Canada Oil and Gas Drilling and Production Regulations (C.R.C., c. 1517)

• 18 (1) Within 30 days after the completion of a well or the recompletion of a well into a different producing interval or a workover operation, a report in triplicate shall be filed with the Oil Conservation Engineer on a form approved by the Chief by the permittee, lessee or his authorized agent.

• (2) Within 30 days after the initial production test following completion, recompletion or any workover operation, a supplemental well completion report in triplicate shall be filed with the Oil Conservation Engineer on an approved form.

• (3) During any period of testing as required by the Oil Conservation Engineeer following completion, recompletion or workover operation, the licensee, permittee or lessee shall report weekly, if mail service permits, in duplicate, the daily production and such report shall be specific as to the recovery of oil or gas and the period of time in which production was obtained.

Suspension of Drilling or Production

• 19 (1) The licensee, permittee or lessee shall notify the Oil Conservation Engineer by submitting notification on a form approved by the Chief in triplicate before drilling or production operations are suspended at any well.

• (2) The licensee, permittee or lessee shall comply with all precautionary measures required by the Oil Conservation Engineer.

20 The licensee, permittee or lessee shall not resume operations on any well that has been suspended without previously notifying the Oil Conservation Engineer and submitting the form approved by the Chief in triplicate.

Where Wells or Holes to Be Drilled

• 21 (1) Except with the approval of the Oil Conservation Engineer, no well shall be drilled

  • (a) within 250 feet of the outer boundaries of a leased area, any road allowance, surveyed road, railway, pipeline, high voltage power line or other right-of-way, dwelling, industrial plant, building used for military purposes, permanent farm building, school or church; or

  • (b) within 1/2 mile of any existing or proposed flightway or any airfield.

• (2) A licensee, permittee or lessee shall carry on his operations with a minimum of inconvenience and interference with existing or proposed airfields.

Well Spacing

• 22 (1) Every development well shall be drilled

  • (a) within a target area; or

  • (b) in such manner as will permit the well to be drilled into a target area before being completed.

• (2) The Chief may designate a grid area as a well spacing area and no person shall drill a well within a well spacing area except within a target area approved by the Chief.

Oil and Gas to Be Conserved

23 Whenever a stratum penetrated in a well or structure test hole is capable of producing gas, the licensee, permittee or lessee shall take all reasonable precautions and confine such gas to its original stratum until such time when such gas can be produced and utilized without waste.

• 24 (1) The licensee, permittee or lessee shall make provision to the satisfaction of the Oil Conservation Engineer for the control and conservation of oil and gas at every well and structure test hole and he shall take all reasonable steps to maintain his equipment for such purpose in proper condition.

• (2) Where at any time, in the opinion of the Oil Conservation Engineer, such equipment is inadequate, he may prescribe the remedial measures that shall be instituted and completed before any further drilling or production is undertaken.

Precaution Against Waste

25 Every licensee, permittee or lessee shall take all precautions to the satisfaction of the Minister to prevent waste.

Testing of Wells

26 The surface and subsurface equipment of every oil and gas well shall be so arranged as to allow the taking of closed-in pressure, bottom hole pressure, the working pressure and the making of any reasonable tests required.

Equipment Required

• 27 (1) No equipment, casing or tubing used in drilling or production shall be used unless it is in good general condition and complies in all respects with these Regulations.

• (2) Each well shall be cased in such manner as may be prescribed or approved by the Oil Conservation Engineer, unless he is satisfied that casing is not required in any particular case.

Defective or Inadequate Equipment

• 28 (1) Where it appears to the Oil Conservation Engineer that any equipment, casing or tubing used in drilling or production is inadequate, defective or hazardous, he may require the replacement or reconditioning of the equipment, casing or tubing, and may require that operations be discontinued until the required action is taken.

• (2) The subsurface equipment shall include a pincollar or its equivalent at the lower end of the production tubing as a safeguard against loss of testing equipment, but the Oil Conservation Engineer may grant permission to dispense with the pincollar.

• (3) The surface equipment shall include such valve connections as are necessary to sample the oil, gas or water produced.

Plan to Be Furnished

29 The lessee shall furnish to the Oil Conservation Engineer upon request a plan in duplicate showing the position of all wells, pipelines, tanks, buildings or other structures on the leased area.

Minister May Take Remedial Measures

• 30 (1) The licensee, permittee or lessee shall at all times take reasonable measures to the satisfaction of the Oil Conservation Engineer to prevent or to remedy the injurious access of water, gas or oil into a formation.

• (2) Where any well is a menace to oil, or water-bearing formations or to life or property, and if remedial measures are considered necessary and the licensee, permittee or lessee of the well fails to use such measures as may be directed by the Minister, the Minister shall, at the expense of the licensee, permittee or lessee, take such steps and employ such persons as he considers necessary to carry out the remedial measures and for that purpose may

  • (a) enter upon, seize and take possession of any such well, together with the whole or part of the movable and immovable property in, on or about the well or used in connection therewith or appertaining thereto; and

  • (b) take over the management and control thereof for the time necessary to carry out the remedial measures.

Excavations and Disposal of Earth, Rock and Waste

• 31 (1) The permittee or lessee shall enclose and keep enclosed all openings or excavations made in connection with or for the purpose of exploring for and producing oil and gas or other operations.

• (2) The licensee, permittee or lessee shall at all times make such provisions to the satisfaction of the Oil Conservation Engineer for the disposal of the earth, rock, waste or refuse that it shall not be an inconvenience, nuisance or obstruction to any roadway, pass, passage, river, creek or place or to any private or Canada lands, or conflict or embarrass the operating of any mines on the said lands, or in any manner whatsoever occasion unnecessary private or public damage, nuisance or inconvenience.

Salt Water

32 The licensee, permittee or lessee shall take all reasonable care and carry out such measures as may be satisfactory to the Oil Conservation Engineer with regard to the disposal of salt water.

Storage

33 When an area is designated as a field by the Minister, or where it is expected that oil and gas will be encountered, adequate provision shall be made

• (a) for the conservation of oil and gas before a well is drilled in; and

• (b) for producing and storage equipment before a well is placed on production.

Safety Precautions to Be Taken

• 34 (1) No oil shall be stored in an unprotected excavation or in storage receptacles that are inadequate or likely to cause reasonably avoidable waste or loss.

• (2) All tanks or batteries of tanks shall be surrounded by a dike or ditch of a capacity greater than that of the tank or battery of tanks and the dike or ditch shall be maintained in good condition and free from high grass, weeds or combustible material.

• (3) All oil tanks or batteries of tanks shall be located at least 200 feet from the outer perimeter of the ditch or dike to any road allowance, surveyed road, railway other than siding, high voltage power line or other right-of-way, dwelling, industrial plant, existing or proposed aircraft runway or taxiway, building used for military purposes, farm building, school, church or cemetery and shall not be located in the flightway of an airfield within 1,000 feet of the end of the runway without a special permit.

• (4) Reasonable precautions shall be taken to prevent salt water, drilling fluid, waste, oil or refuse from tanks or wells from flowing over the land.

• (5) Any rubbish or debris that might constitute a fire hazard shall be removed to a distance of at least 150 feet from the vicinity of any well, tank or pump station.

• (6) All waste, oil and refuse from tanks or wells shall be drained into proper receptacles located not less than 100 feet from any tank, well or building and shall be burned immediately or transported from the premises, and when necessary and practicable, surrounded by a fireguard.

• (7) No flammable product or waste produce of any kind from any oil or gas well shall be permitted to run into any lake, stream or other body of water or on to any highway or public road.

• (8) No flare pit or end of flare line shall be located closer than 250 feet to any road allowance, surveyed road, railway, pipeline, high voltage power line or other right-of-way, dwelling, industrial plant, aircraft runway or taxiway, building used for military purposes, permanent farm building, school, church or cemetery, except where the Oil Conservation Engineer finds a lesser distance is justified under the circumstances.

Gas Metering

• 35 (1) A well producing gas shall be equipped with a gas meter of a type approved by the Oil Conservation Engineer, and no gas shall be produced at a well unless it is metered or the Oil Conservation Engineer gives permission to dispense with a meter.

• (2) Each orifice meter shall be installed in accordance with the regulations made under the Gas Inspection Act.

• (3) Where gas from several wells is brought to a common point for metering, each meter shall be marked clearly to indicate the source of gas being measured.

• (4) Any by-pass around a meter shall be closed by valves or stop-cocks that effectively stop all flow of gas when closed, and, on every occasion when the by-pass is operated and on any extraordinary occasion where gas does not reach the meter, a suitable entry shall be made on the meter chart.

• (5) Whenever an orifice plate is installed or changed, a record of the time and the size of the orifice removed and inserted shall be recorded on the meter chart.

• (6) Each orifice meter-run installed shall be equipped with a thermometer well and pressure gauge connection.

• (7) The measured inside diameter of the pipe at the orifice shall be clearly marked on the pipe near the orifice flanges.

• (8) The orifice plate shall show clearly the size of orifice, in inches and decimals, by figures stamped or cut into the metal of the plate, and a plate shall not be rebored or the orifice size increased without first removing or permanently defacing the old marking.

• (9) Each meter shall be maintained in good and usable condition.

• (10) Purchasers shall keep meter charts and records of gas purchased in a permanent file for a period of at least two years and such information shall be made available to the Oil Conservation Engineer at his request.

Orifice Meter Charts

• 36 (1) Orifice meter charts shall be clearly marked in such manner as to indicate the well or wells being metered and the time and the date of start and finish of records.

• (2) Charts shall be computed and shall be preserved for a period of one year.

• (3) In computing the quantity of gas passing the meter during the period covered by a chart, all metered gas shall be recorded together with a fair estimate of all gas passed during all periods in which the meter for any reason fails to record.

• (4) Coefficients for calculating meter charts shall be computed in accordance with the regulations made under the Gas Inspection Act.

When Meters Not Required

• 37 (1) The Oil Conservation Engineer may permit group meter measurements.

• (2) The Oil Conservation Engineer, after examination, may exempt any well or wells from metering the volume of gas produced therefrom if satisfactory estimates of the volume of gas produced are supplied to the Oil Conservation Engineer in lieu of meter measurements.

• (3) Where, in the opinion of the Oil Conservation Engineer, adequate measurements are not being made of the gas produced from any well, the Oil Conservation Engineer may require that such well be closed in until such time as adequate measurements or other satisfactory arrangements for determining quantities have been made.

Testing Gas Wells

• 38 (1) Before production is taken initially from any gas well it shall be tested by the back-pressure method.

• (2) Each producing gas well shall be tested at least every 12 months.

• (3) At the request of the lessee or lessees of a majority of the gas wells in any pool not subject to special pool regulation, the Oil Conservation Engineer may direct that such gas wells in the pool be tested by any standard method recognized as being practicable, except that all gas wells in any one pool shall be tested by the same method.

• (4) Tests shall be made in accordance with detailed instructions obtainable from the Oil Conservation Engineer and shall be forwarded promptly to the Oil Conservation Engineer on a form approved by the Chief.

• (5) Shut-in pressures shall be taken on all producing gas wells semi-annually unless the taking of such pressures is covered by special pool order.

• (6) Surface shut-in pressure shall be taken with a dead-weight gauge after a minimum shut-in period of 24 hours.

• (7) All shut-in pressures and the duration of the shut-in period thereof shall be reported to the Oil Conservation Engineer on the regular monthly gas well report.

• (8) Open-flow and back-pressure tests on gas wells may be witnessed or observed by the Oil Conservation Engineer and he shall be given reasonable notice by the permittee or lessee of the well on which the tests are to be taken, setting the time that such tests will commence.

Well Treatment

• 39 (1) The licensee, permittee or lessee shall not allow a well to be shot with nitroglycerine or similar type of explosive until the Oil Conservation Engineer has been notified of the contemplated action.

• (2) All reasonable precautions shall be taken when shooting, perforating, hydraulically fracturing or chemically treating a well, to ensure that no irreparable injury is done to the well, and to prevent ingress of water or other foreign substance into productive zone.

• (3) The licensee, permittee or lessee shall submit to the Oil Conservation Engineer a report on all wells shot, perforated, hydraulically fractured or chemically treated on a form approved by the Chief and shall include particulars of the results obtained.

• (4) In case any injury is done to the well by shooting, perforating, hydraulically fracturing or chemically treating, the licensee, permittee or lessee may repair or abandon the well and it shall be repaired or abandoned promptly to the satisfaction of the Oil Conservation Engineer if such repair or abandonment is reasonably necessary to prevent waste of oil or gas or damage to persons or property.

Gas-Oil Ratio

• 40 (1) The maximum gas-oil ratio for a well or a pool shall be determined by the Minister.

• (2) No oil well shall be permitted to produce gas in excess of the maximum ratio unless all gas produced in excess thereof, except gas used in gas-lift operations, is returned to the pool from which it was produced under conditions authorized by the Minister.

Gas-Oil Ratio Surveys

41 Gas-oil ratio surveys shall be taken in the manner approved or prescribed by the Oil Conservation Engineer.

Commingling of Production

• 42 (1) A person shall not allow a well to produce from more than one pool unless such action is authorized by the Minister in writing.

• (2) The method of multiple completion shall be approved by the Oil Conservation Engineer.

43 The production from one pool shall not be commingled with that from another pool in the same field before measurement without permission from the Oil Conservation Engineer.

44 No permittee or lessee shall permit a well to produce either oil or gas from different pools through the same production string without first receiving written permission from the Oil Conservation Engineer.

Affixing of Seals

• 45 (1) The Oil Conservation Engineer, wherever he considers it necessary to do so, may seal or cause to be sealed with a metallic seal or seals any or all valves or meters installed at a well or wells or on pipelines, tanks or other receptacles used for the storage or transportation of oil or other fluid produced or withdrawn from the well or wells.

• (2) The person in charge of operations at the well, and the permittee or lessee shall be notified in writing by the Oil Conservation Engineer of the affixing of the seal or seals and the reasons therefor.

• (3) Any seals so affixed shall not be removed, except in case of an emergency, without authority in writing from the Oil Conservation Engineer.