commission
- Other agencies/levels of Government

62. Resource Development Crown Sales and GIS Services
Responsible for principle phase of Crown Sale Management Program
Daily client/stakeholder engagement
Mapping
“Offered” parcels shapefiles are being posted to website as of January 2010.
Ad Hoc Mapping Requests in Support of:
First Nation Consultation
Land access/Land use
Resource Development
Geology
Special requests
Minister
Public Affairs
Forecasting for Crown sales

63. Policy and Planning Policy Review and update: PNG Act and Regulations
Geothermal Act and Regulations
Review and develop policy and procedures
Responding to Energy Plan policy actions
Updating information letters
Oil and Gas Tenure 101
Geothermal Tenure 101
Links - Compliance and Administration Branch
- Corporate Policy & Planning Branch
- Oil and Gas Division
- Alternative Energy Division
- Oil and Gas Commission
- Other agencies/levels of Government

64. Policy & Planning Tenure Management
Maintenance of Provincial oil and gas titles registry – PTS (Petroleum Titles System is web-based application to provide direct access to Crown oil & gas titles)
Daily client and stakeholder engagement
Legislation and Regulations:
Review PNG Act and Regulations.
E-business
Ownership changes
Lease continuations
Conversions
Permits
DLs
Industry training sessions
CAPL Seminar Oct. 19/10
Links - Compliance and Administration Branch
- Oil and Gas Commission
- Oil and Gas Division

65. Geology
Creation and maintenance of system of geological zone descriptions that divide B.C. into packages which can be issued in the form of Crown PNG title
Evaluates and make decisions on title continuation and maintenance
Participates in creation/evaluation of policy and legislation re oil, gas, and geothermal resources
Puts in place definitions that can be used in special agreements for development of unconventional gas
Contributes expert advice to Ministry departments that promote development of unconventional gas
Daily client and stakeholder engagement
Continuations Backlog
In past 6 months have reduced 6-month backlog to days
All continuations now working on a 60-day turnaround, which is the period of application specified in the PNG Act
Land Plats to be published to industry and commercial vendors
Co-op bridging program, training for succession
Links - Oil and Gas Division
- Oil and Gas Commission
- Electricity and Alternative Energy Division

66. TITLES ACCOMPLISHMENTS
Page 66.

67. Accomplishments TITLES 2010 POLICY & LEGISLATION
Business Area
Recent Accomplishments
POLICY & LEGISLATION
Development of the Oil and Gas Activities Act (OGAA)
Provides a streamlined and simplified regulatory framework – consolidation of the Petroleum and Natural Gas Act, Oil and Gas Commission Act and Pipeline Act.
Establishment of a Northern Caribou Management Strategy
Established Resource Review Areas (RRAs) in a portion of the remaining untenured areas across B.C.’s northern caribou range.
Planning for the Management of Boreal Caribou
Established Resource Review Areas (RRAs) in untenured areas across B.C.’s boreal caribou range, accounting for 500,000 hectares.
Identification of boreal caribou habitat for management under the OGAA.
Developing mitigation practices with First Nations and industry.
Review and amendment of the Drilling Licence Regulation (2009)
Re-emphasized Drilling Licenses (DL) as an “exploration’” tenure.
Linked risk to reward through redefinition of earning wells and small DL grouping rules.

68. Average price per hectare
Accomplishments
TITLES
2010
Business Area
Recent Accomplishments
CROWN SALES & GIS SERVICES
The June 2010 natural gas and petroleum rights sale was the fifth largest on record for B.C., contributing over $404 million in bonus bids to the calendar year total of over $609 million.
Crown Sale Performance (calendar year)
2009
2010 (to July)
# of hectares disposed
389,146
281,830
Total tender bonus
$892,956,403.79
$662,457,744.35
Average price per hectare
$2,294
$2,350.56

69. Accomplishments TITLES 2010
Business Area
Recent Accomplishments
RESOURCE DEVELOPMENT
Completed improvements to Landowner Notification (LON) Program as per 2009 formal review. Key changes include:
Notification packages revised for improved readability;
Creation of automated map process;
Installation of direct phone line in Titles Branch specific to LON;
Follow-up phone calls with landowners initiated for each disposition;
Improved data and information tracking.
Improved communication and working relationship with the Oil and Gas Commission (OGC) with regards to parcel conditions/caveats.
Engagement with the Ministry of Environment on streamlining the referral process for caribou habitat.
Improvements to referral process with First Nations.

70. Accomplishments TITLES 2010 Business Area Recent Accomplishments
GEOLOGY
Cleared the Land Plat publication backlog of more than two years. Land Plats will soon be available from Crown Publications.
COMPLIANCE & ADMINISTRATION
Development of IPS (Integrated Petroleum System) software, a newly integrated system designed to replace and/or streamline current software systems, including Petroleum Titles System (PTS), Petroleum Accounts Receivable System (PARS), and Sales Parcel System (SPS) – design phase completed; development phase to be completed by August 31, 2011.
GEOTHERMAL RESOURCES
Initiated a pre-tenure referral process with First Nations, local governments, and provincial agencies for four areas of industry interest – June 2009.
Hosted a Crown sale for geothermal exploration rights in March 2010 for one referred area and issued a geothermal permit near Knight Inlet (central coast).
Seven additional parcels sent out for pre-tenure referral – June 2010.
Next auction for geothermal rights expected for fall 2010.

71. CURRENT INITIATIVES
Page 71.

72. Current Initiatives eBusiness Industry Engagement
Lands Plats - used to continue Lease tenure – are drafted and current. Queen’s Printer will distribute after a survey of company interest is completed by the Industry-Government Tenure Working Group.
Geothermal tenure disposition
Other priority initiatives are:
Review of Mineral Tenure Act and regulations
Review of Geothermal Resources Act
Review of PNG Act and Regulations
Review of PNG referral process
Implementation of coal referral process
Implementation of zone-specific retention

73. eBusiness Update
Integrated Petroleum System – (iPS) will transition 3 legacy applications to current technology
Application delivery and integration testing is scheduled to be complete in Sept 2011
UAT is scheduled for Oct 2011
Industry will have an opportunity to participate as it relates to eBidding
Production launch including eBidding is Nov 2011
ePayments
Submissions issues are, for the most part, resolved.
Still dealing with some company specific items
Automated s will be enhanced to provide clarity for clients
Some issues remain associated with refunds

74. Industry Engagement
Since May 2008, a working group has been established between industry and govt. that meets on a quarterly basis to discuss:
Improved communication
Legislation and Regulations
Opportunities to work more efficiently and effectively
Educational opportunities
eBusiness
Developed Shared Principles to help guide discussions around policy, legislation and regulation changes
Used the Shared Principles to guide the discussions on the Drilling Licence Regulation amendments

75. Shared Principles
Ensuring the Crown, as the resource owner, receives an equitable share of economic rent (including all revenue streams).
Ensuring Industry receives an economically commensurate reward and recognition for risks taken ("risk/reward").
Recognizing close linkages to environmental footprint and stakeholder considerations.
Recognizing close linkage to First Nations considerations.
Recognize the relationship and responsibility Industry and MEMPR have to the people of BC.
Viewing tenure as an element in a continuum of the exploration and development process, rather than as a discrete compartment.
Recognizing the close integration of tenure with the broader regulatory and royalty regimes.
Creating and maintaining a fair, efficient, effective and transparent process for management of tenure across the province.
Maintaining flexibility to address custom solutions for specific emerging play types and developing technologies.

76. Review of PNG Act & Regulations
The Petroleum and Natural Gas Act (PNG Act) has not had an overall review since the late 1980’s
A comprehensive review of the PNG Act is required to ensure it is responsive to both conventional and unconventional gas development and responds to government direction.
Ministry/Industry working group has identified priorities for further discussion
Legislation (PNGA)
Expansion of Director of Petroleum Land’s discretionary power
Lease term lengths
Fees & rentals
Regulation
Tenuring process
Rental rates for all tenure types

77. THANK YOU!
Laurel Nash
Executive Lead
Titles Branch
Page 77.

78. PART 2 Tenure

79. Tenure Management Resources Available Tools Information PTS Web
Information Letters
Referral Maps, Sales Notices, Results Notices
“Other Publications”
Subscriptions by
Tools
PTS Web
PTO: online Postings and Mapping
ePayments

80. Online Tools – Titles Home
Subscription Services ( )
Posting Maps
Sale Notices
Sale Results
Info Letters
Acts & Regs
Publications
PTO & PTS Web
ePayments
This really is the ONE resource you can’t do without, because it leads to almost all the other resources you’ll ever need to manage your tenure. What’s all here?
On centre stage are instructions for subscribing to our distribution lists. There are currently 3 lists: Sale Notices, Sale Results, and Information Letters. Once you are subscribed to any or all of these lists, you will receive an copy of the relevant documents the moment they become public.
On the left of the OGTB home page is a white banner with a list of links. These links lead to the bulk of the resources you’ll need so we advise everyone to make bookmark this page.

81. Online Resources Petroleum Titles Online (PTO) ePayments PTS Web
ePayments
PTS Web
From PTO home, click “Title Searches (PTS Web)” link
If you’re like me at all, you’ll like to set up shortcuts directly to what you need, rather than click through a mess of links
Here are some key URLs you can use to shortcut around the OGTB home page.
Included here are the SUPPORT addresses you can send your questions, comments, and complaints to. Each of these addresses is monitored daily, so if you have a technical problem with any of the three services, please use these addresses to report the problem.

82. Title Documents

83. Description Amendments
TITLE: DL DRILLING LICENCE
DESCRIPTION AMENDMENT DATE : 2006-OCT-24
AMENDED DESCRIPTION
TRACT 1
NTS 094-P-10 BLK A UNITS 94 95
NTS 094-P-10 BLK H UNITS 4 5
INC : PETROLEUM AND NATURAL GAS
DOWN TO BASE OF JEAN MARIE ZONE
20002 JEAN MARIE ZONE DEFINED IN THE INTERVAL
4140.2' ' ON THE BHC SONIC LOG OF THE WELL
W.A A-85-G/94-P-07.
NO FURTHER TRACTS
CONTAINING HECTARES
DATED AT VICTORIA, BRITISH COLUMBIA
2006-OCT-24
THE DIRECTOR, ON BEHALF OF
THE MINISTER OF ENERGY, MINES AND PETROLEUM RESOURCES

84. Acts and Regulations Petroleum and Natural Gas Act Grid Regulation
Drilling Licence Regulation
Fee, Rental and Work Requirement Regulation
Storage Reservoir Regulation

85. Tenure Management + Time Things to Manage Land Zones Fluids Size
Ownership
+ Time

86. Land Survey Systems
Dominion Land Survey (DLS)
Petroleum Grid (NTS)

87. DLS PNG Grid Regulation Schedule 1 Familiar divisions: But in B.C…
LSD – Section – Township – Range – Meridian
But in B.C…
Legal Areas (for rent) defined by published map
“Peace River Block Gas Spacing Units and Hectarage Map”
Peace River Block
TWPs
RGEs 13 – 26 W6M

88. DLS

89. Petroleum Grid (NTS) PNG Grid Regulation Schedule 3
Applies everywhere the DLS does not
Based on longitude and latitude
Sub-divisions achieve oil and gas spacing areas similar in size to DLS
Areas taken from lookup tables
Also for geothermal and coal tenures

90. Petroleum Grid (NTS)
8° long.
4° lat.

91. Petroleum Grid (NTS) d-010-A/094-H-16 094-H-16 Blk A Unit 10
Well location example:
d-010-A/094-H-16
Title description example:
094-H-16 Blk A Unit 10

92. Normal Spacing – NTS

93. Other-than-Normal Spacing
Drilling and Production Regulation
Administered and declared by the OGC
Generally larger than normal spacing areas
Some are already declared
Peace River Block – Petroleum Grid
BC – YT, NWT, AB boundaries
BC – USA
Protected Areas
1 OTN gas spacing = 1 gas spacing for calculating earnings from Drilling Licences
Alternatives
Good Engineering Practice (GEP)

94. Other-than-Normal Spacing

95. Other-than-Normal Spacing

96. Other-than-Normal Spacing

97. Decoding Wells Well Authorizations (WA) Well Names
Simple 5-digit number assigned to each well license the OGC issues
Well Names
Consists of: “Operator”, (“HZ”), “Field”, “Surface Location”, (“Exceptions”)
DLS sample: BRC HTR BRASSEY , A
NTS sample: ECAOG HZ SPRUCE b-013-D/094-I-16, b-A013-D/094-I-16
Unique Well Identifiers (UWI)
A 16-digit well identifier issued at spud
New UWIs added for subsequent drilling and completion events
DLS: W603
NTS: 200D024H094H1604
Digit 1: DLS or NTS
Digits 2-3: surface event sequence; see “exceptions” in well names
Digits 4-14: Approved or actual bottom-hole location
Digits 15-16: drilling or completion event sequence
First completion event in a drilling event gets same UWI as its drilling event

98. BC’s PNG Zone System Zones are packages of one or more formations
Defined by specific intervals on reference well logs
Zone boundaries are carefully selected to avoid disputes; widespread markers in non- productive strata
5-digit code and (often hyphenated) zone names
34002 Artex-Halfway-Doig
33012 Montney (excluding Basal Lag)
15401 Muskwa-Otter Park-Klua-Evie
Zone code and name
Digits 1-3: relative stratigraphic position
Digits 4-5: geographic identifier
Numbers increase from bottom to top
Download from “Other Publications” page

99. Zone? Pool? Formation?
Zones are geographically constrained packages of one or more geological formations
Pools are instances of specific formations
Land plats depict eligible spacing areas within specific formations and tenure areas
Leases
Prove a formation; continue a zone
Drilling Licences
Evaluate a formation; earn a zone (maybe)
Rights usually described in relation to a zone base, e.g.:
PNG Down to Base (from surface)
NG In 36002
PET From Base To Base 36002
PNG Below Base 36002

100. Tenure Size (hectares)
All tenure rentals are based on area, measured in whole hectares
Petroleum Grid (NTS) Unit
“NTS Unit Areas” (download)
Crown Publications map GM15
For NWT/YT and other boundary areas, call us
Peace River Block (DLS)
Crown Publications map GM14 (2 sheets)
Includes size of fractional spacing's on NTS/DLS boundary
Depicts lands in other-than-normal spacing areas
Regardless of source, calculate area the same
Sum individual unit areas in title, keep intermediate fractions
Round sum to nearest whole hectare

101. Tenure Size – NTS
Usage; find the area of units of Block E in 094-H-06
Map 94 EFGH
Sheet 5 to 8
Block E F G H
Unit 41-50
Total: 6 X 69.8 or ha.

102. Tenure Size – DLS Fractional spacing areas are predefined
Whole spacing areas are defined or inferred
Usage; find the area inside the OTN GSA and sec
OTN: or ha.
Sec : 263.9
Total: ha.

103. Permits

104. Main Features A right to explore for oil and gas
Available only by Crown sale
Postings up to one NTS block accepted, with cause
Requires annual exploration spending
Actual exploration or cash-in-lieu payments
One year initial term; renewable from 4 to 7 times
Permit Class
Determines work requirements, rent, and renewal options
Class B most likely

105. Permit Renewals Four to seven renewals (Class B)
Annual application required to renew
3 ways to obtain renewal approval
By affidavit of expenditures for work done
By cash-in-lieu of work not done
By refundable deposit and work commitment
May surrender all or part of a Permit at renewal
Payment of applicable rent, fees, deposits, and penalties within 60 days after expiry

106. Permits - Rent and Work Requirements

107. Permits – Lease Selection
Fifth year work requirement must be met (Class B)
Up to 50% of the Permit area is convertible
Leases must be configured, where possible, with 4 sides in 1 of 6 shapes defined by NTS units, and
Shapes must coincide with gas spacing areas
Leases must corner other leases, or be separated by at least 2 NTS units
Exceptions made to reach 50% of Permit area
No splitting of gas spacing areas
Exceptions are available where Permit shape or location prevents 50% rule, but in no case will any one Lease exceed 9 GSUs

108. Permits – Lease Selection
Available lease configuration options, i.e., shapes
Exceptions may be considered if 50% rule cannot be met with these configurations

109. Drilling Licences

110. Main Features A right to explore for oil and gas by drilling wells
Not a right to take production; but testing OK
Acquired only from Crown Sale
Postings: 1 – 36 gas spacing areas
Term is 3, 4, or 5 years; depends on “Area”
Term may be extended, at least once, more depending on circumstances
Splits not allowed; but partial surrenders OK
Convertible to Lease by drilling or grouping

111. Term Extensions Section 3(5) - “Standard Extension”
Available after expiry or other extension
Available once only
Pre-requisite for some other extension types
One year
$500 fee; double rent ($7/ha)
Application
Due by expiry date
Apply using ePayments

112. Term Extensions Section 3(5.1) - “Special Extension”
Available after term expiry or another extension
Renewable, if delay persists and Director approves
Requires:
WA application be filed with OGC at least 30 days before expiry
Start of drilling is delayed past term expiry or extension by one of:
Environmental or socio-economic study
Public hearing
Planning or consultation process
May include DLs that would otherwise be grouped
One year, or less
Application
Application due by expiry date
No extra fee
Normal DL rent ($3.50/ha)

113. Term Extensions Section 3(5.3) - “Coal Bed Gas”
Applications must be sent before expiry
Applies only to land and rights within a coalbed gas project approved by the OGC under s.75 of OGAA
May be used 5 times after both the primary term and an "automatic" extension have expired

114. Term Extensions Sections 3(7), 3(9), 3(10) - “Drilling past expiry”
Available only after the standard extension, s.3(5)
Extends term to the date a rig is released from drilling operations
Drilling must be:
Past 150m at midnight on expiry date
Conducted “diligently”
Rig may be withdrawn during drilling interruptions due to road bans or unsafe working conditions, e.g., avalanche hazard
No other well may be started during extension, except in the event of mechanical failures in the first well
Other DLs grouped with extended DL are extended to same date

115. Grouping One Group per Earning Well Criteria for inclusion:
In the opinion of the Director, an "earning" well exists or has been spudded on one of the DLs to be grouped
All DLs to be grouped lie within 4 km. of the DL with the earning well
Use scaled map, GIS, PTO Viewer
Call to receive written verification
Written application and ePayment submission sent before earliest expiring DL
Written authority of one titleholder of each DL if applicant is not the Payor or a titleholder of all DLs

116. Grouping Maximum Number of DLs in a Group
Depends on number of whole gas spacing areas in DLs to be grouped at time of issue
If any one DL had more than four gas spacing areas, the maximum is two DLs in the group
Otherwise, number limited only by distance from DL with earning well, i.e., 4 km. rule always applies
Rules aim for tighter link of risk to reward

117. Why Small DL Grouping?
3,500m
3,500m

118. Grouping – Distance Guide
Four NTS Units or DLS quarter-sections are always less than 4 kilometres when measured directly north- south or east-west
For all other circumstances, use caution, i.e. GIS:
Shortest distance is a diagonal line
Shortest distance is E-W or N-S, but across the DLS/NTS boundary

119. Lease Earnings Awarded in terms of gas spacing areas and zones
GSAs awarded depends on:
Prescribed Area of DL
When DL spans two or more Areas, earnings are based on the Area with the greatest earnings
When well penetrates 2 or more DLs, applicant nominates one DL to the ‘drilled’ DL for both earnings and grouping eligibility
Combined length of drilling events
Less any length drilled through rights held by lease that are not necessary for the purpose of evaluating the DL
Zones awarded are to base of deepest zone "evaluated”
Evaluated = “significant” new geological information
Verifies existence of new hydrocarbon-bearing reservoir
Establish that a known reservoir is wet or absent
Establish the sedimentological or structural characterization of a zone in a new area

120. DL Term and Earnings

121. DL Term and Earnings Download from: Info Letter TITLES-05-03
“NEBC DL Boundary .pdf Map”
Wall size; print with plotter

122. When is a Zone “evaluated”?
High
‘Significance’ of info rises with:
Quality and variety of information collected, and
Proportion of zone evaluated, and
Distance from comparable plays
Significant New Geological Information Collected
Low
Low
High
Certainty of Earning the Zone

123. Earning Wells Definition before August 20, 2009 remains in force
"A well drilled in a spacing area all or part of which is in a location described in a drilling licence, and includes a well redrilled in a spacing area formerly described in a
(a) permit,
(b) drilling licence, or
(c) lease
... no longer in effect"
A "redrilled" well includes a "recompleted" well
If the completion is over an interval not previously completed, or, if previously completed, it will provide significant new information

124. Earning Wells Amendments of August 20, 2009
Wellbore must be first to evaluate a particular zone on at least one spacing area
One well may be first to evaluate several spacing areas
Evaluation is deemed to have occurred when either:
150m of wellbore has been drilled in a spacing area, or
the Director is satisfied the well evaluates the zone first

125. Earning Well – Off DL
Drilling Licence
Lease
Yes

126. Earning Well Scenario A1
Spacing Area 1
Spacing Area 2

127. Earning Well Scenario A1 2 2
Spacing Area 1
Spacing Area 2

128. Earning Well Scenario B2 1 ?
Spacing Area 1
Spacing Area 2

129. Earning Well Scenario B1 2
Spacing Area 1
Spacing Area 2

130. Earning Well Scenario C
DL 1
DL 2
Wells penetrate identical zones 1 2
Spacing Area 1
Spacing Area 2

131. Earning Well Scenario C
1 or 2
DL 1
DL 2

132. Lease Selection Applications
e-Payments Submission THEN Application Letter
add Letter of Authority if neither Payor nor Titleholder
Include e-Payments Submission number in subject line
Letter must include, for each earning well:
Name and OGC Well Authorization (WA)
Estimated total eligible wellbore length
Enclose the directional survey where applicable
Estimated earnings (gas spacing areas)
Statement of deepest evaluated formation or zone
Desired configuration of Leases
Earnings from two or more WAs may be combined
Use legal descriptions that match formats used in the Drilling Licence

133. Lease Configuration
The number and location of selected Leases are up to the applicant, except Leases must:
include all spacing areas to be placed on production
be located entirely within one DL
contain only contiguous tracts
not result in split gas spacing areas (oil wells excepted)

134. Leases

135. Leases A right to explore for and produce oil and gas Available from
Crown Sale
Max. posting is 1 GSU
Converting Permits and Drilling Licences
Split from another Lease (transfer)
May be continued beyond term

136. Leases – 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!

137. Leases – Continuations
Several forms
Section 62
Section 61
Section 61,1 (rights revert – zone specific)
Section 58 (rights revert – deep or specific)
One year, in all cases
Download from “Other Publications”:
“Lease Continuation Options”
"Recommended Technical Package Contents"

138. s. 62 Continuation Continuation by payment
Year 1 $15.00 / Ha
Years 2 or 3 $25.00 / Ha
Available three times for any 10-year Lease
No rights reversion
Need not be used in consecutive years
Application made through ePayments
Use the statement when no other continuation types are anticipated for the Lease, or
Use submission and written application when other continuation types (splits) are anticipated or desired for the Lease

139. s. 61 Continuation Continuation by drilling commitment
Drill at least one well on location of Lease during continuation that evaluates at least one zone held by that Lease
Drilling past expiry OK, but must make best effort to reach target zone(s) named in Well Authorization
Available for any Lease
No rights reversion
May be used more than once, but spacing area(s) of successful commitment wells will be split out under s.58
Applies only to Lease(s) being drilled
Applications made through e-Payments
Must make Submission and written application

140. s Continuation
a.k.a. 61W
Continues spacing areas in relation to existing and planned disposal operations
e.g. water, CO2, 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

141. s. 58 Continuation Four types of continuation:
58(3)(a): Eligible Spacing Areas
58(3)(b): Unit agreements
58(3)(c): Work programs
58(3)(d): Establishing a well
All s.58 continuations subject to rights reversion, deep or specific zones (s.59)
Leases approved under two or more s.58 sub- section may have to be split

142. s. 58 Continuation
s. 58(3)(a) – Eligible spacing areas are spacing areas that:
Contain a “petroleum” or “gas” well
Are located in a project area approved by the OGC under s.75 of the Oil and Gas Activities Act
Are >50% covered by a designated EMPR pools (aka: land plat)
Are being drained from an adjacent spacing area
Once approved, continuation is by rental payment until further notice

143. s. 58 Continuation Section 58(3)(b) - “unit agreements”
Spacing areas within Unit Agreements
Once approved, continuation is by rental payment until further notice
Section 58(3)(c) - “work programs”
May include multiple leases
Not intended for multi-year exploration programs, depends on circumstances (e.g., access, scope)
Section 58(3)(d) - “incomplete drilling”
The drilling of, or work on the establishment of, a well is incomplete on the expiry date
The Director is satisfied that the drilling or work will continue

144. s. 58(3)(c) General Features
May include multiple Leases, even multiple target zones, and different expiry dates
Requires written commitment to specific work
Majority are one year only; exceptions to this on a case-by-case basis, typically due to very limited access and unusually large project scope
Non-performance of commitments jeopardizes future work program approvals

145. s. 58(3)(c) Application must include: Technical package contents
The locations to be included
The formation(s) that will be delineated
A firm commitment, e.g. “XYZ Corp. commits to carry out the following program of work: . . .”
A clear depiction (map) of where the work will take place in relation to the locations to be included
A clear explanation of how the work will delineate a hydrocarbon-bearing reservoir on each spacing area
Technical package contents
must demonstrate how the work will “delineate” a field or pool
Simple – notice of a new well
Complex – interpreted seismic, X-sections, well results, etc.

146. s. 58(3)(c)
Programs with seismic components require a geophysical report at year end
Resource Document
Look for “Requirements for Affidavits and Reports” in the chapter appendix or here:

147. s. 58(3)(d)
Designed to allow leaseholders to finish “establishing” a well clearly in progress
Applies only to a single Lease
At minimum, must have Well Authorization before expiry
Estimated rig release date well past expiry
60 days to make any s. 58 application, but
We encourage s. 58(3)(a) within 60 days where possible
More scrutiny if well not spud by expiry
All rights below the base of the deepest objective zone named in the Well Authorization (WA) are subject to rights reversion, deep or specific

148. PART 3 Payments & Instruments

149. ePayments
Contacts:
Carolyn Desjardins – (250) –
Brenda Jennings – (250) –
Shawna Logue (250) –

150. ePayments Mandatory – October 2009
Online statements, payments, and receipts
Client initiates payment – NOT Auto Debit
Payments associated with Rent and Fees for lease selections, extensions, continuations and primary term annual rentals
Electronic refunds – Mandatory Oct. 1, 2010
NOT included in ePayments – requires cheque
Split Transfers
Permits
OIC - S 72 Agreements
Underground Storage Leases/Licences

151. BCeID is a Portal or Passport
Petroleum Titles Online
Integrated Land Mgmt Registry
Mineral Titles Online
BCeID
Titles, Aboriginal & Corporate Relations Division assigns Subscription Code
BCeID is a Portal, or Passport, to all online systems in the BC Government. You need a Unique BCeID, under your corporate umbrella, to access any of these online systems.
ePayments is just one of these online systems that you need a BCeID Username for, whenever you want to access it.
BCeID is an entity that assigns BCeID’s.
The Titles, Aboriginal & Corporate Relations Division is a separate entity that will assign your Company Administrator a Subscription Code for entry into its online ePayments system.
ePayments
GATOR
Crown Land
Corporate Registries

152. Obtain a BCeID
If you are not sure if your company has a BCeID, go to the BCeID website and click on ‘Is My Business Already Registered’.
From there, type in your company name and click on Search.
If your company is registered, the name of your BCeID Profile or Account Manager will appear.
If you are the Company Administrator, contact that person to obtain a unique BCeID Username and Password for each person who will be accessing ePayments.
If your company is not registered, you will need to appoint a Profile Manager (could be your Company Administrator) and request a registration package be sent to your company headquarters for completion and submission to BCeID.
Your BCeID corporate registration package will be sent to your corporate headquarter in BC, which could be a lawyer’s office.
If you are the BCeID business profile or account manager, you will need to let them know the package is coming, so they will know what to do with it.
If you are the BCeID business profile or account manager, you will also need to follow-up to make sure the documentation gets completed and sent back to BCeID, so your Company Administrator can get your BCeID Usernames and Passwords.
Once you receive confirmation your company is registered, your BCeID business profile or account manager will assign unique BCeID Usernames and passwords – first to your Company Administrator, then to all the other Users who will require access to ePayments.
Individual BCeID’s, not under the corporate umbrella, are not acceptable for using ePayments.

153. BCeID
Do not share your BCeID password with anyone except the Company Administrator
Sharing BCeID Passwords means you are not using the system securely
You can identify who makes transactions by their BCeID for audit purposes
You will need to share your BCeID Username with your Company Administrator, so they can add you to ePayments.
You should not share your password with anyone.
If you are sharing passwords, you are not using the system securely and you will not be able to identify who conducted transactions in ePayments.
This information is not readily available to the client, but can be obtained by contacting the Ministry, should an occasion arise where it is necessary to obtain that information.
Also, when someone leaves your company that has your username and password, you cannot prevent them from accessing your company’s information on ePayments until you change the password. This leaves your company’s confidential information vulnerable.

154. ePayments - Next Steps You have your BCeID...
Company Administrator requests subscription code
Receives code then signs onto ePayments main page
Enter subscription code
Add other authorized user’s
If you are going to be a payor on titles you will need to submit Pre-authorized Debit forms
Rental and Fee PAD
Rental and Fee PAD for refunds
A BCeID, subscription code and PAD forms are required for each of your company entities
Epayments administrator should be someone who is involved in the day to day land administration functions.

155. ePayments – User Roles BCeID Profile Manager Applies for BCeID
Appointments Company Administrator
Company ePayments Administrator
Assigns roles to other users; can view, add or change banking information; can perform all functions
Payment Administrators
Make the actual payments
Land Administrators
Initiate submissions to continue titles beyond their primary term and convert drilling licences to lease
Viewers
View Only access – financial and/or senior staff that are not required to conduct transactions
Let’s review the User Roles you can have in ePayments.
Beginning with the Company Administrator, who not only has the authority to assign roles to other users, they have the authority to conduct any required function in ePayments.
If you are the Company Administrator for your company and there are no other members in your payment team, you do not need to assign yourself other roles.
You can do everything as the Company Administrator.
The Payment Administrators make the actual payments and you can have as many Payment Administrators as you need.
The Land Administrators create Submissions to continue titles beyond their initial term, convert drilling licences to lease and authorize the Payment Administrator to make payments from Statements.
You can have as many Land Administrator roles as your team requires.
Viewers have view only access. This role would likely be assigned to management and accounts staff who only require the ability to view and print reports.
If you need to be assigned both Payment Administrator and Land Administrator roles, that can be done too. When you log on, using your BCeID username, you will be asked to choose which role you wish to work under.

156. ePayments - Designated Payor
Companies will need to designate payor on all title they have ownership in
Payor’s cannot be designated 11 days prior to the anniversary date and 60 days after
Any registered owner or designated payor can nominate a designated payor
Crown Sale, bid letter must include who will be the designated payor for future rental payments
When a title is issued by other means, the Designated Payor is defaulted to the registered Owner with the highest interest
In the case of 50/50, the decision will be made alphabetically
Let’s talk about the concept of a Designated Payor.
There was much discussion as to who should be the Designated Payor in ePayments and whether there should even be a Designated Payor.
While the Ministry will accept payment from any party, the Ministry also requires that only one party make payment on a title, to avoid duplicate payments, so that limited the concept to a Designated Payor.
As to who that should be, there was also much debate.
After several discussions, the Industry Working Group and the Ministry agreed that any registered Owner or Designated Payor can nominate a Designated Payor. This rule was created to satisfy and offer flexibility for different requests from different companies.
The Designated Payor is the party to whom the registered Owner gives the right and responsibility for making payments and making decisions on payments, continuations beyond primary term, converting drilling licences to lease and cancelling titles to.
If a registered Owner does not want a 3rd party to make these decisions, they should appoint themselves as the Designated Payor.
If there is more than one Owner, you will have to reach the decision between yourselves.
The Ministry will not decide for you, but upon issuance of a title the Designated Payor responsibility may default to the Owner with the Highest interest, or in the case of equal interests, alphabetically, unless otherwise instructed by a registered Owner.

157. Primary Term Continuation Conversion
Payment Types
Primary Term Continuation Conversion

158. All Titles Screen
To view all the titles you are a registered Owner and/or Payor of, click on Titles
The All Titles page is a LIST of titles you are either an Owner or a registered Payor of. It is not a Statement and you do NOT make payments from this screen, but you will want to use this page to make sure ePayments is listing all your titles.
If you don’t see a title and think it should be there, ask yourself if you are the registered owner or if a Broker is.
That could be why you’re not seeing it.
If your company should be the Payor and isn’t, contact your Broker or the Registered Owner at least 15 days before the anniversary date of the title and ask to be nominated as the Designated Payor. You will have to talk to each other. We will talk about the concept of a Designated Payor in the detailed review.

159. Managing Expiring Titles

160. Statement Types Primary Term Statement
Continuation/Extension Statement
Submission Request Statement
The Statements were divided into three unique sub-sets - Primary Term, Continuation/Extension and Submission Request Statements - to allow Payment Administrators to manage their titles more efficiently and with greater clarity.
The Industry Working Group requested the original Current Statement be divided into three statements, rather than two for Phase 2, to distinguish titles being continued by way of a payment from those being continued by way of a Submission or application.
We will be talking about the concept of a Submission in the detailed review, but for now let’s give everyone a brief definition.
Remember that all three Statements must be viewed and, if necessary, paid each month.

161. Primary Term Statement
Unpaid titles, Carried Forward from the Previous Statement, appear under the red heading bar.
Unpaid titles that are part of the Current Statement appear under the blue heading bar.
There are two different coloured header bars in the Primary Term Statement.
You may find that, if you are paying several months in advance, you may never see a red header bar.
If you are paying only one month in advance, you will always be paying the titles that are under the red header bar.
It all depends on your internal process and requirements.
Just keep in mind that titles paid after their anniversary date will be subject to late payment penalties, just like before ePayments.
The Primary Term Statement displays all titles within their primary term that you are the Designated Payor of. If you are the registered Owner of a title, but not the Designated Payor, you won’t see the title on your Primary Term Statement. You must be the Designated Payor to pay it.
Every ePayments User within your company will be given 150 days, or 5 months, notice of what primary term titles are owed, prior to the anniversary date of every title you are a Payor of.
The Statement is always available for viewing and you will be reminded at the beginning of each month to view and pay it.
To pay all of your primary term titles from the Statement, click on the Select All checkbox at the left of the header line – either red or blue. The Select All checkbox will be disabled if not all titles are available to be checked. This would occur, for example, if some titles are already part of a Pending Payment.

162. Continuation Submission
From the Managing Expiring Titles screen
We Create a Continuation/Extension Submission from the Manage Expiring Titles screen. Again, we will be going over this in the Detailed Review. This is just a screen shot to give you a general overview of the screens available in ePayments.

163. Items to Remember
Submission’s should contain titles that are linked geologically or geographically and share a common technical package
Confirm payment is made (Payment Acknowledgement No.)
Submit letter and technical package
Include submission number in your application letter

164. Convert to Lease Submission
From the All Titles screen
1. Check Title 
2. Click on Create Pending Submission
Create a Convert Drilling Licence to Lease Submission from the All Titles screen by clicking on the drop-down list and clicking on Convert to Lease
The data table will display all titles that are eligible to be converted to Lease.
They will all be drilling licences.
Check the title or titles you wish to convert
Click on Create Pending Submission
REMEMBER: When you are creating a Conversion Submission, you are calculating and making payment on the ‘child’ leases only. Continuation of the remainder of the parent DL [if there is anything remaining] must be done under a separate submission or from the Continuation/Extension Statement.
We will talk about groupings separately.

165. Convert to Lease Submission
You can adjust the Hectares
All fees will be calculated
Your Pending Submission Number will appear
Your Pending Submission Number will appear
The type of submission will be displayed - Conversion
The fees associated with each title will appear
From here you can edit the Submission by adding another title,
Deleting a checked title, or
Deleting the entire Pending Submission, if you decide to start over
You can add another child lease from a checked title by checking it and clicking on Add Lease to Checked Title.
You can also add another Parent title to the Submission and subsequent child titles to that parent
You MUST click on the Save Modified Pending Submission button to Save your Submission, before you close the screen, or the titles will be locked and you not be able to return to the submission. It may mean a telephone call to the Ministry to get them unlocked.

166. Groupings
For each Grouping, whether 2 drilling licences or a cluster of drilling licences, they should go together in the same Submission, if they’re related
If the Groupings are not related, they should be in separate Submissions.

167. Groupings – 2 DLs
Two DL’s grouped together should be submitted as one Submission
DL 1
DL 2

168. Groupings – Cluster (all within 4 km of each other)
DL 5
DL 4
DL 1
DL 3
Multiple DL groupings that have a DL that is used more than once should be submitted as one Submission
In this example, All of these DLs are related somehow because of the way they are grouped.
They should be included in one Submission. Grouping DL’s relates them.
You could group DL 1 with DL 3; DL 3 with DL 4; DL 1 with DL 2; DL 1 with DL 6; DL 2 with DL 6; and DL 4 with DL 5. They are all related somehow and should therefore be in One Submission.
You could ultimately end up with 6 leases - one from each of these drilling licences, because you have 6 earning wells.
If you send in a Submission on DL 1 and DL 3, you cannot follow it with a separate submission involving either DL 1 or DL 3. Once a title is part of a Submission, it cannot be part of another Submission. You must submit them all under one Submission.
The entire paper application has to come in as one too. You should not send it in separate packages. It must come in at the same time as a cluster. If anything is ‘missing’ from your Submission, we can’t process it.
Also important to note is that BOTH the payment and the paper documentation for your application must be in the Ministry’s office by midnight of the expiry date on the earliest expiring drilling licence, or before a well on one of the DL’s goes on production. This is no different from prior to ePayments.
Your Submission Number must be included with your paper application, so the Ministry can match your application to the payment made in ePayments.
DL 2
DL 6

169. Continuing your Tenure
Continuation/Extension
(Managing Expiring Titles Screen)
NO Paper Application Required
Types of Payments
Final Year–Primary Term–10
year - When applying for
Section 62
58 A, B and 61.1 (repeat only)
62 (1, 2, 3)
Drilling Licence Extension 3.5
Submission
(All Titles Screen)
Paper Application Required
Final Year–Primary Term-5 year
58A & B – 1st year
58A–no longer eligible–continue under other section
58C & D, 61
DL extension 3(5.1) Environmental – 1st year
DL extension 3(5.3) Coalbed Methane – 1st year
Lease Selections (conversion)

170. RECAP
Continuation/Extension Submission Create from: Manage Expiring Titles
Conversion Submission Create from: All Titles
Continuation/Extension Submissions are always created from the Manage Expiring Titles screen.
Conversion Submissions are always created from the All Titles screen.
Remember to write the submission number on the written application before submitting to the Ministry.
Include Submission Number on Written Application

171. Managing Rental Deadlines
Default Notices eliminated July 1, 2010
Manage titles from the All Titles screen
Epayments sends you a monthly reminder to view your statements
Overdue titles are shown in purple and fall off ePayments on day 60 past expiry
Default letters became a thing of the past, effective July 1, 2010
If you want, you’ll be able to go online every single day to view what titles are due, for how much and when.
Your Statements are available for viewing any time.
You will receive a monthly reminder to view them, but you can look at them as many times as you want, whenever you want.
The Ministry will continue to send a cancellation letter to all registered Owners, after a title has been cancelled.
You may or may not receive a courtesy call before the 60-day period. Don’t rely on it.

172. Late Penalties
Late penalties are automatically calculated once the anniversary date has passed
Permits (Manual Payment)
Day 1-10 $100.00
Day $500.00
Leases
Day %
Day – 3.0 %
Drilling Licence
Day 1-60 $500.00
Should the time between when you create your Pending Payment and when you return to epayments to Make Payment be long enough, late penalties may be incurred and calculated into your Pending Payment.
ePayments will calculate these late penalties itself and add them to your Pending Payment.
You have no choice but to pay them because you cannot pay them separately.
If you are paying far enough in advance, this should not be an issue.
However, if it is….

173. Cancellations Request from All Titles screen
Ministry will cancel 60 days after anniversary date and send confirmation
Check title to be cancelled
Can be reversed by selecting title and hitting Cancel Request
ministry to confirm reversal
Manual letters for titles not included in ePayments
Page 173.

174. Letters of Authority
Letter of Authorization’s are needed when you are neither a owner or payor
Required for Titles not covered by ePayments
The registered Owner’s intent is implied by authorizing the Designated Payor to make decisions on the title
This is probably a good time to talk about Letters of Authority.
Letters of Authority for Section 62 continuation of leases and 1 year extensions of drilling licences and any title added to the Continuation/Extension Statement and paid through the Statement will not be required.
For Submissions, as long as the Designated Payor submits both the payment and backup documentation, Letters of Authority will not be required.
By nominating a Designated Payor, you are giving them the authority to make decisions on the title.
If you, as a registered Owner, are not comfortable with that authority being held by another party, then nominate your company as the Designated Payor.
This includes Letters of Authority for: 58A first year, 58C, 58D, 61, 62’s, drilling licence 1 year extensions, environmental and coalbed methane extensions and lease selections.
If a party, other than the Designated Payor, sends in backup documentation for a Submission, a Letter of Authority may be required.
Please refer to the Quick Reference sheet to determine if an LOA is required.

175. Training Information Self-Tutoring Online: Modular Self-paced
Computer-based
Getting Started, Self-Tutoring, FAQ’s & Quick Reference Tool available online
Calgary–contact CAPLA:
Victoria - contact:

176. Transfers, Encumbrances
and Related

177. Power-of-Attorney No fees required Cover letter is required
Power of Attorney documents should have original signatures or be a Certified True Copy
The document must clearly state the types of document that the person/position is authorized to sign on behalf of the company
A registration number will be assigned to the company upon the initial registration, this number will be used for all future registrations

178. Partnerships Permitted to hold title in BC
Partnership needs to provide documentation showing the partnership structure
Documentation must be signed by all parties of the partnership
Contact Oil & Gas Commission to confirm requirements to licence well

179. Title Transfers No fees required Cover letter must accompany documents
Transfers are considered effective from the date received, not the execution date
Stale-dated transfers are acceptable
Changes are recorded against title specified in the document
Only transfers of undivided interest are permissible
Signatures in counterpart are acceptable
Any color ink acceptable for signatures
Electronic Signatures and signature stamps are not acceptable
Page 179.

180. Title Transfers Transfer documents must:
Be originals
List all title numbers to be transferred
Be executed by all transferors and all transferees
Subsequent edits must be initialled by all parties
A properly “executed” document is:
Dated, and
Signed by a signing officer of the firm or by a person with a Power of Attorney registered with Titles, Aboriginal and Corporate Relations Division, and
Witnessed or affixed with a corporate seal

181. Title Transfers
Schedules are permitted and should include only the title number and the company reference number
Transfer documents must specify interest as a percentage of the undivided interest
8 decimal places (max)
Interests displayed as percentages of percentages are not acceptable:
Interest amounts are not required on transfer of all a companies interest in a title
45% of their 50% interest = 22.5%
We would need to see 22.5% undivided interest

182. Title Transfers
Sample forms available from the Division website, no prescribed form necessary
Information Letter EMD-008
Must not contain implied or explicit encumbrances, eg: “subject to” clause
Do not send title documents with your transfer request
Use full legal name of companies
If legal descriptions must be included for corporate reasons, they:
Must be identical to registered legal description
Must include complete tract rights
Page 182.

183. Split Transfers
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

184. Split Transfers
All criteria applicable to simple transfers are applicable to split transfers, plus:
“in and to a portion of….” must be used on the transfer documents”
Legal descriptions of the transferred portion, including the rights held by that portion, must be specified
Must not divide gas spacing areas containing gas wells
May divide gas spacing areas if:
Contains an oil well; or
Spacing area already split
Page 184.

185. Pooling Agreements Purpose – joint development of a spacing area
Recorded in the Oil and Gas Titles Branch
Letter contents:
Name all title holders
Title numbers
Well authorization No.
UWI of well
Date of Pooling Agreement
Signature of all title holders

186. Encumbrances 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

187. Recording Encumbrances
Requests must include:
Letter of instruction and fee
State the type of encumbrance
State the full legal names of the companies involved
Encumbrance document
Original or certified true copy
Document must be dated and signed by a signing officer of the company holding the encumbrance
Fee:
$50.00 per title per encumbrance, includes discharge

188. Discharging Encumbrances
Requests must:
Be dated and signed by a signing officer of the company holding the encumbrance
Include original encumbrance registration numbers
State the type of encumbrance
State full legal names of the companies named in the encumbrance
Include the date of the original encumbrance registration
Include the date of the encumbrance
Indicate if the discharge is full or partial
List only active title numbers to be discharged
Original signatures or certified true copy
Each encumbrance must be discharged with a separate document

189. Copies of Encumbrances
Requests for copies of encumbrances can be sent by fax
Fax: (250)
Send to Attention of : Diane Jensen
Fees – minimum charge of $10.00, or .75 cents per page whichever is greater, an invoice will be sent with the documents
We copy the first 10 pages of the documents and the signature page only, due to the size of some encumbrance documents
Return by fax or up to 50 pages, by collect courier or mail – include your courier name and account number with your request

190. Name Changes & Amalgamations
Requests must include:
May be sent by mail, fax or
Letter or request
Copy of certificate and articles of amendment, photocopies are 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

191. Signed Title Searches Available if required
Send request via fax or mail to Diane Jensen
Results can be delivered by:
Fax or – up to 50 pages
Mail
Courier (sent collect)
Fees $7.50 per title number
Invoice will be returned with request

192. PTS Web Search www.ptonline.gov.bc.ca Title number and type
Term and Area
Key Dates: Issuance, Effective, Expiry
Tracts – Lands and Rights held
Ownership
Continuation History
Transfer History
Encumbrance History
Special Projects, Wells, Units, Groupings

193. THANK YOU ! Laurel Nash 952-0335 Christine McCarthy Terry Branscombe
GENERAL INQUIRIES
Phone .