Canada Oil and Gas Operations Act (R.S.C., 1985, c. O-7)

Act current to 2017-09-27 and last amended on 2016-06-19. Previous Versions

Marginal note:Hearing on application
  •  (1) Where an application made under section 39 is referred by the Minister to the Committee, the Committee shall hold a hearing thereon at which all interested persons shall be afforded an opportunity to be heard.

  • Marginal note:Unitization order

    (2) If the Committee finds that

    • (a) at the date of the commencement of a hearing referred to in subsection (1)

      • (i) the unit agreement and the unit operating agreement have been executed by one or more working interest owners who own in the aggregate sixty-five per cent or more of the total working interests in the unit area, and

      • (ii) the unit agreement has been executed by one or more royalty owners who own in the aggregate sixty-five per cent or more of the total royalty interests in the unit area, and

    • (b) the unitization order applied for would accomplish the more efficient or more economical production of oil or gas or both from the unitized zone,

    the Committee may order

    • (c) that the unit agreement be a valid contract enuring to the benefit of all the royalty owners and working interest owners in the unit area and binding on and enforceable against all such owners, and

    • (d) that the unit operating agreement be a valid contract enuring to the benefit of all the working interest owners in the unit area and binding on and enforceable against all such owners,

    and, subject to section 42, the unit agreement and the unit operating agreement have the effect given them by the order of the Committee.

  • Marginal note:Variation by unitization order

    (3) In a unitization order, the Committee may vary the unit agreement or the unit operating agreement by adding provisions or by deleting or amending any provision thereof.

  • R.S., c. O-4, s. 30.
Marginal note:Effective date of unitization order
  •  (1) Subject to subsection (2), a unitization order becomes effective on the day that the Committee determines in the order, but that day shall be not less than thirty days after the day on which the order is made.

  • Marginal note:Effective date when unit agreement or unit operating agreement varied

    (2) Where a unit agreement or unit operating agreement is varied by the Committee in a unitization order, the effective date prescribed in the order shall be a date not less than thirty days following the day the order is made, but the order becomes ineffective if, before the effective date, the applicant files with the Committee a notice withdrawing the application on behalf of the working interest owners or there are filed with the Committee statements in writing objecting to the order and signed

    • (a) in the case of the unit agreement, by

      • (i) one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i), and

      • (ii) one or more royalty owners who own in the aggregate more than twenty-five per cent of the total royalty interests in the unit area and were included within the group owning sixty-five per cent or more of the total royalty interests as described in subparagraph 41(2)(a)(ii); or

    • (b) in the case of the unit operating agreement, by one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the unit area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i).

  • Marginal note:Revocation of order

    (3) Where a unitization order becomes ineffective under subsection (2), the Committee shall forthwith revoke the order.

  • R.S., 1985, c. O-7, s. 42;
  • 1992, c. 35, s. 28(E).
Marginal note:Technical defects in unitization order

 A unitization order is not invalid by reason only of the absence of notice or of any irregularities in giving notice to any owner in respect of the application for the order or any proceedings leading to the making of the order.

  • R.S., c. O-4, s. 32.
Marginal note:Amending unitization order
  •  (1) A unitization order may be amended on the application of a working interest owner, but before amending a unitization order the Committee shall hold a hearing at which all interested parties shall have an opportunity to be heard.

  • Marginal note:Voluntary proposal for amendment by owners

    (2) If the Committee finds that, at the date of the commencement of a hearing of an application for the amendment of a unitization order, one or more working interest owners who own, in the aggregate, sixty-five per cent or more of the total working interests and one or more royalty interest owners who own, in the aggregate, sixty-five per cent or more of the total royalty interests in the unit area have consented to the proposed amendment, the Committee may amend the unitization order in accordance with the amendment proposed.

  • R.S., c. O-4, s. 33.
Marginal note:Protection of tract participation ratios

 No amendment shall be made under section 44 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the commencement of the hearing, and, for the purposes of this section, the tract participations shall be those indicated in the unit agreement when it became subject to a unitization order.

  • R.S., c. O-4, s. 34.
Marginal note:Production prohibited except in accord with unitization order

 After the date on which a unitization order comes into effect and while the order remains in force, no person shall carry on any operations within the unit area for the purpose of drilling for or producing oil or gas from the unitized zone, except in accordance with the provisions of the unit agreement and the unit operating agreement.

  • R.S., c. O-4, s. 35.
Marginal note:How percentages of interests to be determined
  •  (1) The percentages of interests referred to in subsections 39(1), 41(2), 42(2) and 44(2) shall be determined

    • (a) with respect to royalty interests, on a prorated area basis; and

    • (b) with respect to working interests, on the basis of tract participations shown in the unit agreement.

  • Marginal note:Owner deemed to be royalty owner on a prorated area basis

    (2) Where a working interest in a unit tract is held as an incident of the ownership of a fee simple estate in oil or gas, the owner who holds that working interest shall, for the purposes of subsection (1), be deemed to be a royalty owner in respect of the tract on a prorated area basis under paragraph (1)(a).

  • R.S., c. O-4, s. 36;
  • 1976-77, c. 55, s. 5(E).

General

Marginal note:Pooled spacing unit included in unit area
  •  (1) A pooled spacing unit that has been pooled pursuant to a pooling order and on which a well has been drilled may be included in a unit area as a single unit tract and the Committee may make such amendments to the pooling order as it deems necessary to remove any conflict between the provisions of the pooling order and the provisions of the unit agreement, or the unit operating agreement or the unitization order, if any.

  • Marginal note:Effect of including pooled spacing unit in unit area

    (2) Where a pooled spacing unit is included in a unit area pursuant to subsection (1), the provisions of the unit agreement, the unit operating agreement and the unitization order, if any, prevail over the provisions of the pooling order in the event of a conflict.

  • Marginal note:Exceptions

    (3) Notwithstanding subsection (2),

    • (a) the share of the unit production that is allocated to the pooled spacing unit shall in turn be allocated to the separately owned tracts in the pooled spacing unit on the same basis and in the same proportion as production actually obtained from the pooled spacing unit would have been shared under the pooling order;

    • (b) the costs and expenses of the unit operation that are allocated to the pooled spacing unit shall be shared and borne by the owners of the working interests therein on the same basis and in the same proportion as would apply under the pooling order; and

    • (c) the credits allocated under a unit operating agreement to a pooled spacing unit for adjustment of investment for wells and equipment thereon shall be shared by the owners of the working interests therein in the same proportion as would apply to the sharing of production under the pooling order.

  • R.S., c. O-4, s. 37.

Straddling Resources — Inuvialuit Settlement Region

Definitions

Marginal note:Definitions

 The following definitions apply in this section and in sections 48.02 to 48.096.

notification area

zone de notification

notification area means the following:

  • (a) that part of the offshore that is situated within 20 kilometres of the onshore; and

  • (b) that part of the onshore that is situated within 20 kilometres of the offshore. (zone de notification)

offshore

région extracôtière

offshore means that part of the Inuvialuit Settlement Region that is not situated in the onshore. (région extracôtière)

  • 2014, c. 2, s. 25.
 
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