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2 In these Regulations,

Act

Act  means the Indian Oil and Gas Act; (Loi)

band council

band council  means the council of a band that has the use and benefit of the Indian lands that are being used or from which oil or gas is being produced; (conseil de bande)

commercial quantity

commercial quantity , in respect of oil and gas, means a quantity of oil or gas produced from a well that economically warrants the drilling of a similar well in the immediate area, taking into consideration the cost of drilling and production operations, the quantity of production and the availability of markets; (quantité commerciale)

Executive Director

Executive Director  means the Executive Director of Indian Oil and Gas Canada, Department of Indian Affairs and Northern Development; (directeur exécutif)

exploratory work

exploratory work  includes mapping, surveying, geological, geophysical or geochemical examinations, test drilling and other investigations, conducted by air, land or water, that are related to the exploration for oil and gas; (travaux d’exploration)

former Regulations

former Regulations  means the Indian Oil and Gas Regulations, C.R.C., c. 963, or any previous regulations made under the Indian Act respecting dispositions of oil or gas on Indian lands; (ancien règlement)

lease

lease  means a lease of oil or gas rights granted under section 10 or a lease of oil or gas rights that is deemed, pursuant to section 5 of the Act, to be subject to these Regulations; (bail)

operator

operator  means a person who is engaged in an activity related to the exploitation of oil or gas on Indian lands, including a person who is acting on behalf of, or as an employee or agent of, a contract holder; (exploitant)

paying quantity

paying quantity  means

• (a) in respect of a well that has been drilled but not completed and equipped, an anticipated output from the well of a quantity of oil or gas that would reasonably warrant incurring the completion and equipping costs of the well, and

• (b) in respect of a well that has been completed for the taking of production, an anticipated output from the well of a quantity of oil or gas that would reasonably warrant the taking of production from the well; (quantité rentable)

permit

permit  means a permit in respect of oil and gas rights granted under section 10 or a permit that is deemed, pursuant to section 5 of the Act, to be subject to these Regulations; (permis)

pool

pool  means a natural underground reservoir that appears to contain an isolated accumulation of oil or gas or of both; (gisement)

pooling

pooling  means the combining of oil or gas rights for the purpose of forming a spacing unit; (mise en commun)

spacing unit

spacing unit  means an area that is designated as such by a provincial authority that is responsible for the drilling for, or production of, oil or gas on non-Indian lands; (unité d’espacement)

unit operation

unit operation  means an operation that is undertaken in accordance with a plan for combining the interests of all owners of a common source of oil or gas in a field or pool, or in a part thereof, so that the operation may be conducted as if there were only one operator and one tract. (exploitation collective)

• 33 (1) Except as otherwise provided in a special agreement under subsection 4(2) of the Act, a lessee shall pay a royalty on oil and gas obtained from or attributable to a lease area in the preceding month, in an amount calculated in accordance with Schedule I.

• [...]

• (4) Subject to subsection (5), every sale of oil or gas that is obtained from or attributable to a lease area shall include the sale on behalf of the Crown of any oil or gas that is the royalty payable under this section.

• (5) At any time after giving reasonable notice in writing to the operator and giving due consideration to any obligations that the operator may have in respect of the sale of oil or gas, the Executive Director may, with the approval of the band council, direct that all or a part of the oil or gas that is a royalty payable under this section be paid in kind for a specified or indefinite period or until the Executive Director directs otherwise.

• (6) Where the Executive Director determines that oil or gas that is a royalty payable under this section was sold at a price that was less than the fair market value at the time and place of production, the Executive Director, in consultation with the band council, may direct that compensation be paid, at the time that the next royalty payment is paid pursuant to subsection (1), in an amount that is equal to the royalty on the difference between the price at which the oil or gas was sold and its fair market value.

• 25 (1) Six months before the end of the initial term and six months between the end of any continuance of a lease, the lessee shall provide the Executive Director with a report that contains

  • (a) data that indicates any wells in the lease area that are capable of producing oil or gas in paying quantity from one or more specified zones;

  • [...]

  • (c) geological, geophysical or engineering data that demonstrate the extent of the productive area for each zone that the lessee claims is capable of producing oil or gas in paying quantity, including

    • (i) a geological evaluation of the oil and gas potential for all prospective zones within the lease area,

    • (ii) an estimate of the amount of original oil and gas in place,

    • (iii) an estimate of the amount of original recoverable oil and gas reserves,

    • (iv) the oil and gas production volumes to date, and

    • (v) an estimate of the remaining recoverable oil and gas reserves;

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• (2) On application in writing to the Executive Director, made before the end of the term of a lease and accompanied by any information additional to that described in section 25 that the lessee considers pertinent, the Executive Director shall, if the lessee is not in default under the lease, these Regulations or any direction given under these Regulations, grant a continuance or a further continuance of the lease for an additional five years in respect of any part of the lease area that

  • (a) is within a spacing unit, project, unit or pooled area that contains a well that is producing, or that is capable of producing, oil or gas in paying quantity;

  • (b) is determined by the Executive Director to be within the limits of an oil or gas pool;

  • [...]

  • (e) is an area described in paragraph (5)(a) or (b) in which drilling has resulted in a well that is capable of producing oil or gas in paying quantity.

• (3) Any part of a lease area in respect of which the term of the lease is extended pursuant to subsection (2) shall be restricted to zones down to and including the base of the deepest zone within the lease area that is producing, or that is capable of producing, oil or gas in paying quantity.

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• (6) The Executive Director, in determining whether a lease area is within the limits of an oil or gas pool in accordance with paragraph (2)(b), shall consider only

  • [...]

  • (c) information that, on the date on which the term of the lease was to end, is contained in the records of Indian Oil and Gas Canada; and