Indian Oil and Gas Regulations (SOR/2019-196)

Marginal note:Qualifying lands

• 63 (1) A subsurface contract may be continued with respect to the zones, identified in accordance with Schedule 4, that are in a spacing unit

  • (a) that contains a productive well;

  • (b) that is subject, in whole or in part, to a unit agreement that includes lands in which a productive well is located, or to an oil or gas storage agreement that has been approved by the provincial authority;

  • (c) that is subject to a bitumen recovery project that has been approved by the Minister;

  • (d) that is subject to a project, other than a bitumen recovery project, that has been approved by the provincial authority and includes lands in which a productive well is located;

  • (e) in respect of which an offset notice has been received in the six months before the day on which the application for continuation is submitted or in respect of which a compensatory royalty is being paid;

  • (f) that is not producing but is shown by mapping to be capable of producing from the same pool from which a well on an adjoining spacing unit is productive; or

  • (g) that is potentially productive.

• Marginal note:Horizontal and deviated wells

  (2) For the purposes of subsection (1), each spacing unit from which a horizontal well or deviated well is productive is deemed to contain a productive well.

• Marginal note:Potentially productive

  (3) For the purpose of paragraph (1)(g), a spacing unit is potentially productive if

  • (a) it contains a well that is in a mapped pool, is neither productive nor abandoned and

    • (i) was previously producing, or

    • (ii) contains evidence of the presence of hydrocarbons whose potential productivity has not been conclusively determined;

  • (b) it contains an abandoned well and any zone penetrated by the well has remaining oil or gas reserves; or

  • (c) it has not been drilled, there is evidence that it may be part of a productive pool and it is within a quarter-section in the case of oil — or a section in the case of gas — that adjoins any spacing unit referred to in paragraphs (1)(a) to (e).