The Magazine of the Canadian Association of Petroleum Landmen

February 2010

THE NEGOTIATOR

Regulating GHGs in the USDetriment or Opportunity?

Letter to the Editor

Response to: “Buyer Beware – Seller Take Care”

Operator LiabilityAdeco Exploration Company Ltd. v. Hunt Oil Company of Canada Inc.

OPERATOR LIABILITY

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2008–2009 CAPL Board of DirectorsPresident

Ken Gummo, P.Land [ph] 403-296-6044Vice-President

Dalton Dalik, P.Land [ph] 403-478-0528Director, Business Development

Frank Terner, P.Land [ph] 403-691-3056Director, Communications

Margaret Ariss [ph] 403-539-1107Director, Education

Jan McKnight [ph] 403-290-3406Director, Field Management

Jason Tweten, PSL [ph] 403-526-8590Director, Finance

James Condon, P.Land [ph] 403-215-8614Director, Member Services

Gloria Boogmans, P.Land [ph] 403-246-4173Director, Professionalism

Robyn Van den Bon, P.Land, PSL [ph] 403-503-5276Director, Public Relations

Robin Thorsen [ph] 403-203-4050Director, Technology

Sally Jackson [ph] 403-232-5570Secretary/Director, Social

John Covey [ph] 403-232-7323Past President

Robert Telford, P.Land [ph] 403-503-5265 Suite 350, 500 – 5 Avenue S.W. Calgary, Alberta T2P 3L5 [ph] 403-237-6635 [fax] 403-263-1620www.landman.ca

Meghan Cobb mcobb@landman.caDenise Grieve dgrieve@landman.ca Irene Krickhan ikrickhan@landman.caKarin Steers ksteers@landman.ca

Also in this issue

15 2010 Kelowna Conference Update

21 2010 CAPL Squash Tournament

25 22nd Annual Merit Awards

27 33rd Annual CAPL Curling Bonspiel

THE NEGOTIATORThe Magazine of the Canadian Association

of Petroleum Landmen THE NEGOTIATOR

Features February 2010

2 Adeco Exploration Company Ltd. v. Hunt Oil Company of Canada Inc.

Oil and Gas Group, Miller Thomson LLP

6 Seizing Opportunities: US EPA to Regulate Greenhouse Gases

Glen L. Nazaruk

9 Letter to The Editor Darlene Howat

In Every Issue13 Board Briefs

17 Message from the Executive

19 Get Smart

23 Roster Updates

28 CAPL Calendar of Events

28 February Meeting

28 March Meeting

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written BY

OIL AND GAS GROUPMiller thoMson llP

The Case of Adeco Exploration Company Ltd. v. Hunt Oil Company of Canada Inc. 2008 ABCA 214operator liability to joint operators and a royalty holder in failing to continue a Crown petroleum and natural gas lease

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written BY

OIL AND GAS GROUPMiller thoMson llP

Hunt, Adeco, and Shaman entered into a joint operating agree-

ment (the “JOA”), that incorporated the terms of the 1990 CAPL

Operating Procedure, and appointed Hunt as operator. Initially,

this JOA did not include the two quarter section Crown leases

that later became the subject matter of this case, but in February

1997 the parties entered into

an inclusion agreement, making

the two leases subject to the

terms of the JOA.

The two quarter sections

at issue were never drilled.

However, each un-drilled quar-

ter section was surrounded

by four offsetting wells.

The two un-drilled quarter

section leases came up for

continuance in May 2001.

On May 2, 2001, the last

possible date for renewal, Hunt

submitted a continuation appli-

cation to Alberta Energy that

included well logs and recent

production data related to the

wells on the quarter sections

surrounding the two un-drilled

quarter sections. On August 3,

2001, Alberta Energy advised

Hunt that their application

for continuation was deficient

because it lacked the necessary

interpretive mapping. Alberta

Energy gave Hunt one month

to supply additional evidence

of productivity to support the

application. No additional infor-

mation was submitted by Hunt

and the leases for the two parcels

expired on September 3, 2001.

At trial it was determined that Hunt could have easily supplied

the required additional information to support its application.

After receiving the notice that the necessary supporting infor-

mation was lacking in their application, Hunt’s internal review

erroneously concluded that the leases should be allowed to expire

one of the Most iMPortant tiMes in the life of a Crown

Mineral lease is its Continuation. lessees need to have

adequate sYsteMs in PlaCe to Maintain title. in ADECO

ExPLORATiON COMPANy LTD. V. HuNT OiL COMPANy OF CANADA

inC. 2008 aBCa 214 (“ADECO V. HuNT”), the alBerta Court

of aPPeal ruled that an oPerator Can Be found liaBle

to its joint oPerators and roYaltY holders if it errs in

failing to Maintain title for lands that it oPerates.

BACkGROUND

hunt oil CoMPanY of Canada inC. (“hunt”), adeCo

exPloration CoMPanY ltd. (“adeCo”), and shaMan energY

CorPoration (“shaMan”) jointlY owned several Crown

PetroleuM and natural gas leases aCquired in MaY

1996 with a PriMarY terM of 5 Years. hunt held a 75%

interest, adeCo a 16.66675% interest and shaMan an

8.3325% interest in the leases. rana resourCes ltd.

(“rana”) held a 3% overriding roYaltY interest in the

ProduCtion froM the leases.

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as no other information was available. Later, Hunt placed unsuc-

cessful bids to reacquire the parcels.

Adeco and Shaman sued Hunt. They alleged that Hunt

breached its contractual duty to keep the leases in good stand-

ing; that Hunt was negligent in its renewal process; and that

Hunt owed them a fiduciary duty to maintain the leases in good

standing. Additionally, Rana sued Hunt for its royalty losses, both

on the basis that Hunt breached the royalty agreement and that it

breached its fiduciary obligations.

trial decisionThe trial judge found that Adeco and Shaman relied, and were

entitled to rely, on Hunt to do what it had contracted to do and

take the necessary steps to ensure that the leases were continued.

Clause 401 (Limit of Legal Responsibility) of the 1990 CAPL was

narrowly interpreted and Hunt was found to have breached its

obligation under Clause 309 (Maintenance of Title Documents) to

maintain title. The trial judge also concluded that Hunt had taken

over all responsibility of maintaining the titles as the operator and

was alone liable to Rana for its losses.

The trial judge found that the actions of Hunt with respect to

Adeco, Shaman, and Rana raised a fiduciary obligation that was

breached by Hunt. Hunt was also found negligent in its failure to

renew the leases.

appeal decisionDoes the 1990 CAPL exclude Hunt from liability for ordinary

negligence in conducting joint operations?

The Alberta Court of Appeal found that Clause 401 of the 1990

CAPL successfully excluded Hunt’s liability, as the operator, for

damages suffered by joint operators as a result of mere ordinary

negligence. This exclusion of liability also applied to the opera-

tor’s duty to conduct all joint operations diligently in a good and

workmanlike manner, in accordance with good oilfield practice,

under Clause 304 (Proper Practices in Operations), and the duty to

maintain the title documents in good standing under Clause 309.

In reaching this conclusion the Court considered Erehwon

Exploration Ltd. v. Northstar Energy Corp. (1993), 147 A.R. 1 (Q.B.).

In that case, the Court found the operator was solely liable to third

parties only for gross negligence, but liable to joint operators for

ordinary negligence. However, the Court noted that Erehwon was

a decision based on the 1981 CAPL, and that the 1990 version

demanded a different result, because Clause 401 had been

amended to clearly distinguish between liability and the duty to

indemnify (the two concepts were intermixed in the 1981 CAPL).

As such, Clause 401 of the 1990 CAPL now exempts operators from

liability to joint operators for mere negligence in the conduct of

joint operations.

Was Hunt guilty of gross negligence and, if so,

is it liable to its joint operators?

The Court of Appeal concluded that Hunt’s failure to continue the

leases was gross negligence. The Court reached this determina-

tion by looking at all of the actions, and inaction, taken by Hunt

including: the fact that Hunt waited until the last day possible to

submit the application; some further inquiries were made by the

responsible Hunt employee after receiving the deficiency letters,

but it was concluded that there was no further information avail-

able to file; the information required for the application was

available and could have been produced with minimal effort; the

submission instructions were readily available on the web; Hunt’s

internal response system was completely inadequate to deal with

situations where a problem was encountered.

Relying on case law dealing with gross negligence, the Court

determined that Hunt’s system for dealing with continuance was

not just flawed, “it did not come close” to what was required for

continuations on non-producing lands. Hunt relied on a system

of ad hoc response to problems by unqualified employees.

The system did not anticipate problems, but worked so long as the

continuation involved leases on producing lands.

The Appeal Court’s conclusion was that while Clause 401 of

the 1990 CAPL may protect operators from liability for ordinary

negligence, the operator is liable to its joint operators if grossly

negligent, as was established on the facts in Adeco.

It should be noted that the concept of gross negligence, which

really amounts to “a great deal of negligence”, is a fluid concept,

which will depend on a Court’s reaction in each case to a particu-

lar set of facts.

This decision highlights some of the risks involved for operators

managing titles shared with joint operators. Operators must have effective

systems in place to maintain title for operated properties. Continuation

applications not only need to be filed in a timely and proper manner,

the operator’s internal systems must be adaptive and able to efficiently

respond to, and address, problems.

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Were Adeco and Shaman guilty of contributory negligence?

Hunt argued that its joint operators, Adeco and Shaman, were

contributorily negligent as they both had the requisite knowledge

to take corrective procedures or warn Hunt that its continuation

efforts were deficient, but failed to do so.

At trial, where Hunt argued that Adeco and Shaman were

contributorily negligent, the trial judge found as a fact that neither

Adeco or Shaman were given copies of the materials Hunt sent to

Alberta Energy with its continuation application in May 2001 and

ruled against contributory negligence.

The Court of Appeal agreed with the trial judge that it was

not unreasonable for Adeco and Shaman to assume that Hunt,

as a good operator, would do what the operating agreement

required it to do – continue the leases. Applying the palpable and

overriding error standard, this conclusion could not be upset on

appeal (the “palpable and overriding error standard” is a legal

test which stipulates that an Appeal Court, on matters involving

findings of fact, cannot interfere unless the findings are clearly

wrong). Adeco and Shaman were not contributorily negligent.

Hunt’s appeal on this ground was dismissed.

Did Hunt owe a Fiduciary Duty to any of Adeco,

Shaman, and Rana?

Fiduciary obligations are trust-like in nature, involving concepts

like fidelity, control, and advantage. They are creatures of equity

and are designed to fill in gaps in which justice demands that

strict application of the common law be augmented by additional

relief. Hunt’s conduct was not intentional and the Court of Appeal

found that there was no fiduciary duty here. Generally, the courts

require an element of both vulnerability and intentional conduct

in order to find a fiduciary. There was no evidence that anything

played a part in motivating Hunt’s failure to continue the leases

other that human error. Moreover, there was no evidence that

Hunt did not act loyally, that it was in a conflict of interest, or that

it benefited at all.

Thus, the Appeal Court found no fiduciary duty on these

particular facts. Other cases in different circumstances may, and

will likely, be different.

is Hunt responsible for Rana’s losses?

Hunt was solely liable for Rana’s losses. The inclusion agreement

modified the royalty agreement to include the terms of the JOA.

The JOA includes Clause 401 of the 1990 CAPL, which rendered

Hunt solely responsible for any omission by it that constituted

gross negligence.

CommentaryThis decision highlights some of the risks involved for operators

managing titles shared with joint operators. Operators must have

effective systems in place to maintain title for operated proper-

ties. Continuation applications not only need to be filed in a timely

and proper manner, the operator’s internal systems must be adap-

tive and able to efficiently respond to, and address, problems.

The Adeco case is very instructive and will be a point of refer-

ence in situations where operators and joint operators (even

royalty holders, in certain instances), require guidance as to their

respective rights and obligations. m

Miller Thomson LLP is one of Canada’s largest national

law firms, with offices in Toronto, Vancouver, Calgary,

Edmonton, London, Kitchener-Waterloo, Guelph, Markham

and Montréal. The firm provides a complete range of

business law, advocacy and personal legal services to

Canadian and international corporations, entrepreneurs,

institutions, governments and not-for-profit organizations.

www.millerthomson.com

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the reCent announCeMent BY the united states environMental ProteCtion agenCY (ePa) that CarBon eMissions are harMful to huMan health Could Be the juMP over the CliMate Change legislative hurdle that u.s. environMentalists have Been PraYing for. The Final Rule Report

(Final Rule) issued by the Administrator of the

EPA on December 9, 2009 declares that the six

major greenhouse gases endanger both the public

health and the public welfare of current and future

generations. On this basis, these six greenhouse

gases (carbon dioxide, methane, nitrous oxide,

hydroflourocarbons, perfluorocarbons and sulphur

hexafluoride) may now be regulated pursuant to

Section 202(a) of the US Clean Air Act.

The situation in the US regarding the control of

greenhouse gas emissions has been considered a

mess for some time. The refusal by the republican

administration of George Bush to regulate green-

house gases highlighted the current standoff in

the scientific global warming debate. Regardless

of your position, as to whether climate change is

mankind driven, is a natural repetitive (and maybe

even healthy) process, has other less obvious

Seizing Opportunities: US EPA to Regulate Greenhouse Gases

written BY

GLEN L. NAzARUklawYer and landMan (indePendent)

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causes or is the result of the decisions of some sinister power

hungry cabal, many people in the world are concerned with the

issue. Translating this concern to votes is a pretty straight shot

and is the main reason that some form of reaction was inevitable.

As I wrote in an article published in The Negotiator in November,

2003, one obvious resolution to this environmental impasse would

be to add greenhouse gases to the list of substances currently

regulated under the Clean Air Act.

Indeed, some people are wondering why it took the current

EPA administration so long to act. The US Supreme Court ruled on

April 2, 2007 that the EPA has the authority to regulate greenhouse

gas in Massachusetts v. Environmental Protection Agency 549 US 497

(2007). This decision served as a strong rebuke to the then current

republican administration and showcases the impediments that

can be raised against regulatory actions contemplated by federal

agencies in the USA. Despite this decision, and in the wake of

massive public pressure, the EPA was able to delay the regulation

of greenhouse gases for almost two and one half years. The deci-

sion of the US Supreme Court in Massachusetts v. EPA involved a

legal petition submitted by the International Centre for Technology

Assessment along with 18 other renewable energy organizations

requesting that the EPA issue standards under Section 202(a) of

the US Clean Air Act for new motor vehicle engines. These renew-

able resources groups were seeking the regulation of emissions

from the six major greenhouse gases. In Massachusetts V. EPA,

the Court held that the EPA must determine whether emissions

of greenhouse gases from new vehicles cause or contribute to

air pollution or whether the science was too uncertain for such

a finding. In issuing its Final Rule, the EPA has clearly chosen to

regulate greenhouse gas emissions and arguably has not limited

the potential scope of the report to emissions from new vehicle

engines but has rather chosen to take a much broader view on the

impacts of greenhouses gases that includes the entire U.S. human

population, environmental ecosystem and economy.

The Final Rule, entitled “Endangerment or Cause and Contribute

Findings for Greenhouse Gases” was issued pursuant to Section

202(a) of the Clean Air Act. In the Final Rule, the administrator of the

EPA found that greenhouse gases in the atmosphere might reason-

ably be anticipated to both endanger public health and public

welfare. The definition of “air pollution” is defined as a mixture of

six “long lived and directly emitted” greenhouse gases carbon diox-

ide, methane, nitrous oxide, hydroflourocarbons, perfluorocarbons

and sulphur hexafluoride. In Canada, these substances have faced

various levels of regulation with some provinces such as Manitoba

seeking to regulate the emissions of these substances through

regulations to the Manitoba Clean Environment Act.

Indeed, Section 202(a) of the Clean Air Act already regulates

emissions from new automobile engines. This regulation simply

fails to include the six major greenhouse gas emissions. The issue

is whether or not these regulations should be extended to encom-

pass greenhouse gas emissions from new cars. Essentially this

Section 202(A) serves to promote and provide for enforcement of

manufacturing standards. The real question is: considering that

the greenhouse gas regulation door has been opened, how far will

it go? A finding of human health impacts from these six green-

house gases could follow regardless of whether the emissions

ultimately come from new vehicle engines, other manufacturing

facilities or maybe more importantly to natural gas demand, coal

power generated plants.

A number of things at this point are uncertain. It would seem

that this finding of greenhouse gas endangerment to human

health will in the interim be limited to the regulation of green-

house gas emissions from new motor engines. However, now that

the EPA has opened the door to the regulation of greenhouse gases

in the United States, we could expect that additional forthcoming

regulatory initiatives could follow the setting of base emission

limits (called a “cap”) in accordance with some predetermined

scale with parties in excess of their “cap” being subject to some

form of penalty. In the alternative and in keeping with current

climate market developments, some form of “trade” could take

place whereby parties who exceed their “cap” could essentially

“trade” up to higher emission limits after ostensibly being subject

to some form of environmental costs.

In the June, 2005 edition of The Negotiator, I wrote about the

mechanics of the current Clean Air Act cap and trade systems and

their application to climate markets including the advent of such

carbon exchange markets such as the Chicago Climate Exchange

and the various other European initiatives. Suffice to say that what

is important is to understand the basis upon which the EPA has

designated the six ” long lived and directly emitted” greenhouse

gases to be harmful to human health as these points could provide

clues as to potential regulatory options available to the US EPA.

Despite the significant debate concerning links between

climate change, greenhouse gases and human and environmental

impacts, the EPA Administrator found that the increase in green-

house gases in the atmosphere would lead to increases in ambient

temperature resulting in concomitant increases in mortality and

morbidity among the human population. In addition, the report

also states that human induced climate change would lead to

the incidence of more extreme weather events. Given the serious

risks of adverse impacts to human health that can arise from

hurricanes, tornados and the like, the report concludes that this

is another ground upon which to find that greenhouse gases have

adverse effects upon human health.

Interestingly, the report also mentions that increases in carbon

dioxide in the atmosphere may lead to increases in allergens and

the incidence of allergies overall amongst the human population.

In what should be considered a highly contentious conclusion, it

is observed in the report that the “incidence of pathogen borne

disease vectors” should prove as additional “directional support”

for a finding of human endangerment as a result of greenhouses

gas emissions. The report also concludes in no uncertain terms

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that climate change affects public welfare through numerous and

far ranging risks to food production and agriculture, forestry, water

resources, sea level rise and coastal areas, energy infrastructure,

ecosystems and wildlife. Indeed, it was concluded that the evidence

concerning adverse impacts in the areas of water resources and

sea level rise in coastal areas provided the clearest and strongest

support for an endangerment finding for current and future gener-

ations. Presumably impacts on coastal areas would be the result of

storm surge and flooding as a result of sea level rise combined with

the incidence of more intense storms such as hurricanes.

The decision that greenhouse gases are dangerous to human

health and therefore should be regulated under the Clean Air Act

in the United States is quite remarkable considering how deeply

entrenched are the opposing positions in the climate change

debate. While this in no way means to undermine the arguments

that high concentrations of greenhouse gases may have poten-

tially significant environmental impacts vis a vis climate change,

some people might find it a stretch to regulate these substances

based on impacts to human health that are indirect at best.

Were these arguments used as a basis to regulate products widely

under the auspices of protecting health, we might see a variety of

products falling under US federal legislation based on indirect but

albeit potentially significant impacts to human health.

It is likely that any new greenhouse gas emission standards

under Section 202(a) will serve to be mostly punitive involving

standards and enforcement. The use of such regulatory enforce-

ment or “negative reinforcement” for the alteration of human

conduct to achieve a social benefit has over the years met with

questionable success. Legislators with poor or ill will, limited

enforcement budgets, poorly crafted legislation and our own court

system have all worked towards reducing the success that has

been met by such “negative reinforcement” programs. A better

option it could be argued lies with the development of incentives

that promote and encourage technological change.

Indeed, the possibility that any proposed climate regulation

process will be hijacked by the courts is very likely. Section 307(b)

(I) of the CAA provides that a judicial review of this Final Rule

is appealable to the US Court of Appeals, District of Columbia.

The US Appeals process is an expensive time consuming morass

which could delay any eventual regulatory initiatives by up to

three years, or so it has been estimated. However, this appeal is

somewhat circumscribed as only issues that have been raised

with some specificity during the public review process which was

completed in April, 2009, may be raised on appeal per Section 307

(d)(7)(b) of the CAA.

We should ultimately expect that initiatives such as this will

one day have a significant impact upon the licensing and operation

of facilities that rely upon plants and facilities with high carbon

emissions. The likelihood that many power generating plants which

presently burn coal will be re-tooled to burn natural gas at some

point is quite high. While the window for these conversions is

uncertain, we should expect that it is unlikely that many new coal

powered generating stations will be brought on stream and certainly

not without emission controls devices such as scrubbers which

have proven to be both expensive and require high maintenance.

Because of these additional costs along with the expected additional

regulatory requirements, the cost of bringing on-stream coal powered

generating stations in the US could soon prove to be a poorer finan-

cial alternative to running these same plants on natural gas.

A number of initiatives are underway in the US and Canada

where governments are taking steps to promote the use of natural

gas over other more carbon emitting energy options such as coal.

One of the many initiatives currently in place or being considered

includes the EPA Natural Gas STAR Program which seeks to encour-

age oil and natural gas companies, both domestic and abroad, to

develop and adopt cost effective technologies. Also called the

“Methane to Markets” program, one of its goals is to promote prac-

tises that improve operational efficiencies and reduce emissions of

methane with a goal of conserving it as a clean energy source.

The additional costs to the use of coal as a power source are

a result of our need to remove the emissions that result from

the high levels of carbon which are endemic to coal. Natural Gas

on the other hand is a much cleaner burning fuel and does not

normally impose the full range of these additional costs. In fact, it

has been estimated that natural gas releases almost half the CO2

emissions of coal. In addition, developments in new technologies

and engineering innovations have resulted in dramatic improve-

ments in our access to non-conventional gas resources. The most

important are the new shale developments which promise to

bring on stream, significant additional production of natural gas

which will likely result in reduced natural gas prices.

ConclusionThe real issue is no longer which portion of the scientific debate

carries more weight or how we can best entrench our position to

maintain self interests. The real issue is how we embrace the oppor-

tunity to change. The more we see climate change as an impetus

for energy conservation, sound environmental management and

responsible economic development, the better we will see the

opportunities to move forward. Once we embrace the coming

regulatory impelled, lower carbon emission economy, and resolve

to encourage practises which promote reducing carbon emissions

we will be able to commit the resources necessary to resolve these

issues. Once these resources are committed, we should expect the

creation of long term, economically sound and environmentally

friendlier opportunities. Digging our heels in any further is akin to

turning a blind eye to the tremendous opportunities that industry

leadership and stewardship can bring to these issues. m

Glen L. Nazaruk is a Landman and Lawyer and is

currently an independent consultant. He can be

reached at glennazaruk@shaw.ca or 403-978-9222.

toll free: 1.877.998.1500 | www.integrityland.com

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Letter to The Editordear sir,i aM writing to You ConCerning an artiCle that aPPeared in the noveMBer, 2009 issue of THE NEGOTiATOR. The article, entitled “Buyer Beware – Seller

Take Care: The Role of Legacy Wells and Pollution in Oil and Gas

Acquisition and Divestitures”, contains a number of points which

I believe to be inaccurate concerning the regulation of so-called

“Legacy Wells” (unreclaimed/unremediated wellsites) under the

Environmental Protection and Enhancement Act (“EPEA”) by Alberta

Environment (“AENV”). There are also inaccuracies related to the

requirements of the Upstream Oil and Gas Reclamation Certificate

Program and the process of certification.

First, in terms of regulation, the author cites the contami-

nated sites provisions of EPEA (Part 5, Division 2) and argues that

enforcement respecting Legacy Wells is unclear. Given that the

contaminated sites provisions have never been used by AENV to

address upstream sites, the author’s observations are of limited

practical utility. I thought that it would be helpful if your readers

were provided an accurate account of actual practice.

The provisions of EPEA are meant to coordinate with the Oil

and Gas Conservation Act (“OGCA”). The OGCA governs abandon-

ment, EPEA governs reclamation and remediation. EPEA provides

three basic options for compelling reclamation and remediation:

Part 5

Division 1

(1) substance release (ss. 108 & 113)

Division 2

(2) designate as a contaminated site (ss. 125 & 129)

Part 6

(3) conservation and reclamation (ss. 137 & 140)

In practice, AENV only ever applies (1) or (3) when address-

ing upstream sites. AENV does not use the contaminated sites

designation provisions (Part 5, Division 2) of EPEA to enforce

reclamation/remediation on upstream facilities. Consequently,

the contaminated sites provisions of EPEA are irrelevant to any

discussion concerning the regulation of Legacy Wells.

Conservation & Reclamation (Part 6)

Typically, AENV invokes Part 6 of EPEA, which concerns the

conservation and reclamation of land. Part 6 imposes a duty on

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“operators” (the holder of a well licence or a working interest

participant) to conserve and reclaim specified land and empowers

an inspector or the Director to issue an Environmental Protection

Order (EPO) to enforce that duty. The potential content of an EPO

is set out in sections 137 and 241 of EPEA.

As a general rule, AENV issues the EPO in the name of the

last registered licensee as indicated by the records of the ERCB.

Exceptions to this rule include unit operators who are not the

registered licensee and other unlicensed operators. This prac-

tice works in tandem with the Orphan Well Association (OWA).

Both the practice and the creation of the OWA were endorsed

by industry through the Canadian Association of Petroleum

Producers (CAPP).

The main object of these developments was to reduce, if not

eliminate, the likelihood of historic look back. As a consequence,

oil and gas operators who wish to ensure their environmental

liability transfers upon the sale of Legacy Wells must simply be

diligent in the sale process. It is essential that vendors make

certain that the sale of any Legacy Well is registered with the ERCB

and that the associated well licences are properly registered in the

purchaser’s name. A compelling instance of this requirement was

recently upheld by the Alberta Court of Appeal in Sarg Oils Ltd. v.

Environmental Appeal Board, 2007 ABCA 215.

It is also worth noting that the licensee may seek contribution

for its reclamation/remediation costs. The person named in an

EPO may seek relief for the costs of reclamation as against other

working interest participants by application to the ERCB pursuant

to s. 30 of the OGCA. While liability is joint and several under EPEA,

the OGCA provides for the division of liability based on propor-

tionate share amongst multiple parties.

Substance Release (Part 5, Division 1)

As an alternative to a Part 6 order, where AENV has reason to

believe that remediation of a substance may be necessary, AENV

can turn to the substance release provisions of Part 5. Division 1 of

Part 5 is concerned with “Releases of Substances Generally”.

The release provisions of EPEA establish liability for a “person

responsible” for a substance if a release of the substance into the

environment “may cause, is causing or has caused” an adverse

effect (s. 112).

“Adverse effect” is defined in s. 1(b) to mean impairment of or

damage to the environment, human health or safety or property.

“Owner of the substance” is defined in s. 107(1)(a) as the owner

of the substance immediately before or during the release of the

substance.

“Person responsible” is defined in s.1(tt) to include the owner of a

substance, every person who has or has had the management or

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control of a substance and the successor of those persons previ-

ously referenced.

“Release” is defined in s. 1(hhh) to include a spill, discharge,

dispose of, abandon, leak, seep and dump.

Typically, a licensed operator is a person responsible for the

substances on a wellsite. However, it is important to note that the

range of people who may be considered a “person responsible” is

distinct from that of an “operator”. Consequently, a licence holder

is not the only person potentially liable for a substance release.

By way of example, AENV has named well operators and parties

contracted to dispose of drilling waste.

Ordinarily, through its acquisition and/or operation of an

upstream site, a licensee is:

a) an owner of the substances,

b a person who has and has had management of the substances;

and

c) a successor to any previous person who was an owner or

manager of the substances.

Where the Director is of the opinion that a substance release

has occurred that may cause an adverse effect, the Director may

issue an EPO to the person responsible for the substance (s. 113).

These provisions deal with current releases together with any

present or ongoing effect of a past release.

In summary, upstream oil and gas operators do not need to

be concerned with the contaminated sites provisions (Part 5,

Div. 2) of EPEA. AENV enforces the reclamation and remediation

obligations of upstream oil and gas operators by way of an EPO,

which is issued in one of two forms. It is based on either the duty

to reclaim (Part 6) or the duty to take remedial measures (Part 5,

Division 1), or both. These obligations ordinarily accompany the

well licence. Upstream operators who wish to ensure that their

environmental liabilities have transferred to another party must

see that the relevant ERCB licences are properly registered in the

name of the transferee.

Secondly, the history of the program, information required

for a reclamation certificate application, and the certification

process for upstream oil and gas sites have also been incorrectly

described by the author. The Province of Alberta introduced recla-

mation certificates on June 1, 1963 under the Surface Reclamation

Act to require reclamation of industrially disturbed private land.

The Land Surface Conservation and Reclamation Act was proclaimed in

1973 and was expanded to include public land on August 15, 1978.

Subsequent legislation included the Land Surface Conservation and

Reclamation Act (1983) and Environmental Protection and Enhancement

Act (EPEA) (1993). From 1963 to 1993, over 29,000 certificates were

issued (approximately 50% of the total issued to date).

From June 1963 to October 2003, sites were assessed for

reclamation through a field inquiry process to determine if

the site qualified for a reclamation certificate. The inquiry was

held at the site with the oil and gas operator, land owner and

Government of Alberta inspector to determine if the site was

successfully reclaimed. Following stakeholder consultation in 2002

and 2003, a desktop review process was initiated for conventional

upstream oil and gas reclamation certificate applications received

after October 2003. This enabled reclamation certificates to be

issued throughout the year without the need for a field inquiry.

In addition, certificate application requirements were expanded to

include contamination assessment and remediation.

The first stage of contamination assessment is a Phase 1

environmental site assessment (ESA). To conduct a Phase 1 ESA,

company files, the ERCB’s spill database, drilling waste disposal

records, and aerial photographs are reviewed and a past opera-

tor and the landowner/occupant are interviewed. A site visit

is required to look for additional indicators of contamination.

Together, all of these information sources can determine the

potential for contamination at the site. Alberta Environment has

developed a form for completing a Phase 1 ESA at an upstream oil

and gas facility, which is required with each reclamation certifi-

cate application.

If the Phase 1 ESA indicates there is potential for contami-

nation, a Phase 2 ESA is required. Soil, and in some cases,

groundwater sampling, are required as part of a Phase 2 ESA, and

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the samples collected at a site are sent to an independent labo-

ratory for analysis. The laboratory data is compared to Alberta

Environment’s Alberta Tier 1 Soil and Groundwater Remediation

Guidelines or Alberta Tier 2 Soil and Groundwater Remediation

Guidelines to determine if the site is compliant. Alberta’s remedi-

ation criteria have been developed through the Canadian Council

of Ministers of the Environment (CCME) for petroleum hydro-

carbons, metals, organics and pesticides. Criteria for salinity on

natural, agricultural and residential areas have been developed by

Alberta Agriculture.

If there are substances at a site that exceed the Alberta Tier 1

or Tier 2 guidelines, remediation is required. Soil samples must

provide confirmation that all substances are compliant with

the Alberta Tier 1 or Tier 2 guidelines. If groundwater was also

contaminated, groundwater monitoring must indicate compliance

with the Alberta Tier 1 or Tier 2 guidelines.

The next step is to replace the subsoil and topsoil and reveg-

etate the site with compatible plant species. Sites must meet the

Reclamation Criteria for Wellsites and Associated Facilities – 1995

Update to be eligible for a reclamation certificate. The criteria

provide the measurement parameters to determine if a site has

met equivalent land capability, which is the objective of reclama-

tion under the Conservation and Reclamation Regulation.

A professional is required to sign off on all contamination

assessment, remediation and reclamation work completed

after January 1, 2008. To be eligible to sign off, the professional

must have a minimum of five years verifiable experience

in remediation or reclamation relevant to the competen-

cies table contained in the Competencies for Remediation

and Reclamation Advisory Committee’s Recommendations

Report (Alberta Environment, 2006). This document contains

Competency Tables for various activities such as a Phase 1 ESA,

remediation and reclamation. The Professional Declaration

may be signed by a member in good standing of one of the

following professional regulatory organizations:

Alberta Institute of Agrologists;

Alberta Society of Professional Biologists;

Association of Professional Engineers,

Geologists, Geophysicists of Alberta;

Association of the Chemical Profession of Alberta;

College of Alberta Professional Foresters; and

College of Alberta Professional Forest Technologists.

A reclamation certificate provides a 25 year liability period for

surface reclamation, such as soil compaction, subsidence, and

topsoil replacement depths. If a problem with surface reclama-

tion arises within the 25 year period, the oil and gas operator

is required to undertake additional work at the site to meet the

reclamation criteria. The operator retains lifetime liability for

contamination. Following certification, approximately 15% of all

certified sites are field audited: 10% are surface reclamation audits

and 5% are sub-surface contamination audits. A certificate may be

cancelled following a failed audit or substantiated complaint.

Alberta Environment is responsible for reclamation certi-

fication of private land and Alberta Sustainable Resource

Development for public land. Alberta Environment oversees the

development of guidelines and documentation used to adminis-

ter this provincial program.

Also note that Alberta Environment is currently developing

a Remediation Certificate Program for the upstream oil and gas

industry, which will provide closure of regulatory liability against

more stringent remediation criteria. The program is expected to be

implemented in early 2010.

Sellers must indeed take care, but not for the reasons cited by

the author. m

Sincerely,

Darlene Howat, M.Sc., P.Ag

Remediation and Reclamation Policy Manager

Alberta Environment

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Board Briefsthe key issues discussed at the

CaPl Board of directors’ Meeting

held january 12, 2010 at the

CaPl office were as follows:

In Attendance Absent Guest

M. Ariss J. McKnight G. Boogmans Lorraine Grant

J. Condon F. Terner R. Telford Denise Grieve

J. Covey R. Thorsen Joanne Reardon

D. Dalik J. Tweten David Rudd

K. Gummo R. Van den Bon Karin Steers

S. Jackson

Guests Lorraine Grant, Joanne Reardon and David Rudd, repre-•

sentatives from the Centre for Energy Asset Management

Studies (CEAMS) provided the Board with an update on the

Program, now established at the SAIT campus with 64 first year

students. CEAMS would like to work with the CAPL to minimize

overlap between this Program and other educational offer-

ings, to ensure graduates are meeting industry needs, and to

promote awareness of the Program within the CAPL.

Jim Condon presented a Treasurer’s Report as at December 31, •

2009 showing CAPL investments totalling $524,340.87 Canadian

and $38,009.80 U.S. along with a cash balance of $32,491.11

Canadian and $2,756.87 U.S. The CAPL Scholarship Fund has

a balance of $234,664.03. There were two transfers made since

the last report; on December 9, 2009 an amount of $125,000

was transferred to the CAPL Scholarship Fund from the T.Bill

Account and $100,000 was transferred to the Current Account

from the T.Bill Account for a total transfer of $225,000 from the

Current Account.

Jim Condon presented a third draft of the 2010 CAPL Annual •

Budget showing a projected deficit of $56,178, which after

discussion, was approved by the Board. J. Condon also asked

Directors to look for opportunities to reduce expenses in their

portfolio as the year progresses, and to remind their committees

to follow the “Expenditure and Conduct Guidelines” available in

the Members’ Section on the CAPL website.

In Gloria Boogmans’ absence, John Covey presented one student, •

seven active and two associate membership applications to the

Board of Directors, which were approved. In addition to the

above, five members were approved to change from an Active to

Senior and one member was approved to change from an Active

to an Associate membership.

The Board of Directors endorsed Jim Condon as the Board’s •

candidate for Vice President of the CAPL for the upcoming

2010/11 election.

Robyn Van den Bon advised that the following members •

recently wrote and passed the Professional Surface Landman

(PSL) examination:

Brad Batten, Marshall McCarthy and Rob Pettifer

To date, a total of 25 members have written and passed the PSL

examination.

Frank Terner, Director of Business Development, provided the •

following update:

• BC Tenure. CAPL, along with other associations, were invited to

attend a meeting to discuss amendments to the BC Petroleum

and Natural Gas Act and related Regulations. A Committee has

now been formed with representation from the CAPL.

• Alberta Tenure. A meeting was held with Alberta Energy with

representation from the CAPL, as well as other associations,

to look at possible amendments to the Alberta Mines and

Mineral Act.

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• Saskatchewan Tenure. Saskatchewan proposes to make

amendments to the crown Minerals Act to accommodate

E-Tenure. The bill is now available for viewing on the

Legislature of Saskatchewan web site (www.legassemby.

sk.ca). The direct link to Bill 125 is: http://www.legassembly.

sk.ca/bills/pdfs/3_26/bill-125.pdf.

Dalton Dalik, Vice President, provided the following •

information:

He reminded Directors that, in accordance with the CAPL •

By-Laws, formal contracts require the signature of two sign-

ing officers of the CAPL in order to be considered binding

by the CAPL. Directors were also reminded to advise their

committees of this requirement.

He is currently investigating the feasibility of holding a •

Prospect Exchange. He will provide further information at the

next Board Meeting.

He attended a Petroleum Synergy Group (PSG) meeting with •

representatives from several other associations.

He announced that Meghan Cobb has recently joined the •

CAPL office staff on a contract basis.

Robin Thorsen, Public Relations Director, provided the following •

update:

The Committee is currently reviewing alternative advertis-•

ing opportunities and will provide the Board with further

information and specific recommendations at the next Board

Meeting.

The CAPL will once again sponsor the “Reserve Steer” at the •

2010 Stampede Steer Classic.

Ken Gummo advised that he has sent a letter on behalf of •

the CAPL to the Alberta Energy Resources Conservation Board

(ERCB) with respect to the ERCB Decision 2009-037 – OMERS/

Freehold Lease Issue. A copy of the letter is available on the

CAPL website.

Ken Gummo reminded Directors of the following:•

The next Board of Directors’ Meeting will be held February 2, •

2010 at the CAPL office.

The next General Meeting is Management Night on January 21, •

2010 at The Westin Calgary. The guest speaker will be Danielle

Smith, Leader of the Wildrose Alliance Party of Alberta. m

John Covey

Secretary/Director, Social

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dear CaPl Members:Last month it was my pleasure to intro-

duce to you the venue for the 2010 CAPL

Conference, the Delta Grand Okanagan

in beautiful Kelowna, British Columbia.

With each new edition of The Negotiator

that you receive prior to the confer-

ence, I hope that my committee and I

will be able to entice you to join us in

Kelowna by releasing significant details

of the Program, Sponsorship, Activities

and Administration as our organizing committees work out these

details. In this issue of The Negotiator I would like to introduce the

Chairmen of each of the committees and provide a little bit of news

from each portfolio, as follows:

ProgramI am very pleased to have Dave Horn as Chairman of Program. As Vice

President of Land at Compton Petroleum he is a very busy man and

yet he still has the energy to assist us in putting together a premier

program in Kelowna. Dave should know what it takes to deliver

because this is his second time as a Program Chairman having

already hit a home run with the Niagara Falls program in 2005.

When we started our planning sessions in 2009, we were

giddy with the possibilities that the Okanagan Valley presented

us in terms of a great networking focal point. Even I was guilty

of focussing too much on the fun possibilities. We have a superb

lakeside venue which is adjacent to vineyards, golf courses and

great restaurants. But Dave reminded us all that if we wanted the

conference to be remembered we had to have a serious program

tied to a serious theme. The theme is Resiliency, and thanks to

Dave and his crew, the program will be built around that theme.

Dave has already lined up our first headline speaker.

Jeff Rubin the noted author and former Chief Economist with

CIBC World Markets has been confirmed as a keynote speaker.

He will no doubt know something about resiliency in relation to

the Canadian business world. Stay tuned as we announce other

program details in the weeks ahead.

financeWhen I served on the board as President of the CAPL in 1999, my

Treasurer was Colin McKinnon. Who better to cajole into running

the conference Finance Committee than Colin. Colin has a partic-

ular knack for those CAPL budget spreadsheets and I know that we

need someone that understands how CAPL finance works in order

to break even on this self-funding initiative. So far I can tell you

2010 Kelowna Conference Update

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that we have a better grasp of the projected revenues and expenses

than I would have hoped and you can be sure that we will stay on

top of finances with Colin helping to steer the way.

Colin is also the one that came up with the Resiliency theme.

It was in our first formal committee meeting. We were stuck in the

mud and could not find an appropriate theme. It was one of those

situations where everyone but Colin was blurting out half-baked ideas

and it appeared that coming up with a theme and reaching consensus

would be impossible. Then very suddenly, the quiet, contemplative

guy from the corner threw out a one-word zinger and everybody

froze because they knew we had found what we were looking for,

Resiliency. Thanks for that, Colin! That theme is so appropriate.

MarketingMost of my Chairmen have tons of experience in industry.

Jeff Hohn, this year’s Marketing Chair, is our connection to the more

youthful segment of our membership. Although he has not been a

member of CAPL very long, he has already amassed plenty of CAPL

volunteer experience. He has been on the Education Committee and

the General Meetings Committee for the past three years and he is

a very dependable volunteer. We needed a fresh face on marketing,

and thank God, Jeff agreed to take it on. I think with Jeff in charge

and a little help from the economy we will have a banner year devel-

oping sponsorship joint ventures which will help to ensure that our

delegates experience a great conference.

Jeff has already signed up an unusual joint venture partner.

Quails’ Gate Vineyard has agreed to come on board to support

the 2010 initiative with a very generous contribution. We will be

featuring their product throughout the conference and will also

be running a winery tour at their property as an activity. This type

of sponsorship is definitely “thinking outside of the box” because

Quails is not an oil industry service provider.

administrationAdministration is a very big job. Plenty of work done by this

committee is so important to the seamless flow of the conference

and yet the Administration Committee will not be noticed by the

delegates. I wanted co-chairs for the committee as was done in

Victoria in 2008 and was very pleased when Cathy Armstrong and

Mary-Lou Ediger agreed to partner up for this portfolio. These two

ladies are very organized and very capable volunteers who will

not let us down. I have worked with Cathy for many years and

her leadership qualities will serve us well this year. In Mary-Lou

we get one of those rare situations where a major CAPL sponsor (

in this case I.H.S.) lends us a volunteer. We thank I.H.S. for this addi-

tional contribution and welcome Mary Lou to the team.

We are endeavouring to maintain the precedent web connections

developed by last year’s Administration Committee in establishing

a link to the Conference website from the CAPL website. We should

have the link up very soon and will be populating it with more and

more detail as we go along. You will shortly be able to register for

the conference and the hotel. The instructions will be accessible

from the CAPL website.

activitiesJeff Leitl and I also worked together for many years. Some of my

most enjoyable conferences were the ones where Jeff was one of

my wingmen. Jeff is also a proven leader and another guy that

thinks outside of the box, so I am pleased that he agreed to come

aboard as Activities Chairman.

The Activities Group is already well advanced in planning what

we hope will be one of the most memorable slate of activities of

any CAPL conference. As an example and without giving too much

away, our theme night will start with a boat ride to another lakeside

venue a few kilometres down the beach. The delegates and guests

who attend this event will be encouraged to wear costumes on this

voyage. When we disembark from the boats we will have arrived at

a legendary night-spot on the lake where we will have the run of

the establishment for the evening. Don’t worry; we will take ground

transportation back to the Delta.

Thanks to all the Committee Chairman and all the volunteers that

contribute so much time to make these conferences a success.

Please stay tuned. m

Jim Moore, 2010 Conference Chairman

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Message From the Executive

the PuBliC relations Port-folio is resPonsiBle for the ProMotion of the CaPl and land Profession within industrY and the CoMMuni-ties in whiCh we oPerate. This portfolio has a number of hard

working Committees that stay very active throughout the year

working to fulfill this role through various initiatives. I would like

to thank all of the Committee members for their efforts and dedi-

cation over the last year.

CalendarAs you can see by now, the Calendar Committee has done an

excellent job putting together our 2010 Calendar. Our theme this

year was “Supporting Healthy Lifestyles”. It is interesting to see

and hear the variety of ways that companies are promoting this

concept among their employees. Thank-you to all of our sponsors

for their continuing support of this great calendar.

steer Classic

Continuing with a great tradition, the CAPL once again spon-

sored the Reserve Champion Steer at the 2009 Calgary Stampede.

We sold raffle tickets at various events with all of the proceeds

going to the Alberta 4-H Foundation. This year we were able to

raise over $8,800. A big thanks goes out to Terry Cutting for taking

over the lead role of this great event. All of his hard work, ideas

and dedication made 2009 a great success. The Committee would

once again like to show our appreciation to the following sponsors

for their support of this very worth-while endeavor:

ag-west land inc.

altus geomatics

amani vineyards (PtY) ltd.

Balzac Meats

focus surveys

grizzly resources ltd.

ironhorse oil & gas inc.

Maranda reprographics & Printing

Mcara Printing

McMillan llP

Mcnally land services ltd.

Midwest surveys

Millennium geomatics ltd.

newdog

Prairie land & investment services ltd.

the lakes of Muirfield

archivesOver the last year we have taken the first steps of an exciting and

new initiative to start collecting and organizing photos of CAPL

members, activities and events. We have purchased a new hard

drive for the CAPL office so that we now have one location to store

these photos for future reference. We are now looking for your

help. If you have any CAPL photos, we would like to ask that you

please send them in to the CAPL office (preferably in digital (jpg)

format). We would also appreciate any details you can provide

about the people, events or dates associated with the photos.

BoothThe booth has always been a great way for us to meet, introduce

and educate people about our organization and the land profes-

sion. In addition to continuing to attend some of our past venues,

the Committee is looking into the possibility of attending some

new and exciting ones, including Agribition in Regina. We would

like to extend a special thank-you to all of the volunteers who

have generously donated their time to man the booth at these

various events.

Media relationsThis Committee is a very important component of this portfolio.

It covers a range of activities that includes sponsorships, advertis-

ing, our annual special feature, and sending out press releases

or special announcements of important CAPL events. We are

currently reviewing our advertising to determine what our best

options are as we endeavor to reach an even broader audience.

The Committee is also exploring some new ideas around our

annual special feature that goes into the Alberta Beef Magazine.

This feature has been a great way for us to inform the rural

community about our Association, to show the positive relation-

ships we are building, and to get information out about current

and relevant topics that are useful or interesting to the readers.

2009 Reserve Champion Steer

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One idea we are considering involves looking at options to further

expand the exposure of this feature.

Promotional itemsThere is always a great selection of promotional items that the

Committee has put together for sale at the CAPL office. We regu-

larly check our stock and look for new, high quality items that may

be of interest to you, so if you haven’t had a look lately you should

check them out. All items and details are listed on the website

under the CAPL Store.

As Director of Public Relations it has been a privilege to meet

such a great group of dedicated and hard working volunteers.

Over the last year we have had a number of enthusiastic and new

volunteers join us, and if you would like to join as well please

contact the Chairman – Cathy Mageau (cathy.mageau@cnrl.com)

or myself, we are always looking for people with new ideas, energy

and perspectives. m

Robin Thorsen

Director, Public Relations

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Get Smartthe CaPl education Committee is pleased to present the following courses:

Seismic Data: Legal Aspects of the

Acquisition, Licensing, and use

february 22, 2010 8:30 a.m. to 4:30 p.m.

This seminar is designed for Landmen who require a general

understanding of the legal implications of the acquisition,

licensing and use of seismic data in the oil and gas industry.

This seminar will provide an overview of the different types of

seismic data, but, the primary focus will be on Seismic Licensing

Agreements, namely, the fundamental concepts and basic prin-

ciples involved in determining the nature and extent of the rights

granted; the limitations and restrictions imposed; and, the obliga-

tions and duties required by the said agreements.

(PSL) Preparing For a Surface Rights Board Hearing

february 23, 2010 8:30 a.m. to 4:30 p.m.

For individuals who require a better understanding of the

Surface Rights Board hearing process from start to finish.

This course will begin by covering the types of surface rights

board hearings, including compensation, rent review, damage

claims and back rent. The next section will focus on the struc-

ture of the hearing and deal with procedural elements, evidence

taken under oath, direct and cross examination of witnesses

and questions from the board. From there the course will focus

on evidentiary issues like the burden of proof and discuss

privacy issues before closing by discussing the orders ultimately

issued by the board.

Economic Considerations for Land Deals

february 24 & 25, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for senior landmen and individu-

als involved in conducting project economic evaluations.

Emphasis is on the use of economics to assist in the structuring and

evaluation of land deals. Landmen and other oil and gas valuation

specialists will find the principles and illustrative examples that

are discussed throughout the course equally valid in the context

of their daily work. Landmen may also wish to encourage their

project evaluation team members to register for this seminar.

understanding Natural Gas And Crude Oil Marketing

March 2, 2010 8:30 a.m. to 4:30 p.m.

This seminar is designed for industry personnel who want an

overview of the fundamentals of gas marketing. The seminar

will begin with a brief discussion of the history of gas marketing

and some of the more commonly used industry terminology and

methods of measurement. It will cover the North American supply

and demand picture including new areas of exploration and

the demand growth forecasts driven by new power generation.

The course will review the transportation of natural gas and how

to devaluate new pipelines and pipeline space. The course will

then examine the fundamentals of natural gas pricing, storage

and the basics of risk management. The second part of the course

will cover crude oil marketing and conventional crude qualities.

The instructor will touch on supply, pricing, and market factors as

it related to Canadian crude.

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2007 CAPL Operating Procedure

March 4, 2010 8:30 a.m. to 4:30 p.m.

This one day course is an overview of the 2007 CAPL Operating

Procedure focused specifically on the changes between the 1990

and the new document. It is meant to enable personnel to appre-

ciate substantive differences between the 1990 and the 2007

documents. All experience levels are welcome but it should be

noted that the course will not be focused on the basics of the

operating procedure.

Constructive Conflict Management (PSL)

March 9, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for individuals who deal with conflict in

the workplace on a regular basis and require a platform to better

deal with it. The instructor will discuss how and why conflict

occurs in the workplace and discuss solutions for dealing with it

and avoiding it in the future. Topics will include professionalism,

defusing angry and aggressive subjects, and understanding why

people act as they do during conflicts. Both presentations and

interactive discussion will be used throughout the course to help

identify the difference between people’s positions and their inter-

ests. The course will conclude with an interactive skills practice

session focusing on newly learned Active Listening Skills.

Selected Developments in Oil and Gas Law

March 10, 24, 2010 8:30 a.m. to 4:30 p.m.

This two day seminar (although valuable to persons at all levels)

is targeted for more senior industry personnel and is suitable for

personnel in all aspects of the oil and gas business, especially,

those involved in the acquisition and administration of oil and

gas lands, leases and other interests, as well as those involved

in the negotiation, drafting, interpretation and application of the

various contracts used in the industry. This seminar will review

the manner in which courts have dealt with selected issues in

oil and gas law; illustrate the effect of the said decisions on the

everyday practices and procedures of the industry; demonstrate

how to identify similar problems in the future; provide practical

suggestions on how to avoid or resolve the said legal issues; and,

most importantly, explain the rationale behind the said decisions

and recommendations.

Directive 056: ERCB Energy Development Application &

Directive 60 Public Consultation Requirements

March 11 & 12, 2010 8:30 a.m. to 4:30 p.m.

This is a two day seminar which helps participants understand

the public consultation requirements, expectations of the ERCB

and assists companies in completing the application or audit

processes for regulatory compliance. This seminar is designed for

land agents, land administrators, operations engineers as well as

any other personnel who may be responsible for ERCB applica-

tions or regulatory compliance issues.

Fiduciary Duties

March 16, 2010 9:30 a.m. to 12:00 p.m.

This seminar is intended for experienced landmen and joint

venture personnel who are involved in acquisitions, divestments

and other transactions or interpretation of exploration, operating,

joint ventures and other agreements. It is also for P.Land holders

who require re-certification. This seminar will focus on problem

areas arising in the context of both transactions and day-to-day

operations. Case examples and court decisions specific to land

related issues will be presented and discussed. Specifically, this

course will emphasize situations and circumstances where fidu-

ciary duties do and do not arise and the nature of these duties.

Professional Ethics: Theory And Application

March 16, 2010 1:00 p.m. to 4:30 p.m.

This seminar is intended for all interested land personnel, P.Land

holders who require re-certification and all prospective new CAPL

members. This seminar is intended to increase the understanding

of ethics and the dimensions to ethical behaviour by stimulating

the ethical thought process, giving a basic introduction to the

nuances of ethics, introducing a number of methods used in ethi-

cal decision making, and providing a forum for discussions with

respect to land related ethical issues. Case studies will encourage

class discussion and give each participant insight into the moral-

ity vs legality question.

A Practical Guide to Title Review and Acquisitions

March 18, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for landmen and other industry person-

nel who are responsible for coordinating the conduct of title

review with outside counsel or those conducting due diligence

reviews and rectifying title deficiencies when acquiring assets.

This seminar will focus on the practical aspects of title and due

diligence reviews when acquiring assets in Western Canada.

Attendees will benefit from the suggestions presented to make the

title review process involving outside counsel more cost-effective

and efficient, enabling you to interpret the title opinion and use it

as a working document in your land administration system.

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Surface Land Management

March 23, 2010 8:30 a.m. to 4:30 p.m.

This seminar is directed towards professionals such as mineral

landmen, engineers, and geologists who work with their surface

land department or manage the surface land group as a part of

a larger team. Individuals new to the industry would also benefit

from this course. This course will provide an overview of the surface

land process from project kick-off to licensing. Areas discussed

will include the acquisition process on both private and crown

lands, applicable acts and regulations, compensation calculations,

documentation requirements and addendums, survey plans, ERCB

participant involvement and consultation requirements, ERCB

non-routine license applications, Surface Rights Board applications

and how to use these processes to gain access to land.

Conventional Exploration Agreements: Junior Level

March 25, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for those landmen, contract analysts and

administrators requiring an introductory understanding of explo-

ration agreements. The seminar will focus primarily on reviewing

typical agreements such as farmouts, seismic options, pooling

and joint operating agreements through the utilization of sample

letter agreements, formal agreements and precedents.

Resolving Conflict Through Negotiation

March 30, 2010 8:30 a.m. to 4:30 p.m.

This seminar is designed for landmen and other individuals who

wish to upgrade their communication skills through the use of

interest-based negotiations. This negotiation model is the model used

in the settlement of disputes by the ERCB and subscribed to by the

C2C Task Force. This seminar will instruct negotiators of any level of

experience in the skills of interest-based negotiations which is formu-

lated on the Harvard and Justice Institute of British Columbia Model.

The seminar will focus on practicing select communication skills to:

i) identify the negotiation matter at issue, ii) discover and under-

stand both your own and the other party’s underlying interests which

are motivating the hardened positions taken in the negotiation; and

iii) brainstorm options which meet the underlying interests common

to both parties and unique to each party so that a win-win agreement

can be reached. When agreements are based on interests rather than

positions the parties are more satisfied with the outcome and the

relationships are preserved for future negotiations. Special attention

will also be paid to handling the other party’s pressure tactics. m

Registration can be done online at www.landman.ca. Full course

descriptions can be found online at www.landman.ca/course_calendar.

php. For further information, please contact the CAPL office either by

phone at 403-237-6635, or email dgrieve@landman.ca.

2010 CAPL Squash Tournament

the glencoe Club (636 – 29 ave. s.w. Calgary, aB)saturday, March 6th, 2010 at 5:00 p.m. entry fee: $65.00(which includes gst, a shirt, prizes, food and beverages)

we would like to welCoMe all CaPl MeMBers and their guests to the 2010 CaPl squash tournaMent. This tournament is great fun for all levels of

players from beginners to the most competitive. Check in at the

West entrance of the Glencoe on March 6th and head down to the

squash courts. Dinner, prizes, refreshments, darts and pool will

follow in the Corner Pocket Sports Bar after the tournament.

Please return the attached entry form and your cheque made

out to “The 2010 CAPL Squash Tournament” to Scott Clapperton

at Rockford Land Ltd., Suite 119, 2526 Battleford Ave. S.W., Calgary,

AB. T3E 7J4.

This tournament is a great way to promote and market both

your company and yourself. If you are interested in sponsoring

this event please contact any of our committee members:

Pat Burgess patrick.burgess@gowlings.com

scott Clapperton rockfordland@shaw.ca

kofi Prah kofip@dolo.ca

Brad Purdy bpurdy@oculusenergy.ca

kevin koopman kkoopman@scottland.ca

don austin dkaustin24@hotmail.com

Chris Bartole chrisb@emergeoilandgas.com

Brad johnston bradj@galleonenergy.com

dan Cicero dcicero@huntoil.com

Please note that white clothing is required for racquet sports at

the Glencoe Club. m

Phone: 1-866-834-0008 | www.landsolutions.ca

def: LandSolutions Inc., company:1. the acknowledged Experts in Land Acquisition, Land Management, and Public Involvement for the petroleum and renewable energy industries, power generation, transmission and public infrastructure providers; 2. providers of expert management of large or small projects, with complex or simple solutions; 3. an experienced team that works with a well established client-driven process—ensuring unparalleled results over the full range of land services; 4.count on LandSolutions: the Experts.

LAND ACQUISITION & MANAGEMENT

def: LAND, noun: 1. any part of the earth’s surface not covered by a body of water; 2. an area of ground with specific boundaries; 3. rural or farming areas, as contrasted with urban areas

def: SOLUTION, noun:1. the act of solving a problem, question, etc.; 2. the state of being solved; 3. an explanation or answer; 4. the process of determining the answer to a problem, or the answer itself

def: EXPERT, noun: 1. a person or company who has special skill or knowledge in a particular field; specialist; authority; 2. a person or company who has achieved such a rating; 3. possessing special skill or knowledge; trained by practice; skillful and skilled; 4. pertaining to expert work; expert advice

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Roster Updatesnew Members

The following members were approved by a

Motion on January 12, 2009:

Applicant Current Employer Sponsors

Active

David Balderston suncor energy inc. derick Czember

sandy drinnan, P.land

sandy sandhar

Brittney Bichel nuvista energy ltd. ryan heath

greg sawchenko

josh truba

Kevin Colborne allied land services david robinson

(1978) ltd. jack romanoski

greg strachan, P.land

Nicole Macklin Zargon oil & gas ltd. kathryn Bailey

Mary gothard

Cheri nichol

Anita McKearney independent scott Colebrook

jamie fleck

roger wagar

Michael Penner ConocoPhillips david laurie

Canada luke Mclaren

roger wagar

Lindsay Smith Cenovus energy inc. ken dryden

doug errico

doug reynolds, P.land

Associate

Jeffrey Geib McMillan llP gord howe

jim Maclean

josh truba

Andrea Whitlock Challenger geomatics Barry rowe, P.land

ltd. Cory stewart

greg strachan, P.land

Student

Olena Liakhar university of Calgary robert schulz m

on the MoveGreg Anderson Buffalo resources Corp.

to fogo energy Corp.

Mark Bahan ravenwood energy Corp.

to apache Canada ltd.

Carola Bedau, P.Land exshaw oil Corp.

to saratoga reosurces ltd.

Michael Borggard independent

to husky oil operations limited

Collin Daniels Murphy oil Company ltd.

to ewd Consulting Corp.

Ken Dryden enCana Corporation

to Cenovus energy

Margaret Elekes, P.Land Breaker energy ltd.

to independent

Joe Ewaskiw ammonite energy ltd.

to novus energy inc.

Sherry Gerlach Petro-Canada oil and gas

to independent

Janice Germain independent

to Cenovus energy

Robert Glass enCana Corporation

to Cenovus energy

Dieter Gracher independent

to altima energy inc.

Bruce Hall, P.Land independent

to octave resources ltd.

Janet Harren enCana Corporation

to Cenovus energy

Percy Herring wave energy ltd.

to independent

Albert Hulzebos Barnwell of Canada limited

to independent

Adam Karpoff talisman energy inc.

to nuvista energy ltd.

Sherry Koftinoff enCana Corporation

to independent

Darryl Leason enCana Corporation

to Cenovus energy

Megan Lloyd enCana Corporation

to Cenovus energy

Roger MacKinnon, P.Land enerplus group

to independent

Gordon MacLeod orion oil & gas (north america) ltd.

to independent

1250, 396 – 11th Ave S.W. T2R 0C5

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Craig McClelland, P.Land Breaker energy ltd.

to independent

David McGuinness independent

to Molopo energy Canada ltd.

Cindi McKenna independent

to northern Blizzard resources inc.

Jane McKinnon, P.Land independent

to orion oil & gas (north america) ltd.

Susan McNutt triaxon resources ltd.

to storm exploration inc.

Leonard Moriarity, P.Land talisman energy inc.

to Canera resources inc.

Cliff Mork jaff holdings ltd.

to independent

Bill Nelson Pienza Petroleum inc.

to independent

Andy Prefontaine independent

to resonance energy ltd.

Brad Purdy oculus energy inc.

to home quarter resources ltd.

Brad Rouse Penn west energy trust

to independent

Marty Scase result energy inc.

to independent

Greg Sinclair enCana Corporation

to Cenovus energy

Dan Slattery avondale energy inc.

to d.j. resources

Trent Swanson east Central land ltd.

to traverse land group ltd. (sedgewick)

Ryan G. Thompson harvest operations Corp.

to angle energy inc.

Bryan Tiessen enCana Corporation

to Cenovus energy

Murray Watchorn talisman energy inc.

to 1110487 alberta ltd. m

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Farmouts. Sales. Opportunities.

PNG Exchange is a web-based service for landmen and oil and gas professionals looking to acquire or dispose of properties. PNG Exchange benefits companies by allowing users to customize their property postings, while reaching the maximum number of interested parties in the marketplace.

With over 200 properties already posted, it is the quickest and most cost-effective way for disposing and acquiring parties to connect. Check us out today.

Find out more by contacting Christian Lindved-Jensen at403 462 8057 or christian.lindved@pngexchange.com.

22nd Annual Merit Awardsin the CaPl, as in life, often it is the efforts of the few that Provide Benefits to ManY. As such, each year the Association seeks to recognize those indi-

viduals and organizations whose efforts have made an outstanding

contribution to the CAPL or our stakeholder community.

The Merit Awards Committee is now accepting nominations.

If you have had the opportunity to experience such an individual

or organization during 2009, please take a few moments out of

your day to complete and submit a nomination form by February

26, 2010. These forms can be found online at www.landman.ca by

clicking on ‘About CAPL’ and ‘CAPL Membership’.

Your input in this process is critical to its success. If you have

any questions, please contact one of the following Merit Awards

Committee members. m

Name Company Phone Fax E-mail AddressLarry Buzan Crew Energy Inc. (403) 513-9639 (403) 512-0898 Larry.Buzan@crewenergy.com

Calynda Evans EnCana Corporation (403) 645-2452 (403) 261-3377 calynda.evans@encana.com

Jan McKnight Barrick Energy Inc. (403) 290-3406 (403) 290-3447 jmcknight@barrick-energy.com

Gary Montgomery Tri Mont Resources Ltd. (403) 615-8746 (403) 609-2611 trimont@shaw.ca

Jan McKnight

Chair, Merit Awards Committee

LandSolutions Inc. #200, 601-10 Ave SW Calgary, AB T2R 0B2 1-866-834-0008ALSO SERVING: British Columbia, Manitoba, Ontario, Eastern Canada, and throughout Midwest US.

WESTERN CANADA LAND SALE and DRILLING RIG REVIEW

THE EXPERTS IN LAND ACQUISITIONAND MANAGEMENT SERVICES.

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

$4,000.00

$4,500.00

$5,000.00

$5,500.00

$6,000.00

$6,500.00

$7,000.00

$7,500.00

$8,000.00

$8,500.00

$9,000.00

$9,500.00

$10,000.00

Land Sale DataManitoba British Columbia Saskatchewan Alberta

AREATotal Ha Sold (thousands)

Average$ / Ha

BC 48,280 $3,569

AB - Foothills 12,864 $1,090

AB - Plains 45,722 $276

AB - Northern 175,561 $1,398

SK 73,977 $472

MB No Sale $0

December 2009

NOTE: Numbers are rounded

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Drilling Rig Utilization Rate

Utilization Rate

0

100

200

300

400

500

600

700

800

900

December 2009 December 2008 December2007 December 2006 December 2005 December 2004

Drilling Report for Last 5 Years

Drilling

Down

Total

bollywood

HOST RECEPTION: 6:00 - 7:00 P.M. DINNER: 7:30 P.M. DANCE: 9:30 P.M. BAND: THE REAL DEAL TICKETS: $125.00

S P R I N GB A L L

2 0 1 0 C A P L P R E S I D E N T ’ S

SATURDAY, MAY 8, 2010 THE WESTIN CALGARY

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33rd Annual CAPL Curling Bonspielit’s the tiMe of Year again to start thinking aBout Bringing out Your old or new Curl-ing BrooM and slider for the 33rd Annual CAPL

Curling Bonspiel.

If you didn’t participate in the 2010 Olympic Trials back in

December in Edmonton, then the next best thing is to partici-

pate in the 2010 CAPL Curling Bonspiel which will be held at the

Calgary Winter Club on Thursday, February 25, 2010.

This year registration will start earlier at 11:30 am as we are

providing a “lunch buffet” to all participants so everyone can have

some additional time to “network” with one another.

Curling will start at 12:45 pm sharp until 5:30 pm. At that time,

cocktails, some more networking and a fabulous dinner buffet will

be provided. After dinner we will hand out some prizes and enjoy

some live entertainment before we close out a fantastic day.

Please realize that this is a fun event, geared towards network-

ing with your fellow landmen, so previous curling experience is

not necessary.

The entry fee is $100.00 for CAPL members and $110.00 for

non-CAPL members (GST included).

The deadline to register is February 11, 2010, so please send

your entry form in quickly. However, as that this is a first come

first serve event, if this event is sold out, we will place you on the

waiting list and contact you if an opening comes available.

If you require further information on this event, or if your

company is interested in sponsorship please contact one of the

committee members listed below:

kevin koopman 261-6584

Chris hartley 213-7944

jordan Murray 213-8005

tasha anderson 213-5106

donna Phillips 718-8552

james McCorquodale 264-4465

Please send your entries in quickly, as we have sold out this

event the past four years. We look forward to seeing all of you on

Thursday, February, 25, 2010. m

Surface • Public Consultation • Freehold Leasing • A & D • Oil Sands • Pipelines • Land Sales • Environmental • Contract Staffing

Experienced professionalsdelivering high quality workout of 6 full service offices.

CalgaryEdmontonLloydminsterReginaGrande PrairieFort St. John

403-261-1000scottland.ca

Scott Land & Lease Ad Final 1/15/09 5:16 PM Page 1

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CAPL Calendar of Eventsfebruary 2 Tuesday Board Meeting 8 Monday Saskatchewan Land Sale 10 Wednesday Alberta Land Sale 10 Wednesday Manitoba Land Sale 11-12 Thurs-Fri N.A.P.E. Expo 15 Monday Family Day (Alberta, Sask., and Ontario) 22 Monday Seismic Data: Legal Aspects of the Acquisition,

Licensing and Use 23 Tuesday Preparing for a Surface Rights Board Hearing (PSL) 24-25 Wed-Thurs Economic Considerations for Land Deals 24 Wednesday British Columbia Land Sale 24 Wednesday General Meeting 25 Thursday Curling Bonspiel m

March 2 Tuesday Understanding Natural Gas & Crude Oil Marketing 4 Thursday 2007 CAPL Operating Procedure 6 Saturday Squash Tournament 9 Tuesday PSL: Constructive Conflict Management 10 Wednesday Selected Developments in Oil & Gas Law 10 Wednesday Alberta Land Sale 11-12 Thur-Fri (PSL) Directive 56: ERCB Energy Development

Application & Directive 60: Public Consultation Requirements

16 Tuesday Ethics 16 Tuesday Fiduciary Duties 17 Wednesday St.Patrick’s Day 18 Thursday A Practical Guide to Title Review and Acquisitions 18 Thursday Networking Night & General Meeting 23 Tuesday Surface Land Management 24 Wednesday Selected Developments in Oil & Gas Law 24 Wednesday Alberta Land Sale 24 Wednesday British Columbia Land Sale 25 Thursday Conventional Exploration Agreements:

Junior Level 30 Tuesday Resolving Conflict Through Negotiations m

February MeetingMorris seiferlingstewardship Commissioner for the land use secretariatwednesday, february 24, 2010

Morris Seiferling is the Stewardship Commissioner of the Land use Secretariat. Through his leadership of the Secretariat, Morris is responsible for supporting the Government of Alberta in the development and implementation of the Land-use Framework. Morris has been with the Alberta public service for 27 years and has held a series of positions in the land and natural resources divisions. He served with Public Lands in various roles, including regional manager for Community Pastures and branch head for public lands in central Alberta. He was Alberta Agriculture regional director in the Peace Region and Director of Technical Services with responsibility for environmental, engineering, livestock and water issues. Morris obtained an MBA from the university of Alberta in 2003. He achieved Masters in Business Administration in Management from Athabasca university in 2001. in 1979, he graduated from the u of A with BSc Agriculture, Agronomy major.

Lunch: 11:30 a.m. to 1:30 p.m.Location: The Westin Calgary 320 – 4 Avenue S.W.Cost: CAPL Members No Charge Guests $68.25 includes GST

All members are required to confirm their attendance by fax or email.

Fax registration forms to 403-263-1620, Attn: Karin Steers or email

ksteers@landman.ca. Please confirm your attendance prior to noon on

Wednesday, February 17, 2010. m

March Meetingnetworking eveningthursday, March 18, 2010

Reception: 5:00 p.m. until 9:00 p.m.Location: Murrieta’s Bar & Grill #200, 808 – 1 Street S.W.Cost: CAPL Members No Charge Guests $73.00 includes GST

Drink tickets can be pre-ordered from the CAPL office by download-

ing the order form available on the website starting February 28, 2010.

All members are required to confirm their attendance by fax or email.

Fax registration forms to 403-263-1620, Attn: Karin Steers or email

ksteers@landman.ca. Please confirm your attendance prior to noon on

Thursday, March 11, 2010. m

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