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

Encounters of Oil or Gas

• 14 (1) Where the licensee, permittee or lessee encounters in significant quantities oil or gas in a well outside a designated pool or field, he shall notify the Oil Conservation Engineer, by the most expeditious method, of the character, extent and quantity thereof.

• (2) In such instances mentioned in subsection (1) and where practicable, the licensee, permittee or lessee shall take and preserve samples for a reasonable time in an amount of not less than one quart of oil or water and in the case of gas, sufficient to fill a container satisfactory to the Oil Conservation Engineer.

• (3) When requested to do so by the Oil Conservation Engineer, the licensee, permittee or lessee shall forward the samples referred to in subsection (2) to him.

Abandonment of Wells

• 15 (1) Before abandoning a well drilled under these Regulations and before removing any part of the casing therefrom, the licensee, permittee or lessee shall notify the Oil Conservation Engineer in writing of his intention to so do on a form approved by the Chief in triplicate and shall obtain written approval of such abandonment and removal of casing from the Oil Conservation Engineer but such approval may first be given orally.

• (2) In abandoning wells, cement plugs shall be used to protect porous formations and unless otherwise directed by the Oil Conservation Engineer, the plugs shall be felt for in accordance with good oil field practice and new plugs shall be placed when necessary.

• (3) The interval between plugs shall be filled with an approved mudladen fluid of proper density unless otherwise directed by the Oil Conservation Engineer.

• (4) Seismic shot holes and structure test holes shall be abandoned by a method approved by the Oil Conservation Engineer and in accordance with good oil field practice.

• (5) Upon abandonment of the well, all excavations shall be filled and exact locations of such well or hole shall be marked by a pipe not less than two inches in diameter set solidly into a concrete block or other approved material and projecting at least four feet above ground level.

• (6) The name of the well shall be plainly and permanently marked on the pipe in a manner approved by the Oil Conservation Engineer.

Restoration of Surface

16 The licensee, permittee or lessee shall, as soon as weather or ground conditions permit, upon the final abandonment and completion of the plugging of any well or structure test hole, clear the area around the location of all refuse material, burn waste oil, drain and fill all excavations, remove concrete bases, machinery and materials other than the marker provided for in subsection 15(5) and level the surface to leave the site as nearly as possible in the condition encountered when operations were commenced.

Reports to Oil Conservation Engineer

• 17 (1) A report in triplicate on a form approved by the Chief shall be forwarded to the Oil Conservation Engineer within 30 days of

  • (a) the abandonment of a well; or

  • (b) the suspension of drilling of a well.

• (2) The licensee, permittee or lessee shall, within 30 days of receiving core, oil, gas or water analyses by him or caused to be made by him, submit copies in duplicate to the Oil Conservation Engineer.

• (3) Upon completion of a structure test hole program the licensee, permittee or lessee shall submit to the Oil Conservation Engineer a report on a form approved by the Chief in triplicate on each hole drilled.

• 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.