18. Except as otherwise specified in the permit, the fee for a permit shall be paid in advance in the amount of

• (a) for the initial term, $2.50 per year per hectare of the permit area; and

• (b) for each extension of the term, $5.00 per year per hectare of the permit area.

19. Where oil or gas is discovered in a permit area in a commercial quantity, the permittee shall apply, pursuant to section 20, for one or more leases in the permit area that contains the discovery well, before the earlier of

• (a) the day that is 90 days after the day of the discovery, and

• (b) the commencement of the drilling of any other well in the permit area within 8 km of the discovery well.

• 20. (1) Where, before the end of the term of a permit, or of any extension thereof, a permittee applies to the Executive Director for the conversion of the permit to one or more leases and sends a copy of the application to the band council, the Executive Director shall, in consultation with the band council, grant the leases applied for if the permittee has

  • (a) complied with the terms and conditions of the permit, these Regulations and any direction given under these Regulations; and

  • (b) paid the first year’s lease rental and the lease fee set out in Schedule II for each lease applied for.

• (2) The aggregate area of a lease granted pursuant to subsection (1) shall not exceed

  • (a) any portion of the permit area that is specified for lease entitlement in

    • (i) where permit was granted consequent to a call for tenders, the call for tenders, or

    • (ii) where the permit was granted consequent to a call for proposals or direct negotiations, the permit; or

  • (b) if no area is specified for lease entitlement as described in paragraph (a), one half of the original permit area.

• (3) The area of a lease granted under subsection (1) shall

  • (a) be in the form of a square or rectangle;

  • (b) have an area that is not less than one quarter-section and not more than six sections;

  • (c) have a length that is not longer than twice its width; and

  • (d) be separated from any other lease area by a distance of not less than 1.6 km, except where the lease areas are diagonally situated so as to have a common corner.

• (4) The boundaries of the area of a lease granted under subsection (1) shall conform to the boundaries of

  • (a) sections, legal subdivisions, lots or aliquot parts of lots; or

  • (b) if the lease is for an unsurveyed area, projected sections, legal subdivisions lots or aliquot parts of lots.

• (5) Notwithstanding subsections (3) and (4), the Executive Director may grant a lease in respect of an area that does not meet the requirements set out in those subsections if

  • (a) the shape and boundaries of an Indian reserve are such that a lease area selected cannot meet those requirements;

  • (b) a call for tenders consequent to which the permit was granted provides for a lease area that does not meet those requirements; or

  • (c) the permit expressly provides for a lease area that does not meet those requirements.

• (6) Notwithstanding subsection (3), if a deposit of crude bitumen is identified, the Executive Director may, on application by a permittee and with the approval of the band council, grant a lease with an area larger than that set out in that subsection if the aggregate area of all leases applied for does not exceed the limit set out in subsection (2).