Canada Oil and Gas Land Regulations (C.R.C., c. 1518)

37 A permittee may at any time surrender the grid area or one-half of the grid area for which he holds a permit but, except as provided in section 41, no deposit shall be refunded to the permittee.

Permit Renewal

• 38 (1) An application for renewal of a permit shall be made to the Chief before the expiry date of the permit and shall be accompanied by the deposit required by section 40.

• (2) Upon receipt of an application for renewal of a permit made pursuant to subsection (1) and of the deposit referred to in that subsection, the Chief shall renew the permit for a term of one year.

• (3) Where a permittee does not make application for renewal of a permit in accordance with subsection (1), the Chief shall give written notice to the permittee informing him that if within 90 days of the date of the notice the permittee makes an application for renewal of his permit, accompanied by the deposit required by section 40, his permit may be renewed.

• (4) Upon receipt of an application for renewal of a permit accompanied by the deposit required by section 40 in accordance with a notice given pursuant to subsection (3), the Chief shall renew the permit for a term of one year from the expiry date of the permit and the permit shall, for the purposes of these Regulations, be deemed not to have expired.

• (5) A permit shall not be renewed pursuant to subsection (2) or (4) more than six times.

• 39 (1) Where

  • (a) a permit has been renewed six times,

  • (b) a well is being drilled in a manner satisfactory to the Chief, and

  • (c) in the opinion of the Chief, the well will not be completed or abandoned before the expiration of the permit,

  the Chief may, upon application, extend the term of the permit for one or more periods of 90 days.

• (2) The application for extension shall be made to the Chief and shall be accompanied by the deposit required by section 40.

Deposits

• 40 (1) Every permittee shall deposit with the Chief, before the commencement of a period set out in Column I of Schedule II, money, bonds or an approved note of a value equal to the amount set out opposite that period in Column II of that Schedule.

• (2) Notwithstanding subsection (1) and subsection 108(1), where a permit for an area located north of latitude 70° was issued earlier than January 1, 1965, the permittee may make the deposit required by subsection (1) for the second 36-month period of the original term or for the 24-month period following the second 36-month period of the original term of a permit described in subsection 36(4) on a date later than the date referred to in subsection (1), but in such case he shall make the deposit before January 1, 1968.

• (3) In this section, approved note means a promissory note payable on demand that a chartered bank has agreed, in terms acceptable to the Chief, to honour on presentment for payment.

• 41 (1) The portion of a deposit equal to the allowable expenditure made during the period, shall be returned to the permittee.

• (2) Subject to subsection (3), the portion of the deposit not returned to the permittee is forfeited to Her Majesty.

• (3) Where, in the opinion of the Chief, a permittee has not been able to make allowable expenditure equal to the deposit required for any period, and the permittee has given notice to the Chief, and during the renewal period next following the permittee makes allowable expenditure equal to the aggregate of

  • (a) the deposit required for the renewal period next following, and

  • (b) the portion of the deposit for the period, heretofore not returned to the permittee,

  the portion of the deposit heretofore not returned shall be returned to the permittee.

• (4) The notice required under subsection (3) shall be given before the end of the period and shall state the reasons that the permittee has not been able to make allowable expenditures equal to the deposit required for that period and that the permittee intends to make allowable expenditure, during the renewal period next following, equal to the aggregate of

  • (a) the deposit required for the renewal period; and

  • (b) the portion of the deposit for the period heretofore not returned to the permittee.

42 Where during a period a permittee expends an amount in excess of the aggregate of

• (a) the deposit set out in Schedule II for that period, and

• (b) any amount returned to the permittee pursuant to subsection 41(3) for allowable expenditures made during that period,

the deposit required for any succeeding period shall be reduced by the amount of that excess.

Expenditures

43 The Chief may at any time determine the amount of allowable expenditure made by the permittee on evidence submitted by the permittee and on such other evidence as the Chief may require.

• 44 (1) Every permittee shall, within 90 days after the end of a period, submit to the Chief a statement in triplicate of the expenditures made for exploratory work done on the permit area or group of permit areas during that period.

• (2) A permittee may submit interim statements of expenditure from time to time during the term of the permit.

• (3) Every statement of expenditure shall be verified by a statutory declaration and shall include

  • (a) the items of expenditure;

  • (b) the number of the permit area on which the work was done;

  • (c) the number of the permit area upon which the expenditure is to be applied;

  • (d) the specific purpose for which each item of expenditure was made; and

  • (e) three copies of all reports, photographs, maps and data referred to in section 53 concerning work for which expenditure is claimed.

• (4) Where the information referred to in this section has been sent by the permittee to the Chief pursuant to section 28, the permittee is not required to send that same information to the Chief pursuant to this section.

45 Where expenditures are made for exploratory work done on or off a permit area for the purpose of obtaining information of a general nature that may be of value to the permittee in connection with work being done by the permittee, the Chief may consider the expenditures to have been made in such amounts as the permittee may request on any permit area or groups of permit areas for which, in the opinion of the Chief, the work done is beneficial.

46 Where the Chief has designated a well as an exploratory deep test well, the amount expended on drilling that well shall be deemed to be an amount equal to twice the amount actually expended on drilling that well.

• 47 (1) An amount expended for road building or geophysical examination or as a contribution to a well drilled outside a permit area may not be considered to be an allowable expenditure unless prior approval for the work was obtained from the Chief.

• (2) An amount expended for research that, in the opinion of the Chief, is conducted with a view to developing new or improved methods, systems, processes or mechanisms, required especially for the exploration, development or transportation of oil and gas under Canada lands may be considered to be an allowable expenditure when prior approval for the research was obtained from the Chief.

Grouping

• 48 (1) A permittee may apply to the Chief to group permit areas not exceeding 2,500,000 acres any parts of which areas are within a circle having a radius of 100 miles or are contiguous.

• (2) The application for grouping shall be made in triplicate on a form approved by the Chief and shall state the permit areas that are to be included in the group.

• (3) A grouping shall commence on the date on which the application for grouping is approved by the Chief.

• 49 (1) Allowable expenditure made on any permit area within a group during the period of the grouping shall, at the request of the permittee, be applied to any or all of the permit areas within the group.

• (2) Where allowable expenditure is applied to a permit area pursuant to subsection (1), that expenditure shall not be transferred to any other permit area.

50 A permittee may from time to time regroup his permit areas.

Reports

• 51 (1) Every licensee, permittee or lessee shall, at least 15 days prior to commencing exploratory work, send a written notice, in duplicate, in a form approved by the Chief, to the Oil Conservation Engineer stating

  • (a) the date on which he expects to commence the work and to complete the work;

  • (b) the purpose and nature of the work;

  • (c) the approximate acreage of the area on which the work is to be done together with a map showing the boundaries of the area;

  • (d) the equipment he intends to use;

  • (e) the name of the person in charge of the work; and

  • (f) the number of persons to be employed.

• (2) Notwithstanding subsection (1), every licensee, permittee or lessee shall send the written notice, as required by that subsection, at least 45 days prior to commencing exploratory work on an area that is wholly or partially covered by seacoast waters.

52 A licensee, permittee or lessee shall, upon request by the Oil Conservation Engineer, report the location of field parties and any change in the intended exploratory work.

• 53 (1) Every permittee shall, within 60 days after

  • (a) the third, sixth, ninth, twelfth and fourteenth anniversaries of the date of which the permit was issued, in the case of a permit referred to in subsection 36(1) or (3) or paragraph 36(4)(a),

  • (b) the fourth, seventh, tenth and twelfth anniversaries of the date on which the permit was issued, in the case of a permit referred to in subsection 36(2) or (3) or paragraph 36(4)(b), and

  • (c) the expiration, cancellation or surrender of the permit,

  forward to the Chief, in triplicate,

  • (d) copies of all aerial photographs taken by the permittee;

  • (e) a geological report of any area investigated including geological maps, cross-sections and stratigraphic data;

  • (f) a geophysical report of the area investigated; and

  • (g) reports of all surveys not referred to in paragraphs (d) to (f) that were conducted on the permit area.

• (2) The geophysical report referred to in paragraph (1)(f) shall include,

  • (a) where a gravity survey has been conducted, maps showing

    • (i) the location and ground elevation of each station,

    • (ii) the final corrected gravity value at each station,

    • (iii) the gravity contours drawn on the gravity values, and

    • (iv) the boundaries of the permit areas;

  • (b) where a seismic survey is conducted, maps on a scale of not less than 1 inch to 1 mile showing

    • (i) the location and ground elevation of each shot hole,

    • (ii) the corrected time value at each shot hole for all horizons determined during the course of the survey,

    • (iii) contours and isochrons drawn on the corrected values with a contour interval of not more than 100 feet or the equivalent in time, and

    • (iv) the boundaries of the permit areas; and

  • (c) where a magnetic survey is conducted, maps showing

    • (i) the location of the flight lines,

    • (ii) the magnetic contour lines at intervals of 10 gamma, and

    • (iii) the boundaries of the permit areas.

• (3) Where the information referred to in this section has been sent by the permittee to the Chief pursuant to section 28 or 44, the permittee is not required to send that same information to the Chief pursuant to this section.

• (4) The Chief may at any time request that a licensee, permittee or lessee supply factual information and data, or a copy thereof, that are necessary for the interpretation of any survey conducted for the purpose of searching for oil or gas and, without restricting the generality of the foregoing, may request factual information and data concerning

  • (a) seismograms and other recordings of seismic events together with all relevant data;

  • (b) magnetic profiles and other recordings of variations in the magnetic field of the earth; and

  • (c) any observations or readings obtained during the course of a survey that was conducted for the purpose of searching for oil or gas.

• (5) No person shall destroy any of the factual information referred to in subsection (4) without the consent of the Chief, unless that information has been sent to the Department pursuant to these Regulations.