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BC Tenure Regulations CAPL

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Presentation on theme: "BC Tenure Regulations CAPL"— Presentation transcript:

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:



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.

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:


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)

47 Caveat Examples Caveat – near community/residential area (example)

48 Caveat Examples Caveats – in the Horn River (examples)

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


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

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.


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

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 A
1 Spacing Area 1 Spacing Area 2

127 Earning Well Scenario A
1 2 2 Spacing Area 1 Spacing Area 2

128 Earning Well Scenario B
2 1 ? Spacing Area 1 Spacing Area 2

129 Earning Well Scenario B
1 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 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

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