RIGHTS OF FIRST REFUSALLearn the implications of Alberta’sLimitations Act in the second halfof Forbes Newman’s ROFR article.PAGE 4

HOWDY Y’ALLThe Prospect ExchangeCommittee prospects forAmericans at NAPE. PAGE 20

GUIDE 56 APPLICATIONSMake sure you know whatexpectations the EUB has forpublic consultation. PAGE 2

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LANDMAN is the most comprehensive land management system in the busi-ness. Fully integrated with ATS’ enterprise accounting solutions, Canada’s

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that form the core of their business. LANDMAN can be linked to a host ofother geotechnical applications- accessing information can be

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Stay tuned for ATS’ new application service provider (ASP) delivery vehicle. The Internet continues to change the way you do business. ATS is commit-

ted to position our customers to take advantage of the e-Business evolution.

Applied Terravision provides a comprehensive suite of software solutionsthat include Geoscience Applications, Production Management, Land &

Facilities Management, Financial Accounting, and Oil and Gas Marketing.

Annual Compensation for Linear Developments UpdateDeryl Hurl and Bob Garies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Oil and Gas Taskforce UpdateAlberta Securities Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Committees in ActionMike G. Miles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Board BriefsElizabeth Burke-Gaffney, P.Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Meeting AnnouncementsCAPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Topical Issues Luncheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Message from the ExecutiveBrad Goodfellow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Get SmartCAPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Echoes of YesteryearAubrey Kerr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

PLM Charity Golf ClassicNathan MacBey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

PEX Prospects at NAPEKevin Burke-Gaffney, P.Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Leo Boisvert’s RetirementCAPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Online Member Roster AccessGjoa Taylor, P.Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Roster UpdatesCAPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

CAPL Calendar of EventsCAPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

march 2002

The NegotiatorMONTHLY NEWS MAGAZINE OF THE

CANADIAN ASSOCIATION OF PETROLEUM LANDMEN

Senior Editorial BoardR.K. [Bob] Howard, P.Land – Editor-in-Chief

[ph] 303-8642 [fx] 233-7463

Chris Bartole – Co-ordinating Editor[ph] 237-1191 [fx] 237-1544

Delona Butcher – Feature Content Editor[ph] 234–5393 [fx] 234-5947Jan Peters – Advertising Editor[ph] 290-2108 [fx] 290-2610

Lori Van Immerzeel – Social Content Editor[ph] 777-2613 [fx] 777-2609

Jeremy Wallis – Regular Content Editor[ph] 290-3283 [fx] 290-2553

Rob Motherwell – Editor Emeritus[ph] 249-7334

Editorial StaffLinda Bernier [ph] 266-8200 [fx] 290-8200Harry Ediger [ph] 264-3959 [fx] 265-2227

Darryl Erickson [ph] 265-2230 [fx] 265-2227Calynda Gabel [ph] 261-2377 [fx] 269-8355

Ryan Heath [ph] 218-8685 [fx] 269-5858Nathan MacBey [ph] 261-2382 [fx] 269-6089

Mike Miles [ph] 231-0241 [fx] 231-0310Brad Purdy [ph] 218-6837 [fx] 266-6988

Philip Schnell [ph] 237-1130 [fx] 231-3650Robin Thorsen [ph] 509-8182 [fx] 509-6565

Esther Watt [ph] 298-2813 [fx] 290-8147Barbara Wylegly [ph] 509-8281 [fx] 237-8213

PhotographersDalton Dalik [ph] 230-2105 [fx] 264-0147Dave Leslie [ph] 237-5570 [fx] 237-5568Dave Laurie [ph] 229-1500 [fx] 245-0074

Design and Production Cover Illustration PrintingRachel Hershfield Matthew Howard McAra Printing

SubmissionsSubmissions to The Negotiator should be sent in print-ready formto one of our Editorial Board. For a copy of our submission guide-

lines, please contact a member of our Senior Editorial Board.

DisclaimerAll articles printed under an author’s name represent the views

of the author; publication neither implies approval of the opinions expressed, nor accuracy of the facts stated.

AdvertisingFor information, please contact Jan Peters [290-2108].

No endorsement or sponsorship by the Canadian Association of Petroleum Landmen is suggested or implied.

CAPL OnlineThe website for the CAPL is: www.landman.ca

CAPL OfficeSuite 350, 500 – 5 Avenue S.W.

Calgary, Alberta T2P 3L5[ph] 403-237-6635 [fax] 403-263-1620

Denise Grieve, Office Managerdgrieve@landman.ca

Karin Steers, Office Administratorksteers@landman.ca

This Month’s Features

Rights of First RefusalPart 2

Forbes Newman

CAPL/PLMMentoring ProgramW.F. Lannan

Ottawa 2002R. Kenneth Pretty

Guide 56 and PublicInvolvementBob Garies

the

egotiatorN

2

4

18

26

N Pa g e 2mar 2002

Guide 56and Public Involvement:Expectations in Energy

Development Applications

Guide 56 or the Energy

Development Application Guide

was introduced to the oil and gas indus-

try in 1996, by the Alberta Energy and Utilities

Board (EUB). The guide replaced the previous applica-

tion process partly in response to the increasing activity

levels of the energy industry and the reduction of staffing at the

EUB. The application guide has seen several updates since its incep-

tion with the main theme of increasing public engagement and

participation in the energy development application process.

In 2001 over 30,000 applications were filed with the EUB using guide 56.

The EUB is the organization that is “responsible for the economic,

orderly and efficient development in the public interest of the energy

resources of Alberta. When considering energy development applica-

tions the EUB is obliged to treat all parties fairly. This fairness of

treatment requires that all parties who are or may be affected are enti-

tled to be made aware of energy developments, to voice their

concerns, and to have their concerns heard. An affected party is a

person whose rights may be directly and adversely affected.”

Prior to submitting an application the EUB expects that companies

take their public involvement responsibilities and obligations very

seriously. “The EUB considers it paramount that effective communica-

tion take place among industry, government, and the public so that

concerns may be raised, properly addressed, and if possible resolved.

All parties should work cooperatively for the energy development

process to be effective.”

In recent discussions with EUB staff, fifty three percent of applications

that were audited in 2001 were deemed to be deficient as a result of

inadequate or incomplete public consultation programs. The guide is

very specific in outlining the EUB’s expectation of industry in devel-

oping effective communication with affected parties.

• Identify parties whose

rights may be directly and

adversely affected in your project

areas, such as landowners, residents, and occu-

pants, grazing leaseholders, trappers and outfitters.

• Identify and communicate with aboriginal, environmental, and

other groups who may be interested in your application.

• Identify special sensitivities that exist in the area. To achieve this,

the EUB recommends that you talk to local residents and other oper-

ators and develop an effective communication plan that involves

affected parties at an early stage of planning.

• Begin your public involvement program before you finalize pipeline rout-

ing or well or facility location, and before you submit your application.

• Provide sufficient information to the public for them to assess the

impact of the proposed development and to participate meaningfully

in the decision-making process concerning the proposed develop-

ment. To accomplish this, your program should provide all interested

parties with the opportunity to obtain adequate information of the

proposal and its possible impacts.

• Provide documented information about your project that is consis-

tent and factual. If your proposal is part of a larger project, you

should be prepared to discuss the entire project and to explain how

your component complements other energy development in the area.

Companies must not only provide information about the project that

they are making the application for, but also effectively engage parties

that are affected by the development. The EUB does not prescribe the

extent of the consultation that must take place, however the consul-

tation must be meaningful and sufficient depending upon the

complexity of the project.

N Pa g e 3mar 2002

Annual Compensationfor Linear Developments

Update

The Field Acquisition and Management Committeeis pleased to report an update to the article that was

presented in the January edition of The Negotiator.

By letter dated January 9,

2002 the Honorable

Murray Smith, Minister of

Energy for the Province of

Alberta advised the

Canadian Association of

Petroleum Producers that:

“I am aware that repre-

sentations have been

made to government

advocating a change in policy to replace the current compen-

sation method of one–time–payments with one based on

annual payments.

I agree with the reasoning put forward in your letter in

support of the argument that landowners are adequately

compensated under the current compensation policy of one-

time payments. I want to take this opportunity to advise you

that the government of Alberta has no intention of altering

the current policy.”

The Field Acquisition and Management Committee will

continue to take a lead role with this issue and other access

to land issues as they develop within our industry.

Submitted by Deryl Hurl and Bob Garies,

Field acquisition and Management Committee

Guide 56 also provides a template of minimum information requirements

that companies must distribute to affected parties prior to filing the

application.

The EUB has recently taken the lead role in developing and designing

the appropriate dispute resolution process and reintroduced field facil-

itation to assist parties that may be in dispute over energy

development applications. The British Columbia Oil and Gas Commission

and the Saskatchewan

Surface Rights Board have

also adopted the EUB’s

public consultation guide-

lines in their energy

development processes.

Heightened community

awareness of energy devel-

opment has led to the

formation of over sixty

synergy groups throughout

the province. These synergy

groups are composed of concerned landowners, company representa-

tives, local business people and environmental organizations. The first

synergy group conference is slated to take place in Red Deer, Alberta on

February 24-26,2002.

It is imperative that if the energy industry intends to coexist with an

ever increasing land use base that the public must be kept aware of its

activities and have the opportunity to respond with their concerns.

It just makes common sense!

Guide 56 is in the process of being revised as a result of the recom-

mendations put forth by the public safety and sour gas committee.

Look for changes in the fall of 2002.

About the author: Bob Garies is a professional landman and is

President of Consultation & Compliance Inc., a new company

that specializes in Public Consultation Programs and Land

Acquisition for the Energy Industry. He is Co-instructor in teach-

ing the Guide 56 and 60 Course for CAPL, and represents CAPL

on the EUB Standing Committee for the Appropriate Dispute

Resolution process. Bob is also a member of the Field

Acquisition and Management Committee for CAPL.

“The EUB considers itparamount that effectivecommunication take placeamong industry, govern-ment, and the public sothat concerns may beraised, properly addressed,and if possible resolved.”

“I want to takethis opportunityto advise youthat the govern-ment of Albertahas no intentionof altering thecurrent policy.”

N N

N Pa g e 4mar 2002

In this second part of a two-part series on Rights of First Refusal, ForbesNewman examines the implications of the new Limitations Act (Alberta) andissues relating to restitution on improperly transferred property.

LIMITATION ISSUESIn any discussion of ROFRs with respect to land in Alberta, it is also important tobe aware of the provisions of the Limitations Act (Alberta) (the “Act”), which wasproclaimed in force on March 1, 1999. ROFRs are frequently encountered in thecontext of a due diligence investigation of the vendor’s title in an oil and gastransaction and familiarity with the provisions of the Act is essential.

Not uncommonly, the person engaged to conduct the due diligence investigationwill determine that, at some point during the title chain, a ROFR that was heldby a third party was not properly handled. The party that was entitled to theROFR notice may not have been given the notice, with the result that there is acloud on the title of the vendor to the subject property.

A ROFR with respect to Crown Land is not an interest in land. A ROFR withrespect to freehold lands in the provinces of Alberta and British Columbia is, bystatute, an interest in land. The importance of a ROFR being or not being aninterest in land focuses on the issue of whether a third party acquiring an inter-est in the subject land would nevertheless be subject to the ROFR. The SupremeCourt of Canada in the Canadian Long Island 5case , held that, even though aROFR is not an interest in land, a purchaser who acquires interests in landsubject to a ROFR of which it either was aware or could have been aware, willnevertheless be bound in equity to honour the ROFR.

The cloud on title based on the outstanding ROFR becomes a significant prob-lem for each vendor and purchaser from that point forward, subject to theprovisions of the Act.

Limitations Act (Alberta)The Act provides in section 3(1) that:

“if a claimant does not seek a remedial order within(a) 2 years after the date on which on which the claimant first knew, or

in the circumstances ought to have known, (i) that the injury for which the claimant seeks a remedial order had

occurred, (ii) that the injury was attributable to conduct of the defendant, and(iii) that the injury, assuming liability on the part of the defendant,

warrants bringing a proceeding, or

(b) 10 years after the claim arose, whichever period expires first, the defendant, upon pleading this Act as adefence, is entitled to immunity from liability in respect of the claim.”

A “remedial order” is defined in section 1(j) to mean: “…a judgment or an order made by a court in a civil proceeding requir-ing a defendant to comply with a duty or to pay damages for theviolation of a right, but excludes

(i) a declaration of rights and duties, legal relations or personalstatus,

(ii) the enforcement of a remedial order,(iii) judicial review of the decision, act or omission of a person,

board, commission, tribunal or other body in the exercise of apower conferred by statue or regulation, or

(iv) a writ of habeas corpus;”

Pursuant to section 1(a) “claim” is defined to mean “a matter giving rise to acivil proceeding in which a claimant seeks a remedial order.” Pursuant toSection 1(f) “injury” includes economic loss, non-performance of an obligation,or the breach of a duty. Pursuant to section 3(3), for the purposes of subsection3(1)(b) “a claim based on a breach of a duty arises when the conduct, act oromission occurs.”

The Act also contains a provisions that allows the parties to an agreement toextend the limitation period for actions arising under the agreement.

Remedial OrderThe initial question to ask in determining whether there is a limitations defenceto any particular ROFR issue is to assess whether a remedial order would berequired in order to enforce the ROFR. Most typically, one would be dealing withsituations where property had been transferred to a purchaser where it may ulti-mately be found that a third party was entitled to a ROFR. The ROFR holderpresumably would either seek an order requiring the purchaser to comply withthe ROFR and send out a ROFR notice as of the date that the transfer took place(with values at that date), transfer the property back to it or the ROFR holderwould sue the vendor for damages for failure to properly honour the ROFR. In anyevent, most probably a remedial order would be required requiring a defendantto comply with a duty. A mere “declaration of rights and duties,” which bysection l(j) is excluded from the definition of a remedial order and is thereforenot subject to any statutory limitation in Alberta, would presumably not beadequate in the circumstances.

Limitation PeriodIf we are correct that in most instances a remedial order would be required inorder for the holder of the ROFR to obtain appropriate redress from the Courts, thenext issue would be to determine whether the limitation period had expired.Subject to an agreement between the parties extending the limitation period or tothe provisions of the Industry Agreement, which we will discuss shortly, the limi-tation period would expire on the earlier of two years after the date on which theclaimant first knew, or on the circumstances, ought to have known, that thesubject property had been transferred in breach of the ROFR, or ten years afterthe property had been transferred in breach of the ROFR.

Industry AgreementThe Petroleum Accountants Society of Canada formed a committee to review theAct in light of the specific concerns of the oil and gas industry, particularly withrespect to audit issues where it was generally felt that a two-year limitation period

N Pa g e 5mar 2002

was not adequate. As a result, a number of participants in the oil and gas indus-try entered into an agreement dated January 1, 2001 entitled “Industry AgreementRegarding Limitations” (“Industry Agreement”), the effect of which was to extendthe limitation period to four years for claims arising under many standard oil andgas agreements that were in effect prior to February 15, 2001, provided the signa-tories to such agreements were also signatories to the Industry Agreement.

From a practical standpoint this means that in assessing the limitations periodwith respect to a ROFR issue, it is necessary to determine whether the parties tothe relevant agreement were signatories to the Industry Agreement, in which casethe basic limitation period would be extended from two years to four.

AWARENESSIn most instances, assuming that the ROFR holder was not otherwise aware, theROFR holder will become aware of the breach when a Notice of Assignment orNovation Agreement with respect to the subject property is delivered to it.Subject to the Industry Agreement, the ROFR holder would have two years fromthat date within which to commence an action, failing which the claim would bestatute-barred.

Assuming that, for whatever reason, Novation Agreements or Notices ofAssignment were not sent out or were not received or there was no other reason-able basis upon which the ROFR holder could have become aware of the claim, theclaim arguably would be statute-barred within ten years of the date on which theproperty was improperly transferred or the ROFR notice should have been sent.

Trust RelationshipsIt is not an uncommon occurrence that a purchaser will acquire oil and gas inter-ests on behalf of one or more unnamed beneficiaries who have contributed to theacquisition of the subject property. The purchaser holds the interest which itacquires in trust for and on behalf of these parties, usually pursuant to a decla-ration of trust which may be simultaneously executed at the time of the purchase.

If the property is subject to a ROFR, a purchaser may assume that, if the notice ofthe ROFR was given naming the purchaser only and a waiver is given, the ROFR hasbeen properly handled. The fact that the purchaser is holding the subject propertyon behalf of unnamed beneficiaries, it is assumed, is covered by any waiver of theROFR given at the time of the purchase. It is my view that the holders of the bene-ficial interests under the declaration of trust may be potentially subject to claims bythe holders of the ROFR on the basis that their acquisition of a beneficial interest isa subsequent disposition by the purchaser to them which would automatically trig-ger the ROFR. In effect, the waiver of the ROFR in favour of the purchaser would notcover the subsequent disposition by the purchaser to the various beneficial owners.

Frequently, these circumstances are undisclosed and the holder of the ROFR isnot aware of the existence of the beneficial interests. Assuming that the holderof the ROFR did not know and in the circumstances would not have had the abil-ity to know of the existence of the beneficial interests, the potential ROFR claimwould expire ten years after the execution of the declaration of trust in favour ofthe beneficial owners.

Subsequent DispositionsThe Act also covers situations where properties have changed hands a number oftimes and provides in subsection 3(2) that the limitation period established by

subsection 3(1)(a) begins “(a) against the successor owner of a claim wheneither a predecessor owner or the successor owner of the claim first acquired orought to have acquired the knowledge prescribed in subsection 1 (a):”. The effectof this provision is that the limitation period would commence when the originalowner or any other predecessor in title knew or ought to have known of the breach.

SummarySolicitors and oil and gas consultants involved in due diligence investigationsinvolving ROFRs covering Alberta lands should become fully familiar with theprovisions of the Limitations Act so that ROFR deficiencies are disclosed in atitle review and an appropriate analysis takes place to determine whether or notthe limitations period has expired. If it can be determined with reasonablecertainty that the holder of the ROFR had knowledge of, or in the circumstancescould have had knowledge of a breach of the ROFR, subject to the provisions ofthe Industry Agreement, it appears that the ROFR claim will have expired twoyears after the ROFR holder became aware of those circumstances. If a reviewof the file does not indicate that the ROFR holder had any ability to becomeaware of the breach, then the ROFR claim would appear to expire ten years afterthe breach occurred.

PRINCIPLES OF RESTITUTION AND ROFRsIn reviewing the general area of ROFRs one issue that has not received muchattention in the literature is the question of the potential risks to the party whoacquires an oil and gas property subject to an outstanding ROFR. The corollaryto that, of course, is to determine what remedies are available to a ROFR holderin the event it subsequently discovers that property has been improperly trans-ferred to a purchaser subject to a ROFR.

Several Canadian cases have considered the issue of whether an oil company,which drills a well under what turns out to be an invalid freehold lease, is liableto account for production revenue received and is entitled to compensation for itscosts. The cases are very inconsistent in offering clear principles on this issue. It is important to have an understanding of these decisions and to considerwhether the principles they stand for may also apply where land has been trans-ferred to and held by a purchaser where there is an outstanding ROFR.

The Weyburn CaseIn the case of Sohio Petroleum Company v. Weyburn Security Company Limited 6

a lease was found to have terminated as there was no production at the end ofthe primary term. The action challenging the lease was commenced seven yearsafter the well had come on production with the result that the well had paid outbefore the matter was brought to the attention of the courts. The SaskatchewanCourt of Appeal7 noted that the company was not aware of its position beingchallenged until the writ of summons was served on it and, as a result, held thatthe company would only have to account to the owner for production receivedafter the date the writ of summons had been served. The solution was approvedby the Supreme Court of Canada but the principles upon which the courtreached its conclusions were not clearly articulated.

The Weyburn case is an important decision for our purposes because it dealtwith the question as to whether a lessee under a terminated lease has an obli-gation to account for past production. This issue in the context of anoutstanding ROFR on a sale of oil and gas properties will be dealt with in greaterdetail later.

continued p. 7

N Pa g e 7mar 2002

The Ballem CaseIn the Alberta case of Republic Resources Ltd. v. Ballem 8 a well was drilled on landthat an oil company had previously leased. When the well itself was completed thelease had expired and as a result the company sought relief from the Court that it wasentitled to restitution for costs it had expended in drilling the well.

The court held that the lease was invalid and also denied the claim for restitution.

In order for the drilling company to obtain compensation the court concluded thata special relationship must exist between the parties at all relevant times, andthere must be either:

(a) an expressed or implied request by the owner for the benefit in ques-tion; or

(b) alternatively, subsequent acquiescence by the owner in the perform-ance of the benefit and therefore an adoption of such benefit withknowledge thereof.

The court denied the claim in restitution on the basis that the owner had notrequested the well to be drilled.

Applying these cases to a situation where oil and gas properties have beenimproperly transferred subject to a ROFR it would seem unlikely that a purchaserin such circumstances would be able to satisfy these criteria. It would be doubt-ful if a special relationship would exist between the purchaser and the third partyentitled to the ROFR. Equally, in most circumstances it is unlikely that a holder ofa ROFR would have expressly or impliedly requested the purchaser to drill wells ormake improvements on the lands.

The Hill CaseA similar result was reached using different reasoning in the case of Hill Estate v. Chevron Standard Ltd. 9 In the Hill case drilling operations were conducted onland pursuant to a lease which the appellate court found to be void. Chevron, asthe lessee, sought compensation for costs it had incurred in drilling the well onthe principle of unjust enrichment. The court denied this claim. The court appliedthe test for unjust enrichment that had been enunciated by the Supreme Court ofCanada in Pettkus v. Becker ,10 which determined that to find unjust enrichmentthree elements had to be present:

(a) an enrichment;(b) a corresponding deprivation; and(c) no juristic reason for the deprivation.

While the Court in the Hill case held that there had been an enrichment and acorresponding deprivation, it concluded there was a juristic reason for the depri-vation, in that Chevron had no lease on the lands. Chevron was a trespasser andtherefore was not entitled to be conducting operations on the lands.

Applying this reasoning to circumstances where property was transferred in viola-tion of an outstanding ROFR, the ROFR holder would generally be successful on thebasis that there would be a juristic reason for the deprivation, the purchaser havingacquired the property subject to an outstanding ROFR. The purchaser would there-fore be denied compensation on the basis of unjust enrichment.

Good Faith – Bad FaithIn this regard it is also important to note that there is an extensive body of case

law in the United States which deals with the rights and obligations of a partywhich carries out operations on a prospect which it does not own. Generally, theparty’s position depends upon whether it is determined to be a “good faith” or a“bad faith” trespasser, the latter being required to account for all minerals takenfrom the lands without being given any credit for money spent.

John Ballem lists several of the major factors which have been considered by U.S. courts in determining what constitutes good faith:

“(a) an honest belief by the lessee as to the validity of the title; (b) an inno-cent mistake as to the location of the boundary of the lands; (c) anambiguous instrument in the chain of title, whereby the trespassermakes an erroneous but good-faith construction thereof; (d) operationsconducted by the trespasser after a favourable judicial title determina-tion that is later reversed; (e) whether or not there has been notice of theadverse claim before entry in drilling and reasonableness of the tres-passer’s belief as to the right to drill; (f) the reliance by the trespasser onthe advice of counsel; and (g) any action or other conduct of the ownerthat estops him from asserting that the trespasser was in [bad] faith.”11

Once again, each situation would be fact-specific. Assuming these principleswould similarly be applied to a ROFR situation in Canada, the major hurdle for apurchaser would be to establish that it had an honest belief as to the validity of itstitle. Generally, a purchaser will have conducted some form of due diligence beforecompleting a purchase of oil and gas properties and the issue would be whether,through the conduct of its due diligence, it knew or ought to have known of the exis-tence of the ROFR. Assuming that the existence of the ROFR was or would have beendisclosed by a review of applicable agreements available to the purchaser, this maybe a difficult challenge to overcome. If the purchaser was aware of the potentialROFR and had legitimate reasons for believing that it was not applicable it may bepossible for a purchaser to argue that it was acting in good faith.

In most circumstances, it is likely a purchaser acquiring property subject to anoutstanding ROFR would most often be considered a “bad faith” trespasser andthus would not only be required to account for past production but would not beentitled to compensation for improvements that it had made.

The Law of Property ActWith respect to lands in the Province of Alberta, consideration must also be given asto whether a purchaser would be entitled to rely upon section 60 of the Law ofProperty Act (Alberta) for costs incurred prior to the ROFR issue being discovered.

Section 60 of the Law of Property Act provides as follows:(1) “When a person at any time has made lasting improvements on land

under the belief that the land was his own, he or his assigns(a) are entitled to a lien on the land to the extent of the amount by which

the value of the land is enhanced by the improvements, or(b) are entitled to or may be required to retain the land if the Court is of

the opinion or requires that this should be done having regard to whatis just under all the circumstances of the case.

(2) The person entitled or required to retain the land shall pay any compen-sation that the Court may direct.”

continued p. 8

N Pa g e 8mar 2002

P E T R O L E U M J O I N T V E N T U R E A S S O C I A T I O N I S P L E A S E D T O P R E S E N T A

Spring Reception & Dinner MeetingFeaturing Noted Speaker and Commentator, Rex Murphy

Entertainment byBlues MusicianDonald Ray Johnson

R e g i s t e r o n l i n e a t w w w. p j v a . c a o r p h o n e t h e P J VA o f f i c e a t ( 4 0 3 ) 2 4 4 - 4 4 8 7 .

Cocktail Reception: 5:30 pm – 6:30 pmDinner: 6:30 pm – 7:30 pmGuest Speaker: 7:30 pm – 8:30 pm

Rex Murphy

Ticket prices for this special event are $75.00 per person including GST.

Wednesday, March 20, 2002Palomino Room, Round-Up Centre1410 Olympic Way SEStampede Park – Calgary, Alberta

ApplicationFirstly, it must be noted that the Law of Property Act would only apply to claimswith respect to freehold property and would not apply to ROFRs on Crown lands.Based upon the wording of the section as well as judicial commentary, it wouldbe necessary for a purchaser to satisfy a court that the improvements it had madeto the oil and gas properties are “lasting” and that it had made the improvementsunder the belief that the oil and gas properties were its own.

ImprovementsPresumably the first test would be easily satisfied in that most improvements,including wells or other facilities, would be considered “lasting improvements”assuming they were successful. It would appear unlikely that a dry hole (except invery unusual circumstances) would be classified as an “improvement.” As aresult, the applicability of this section will largely be determined by whether thepurchaser at the time of the improvements were made was under the belief thatit was entitled to the oil and gas properties in question.

Belief in OwnershipAs to what a purchaser must establish in order to show a belief that the land wasits own, the Alberta Court of Appeal in Mund v. Medicine Hat (City),12 stated:

“[I]t is clear from the wording of Section 60 that the Plaintiff must be underthe belief that he owned the land. That belief need not be reasonable, so longas it is honestly held. In that regard, the reasonableness of the belief will berelevant as to whether the belief was in fact honestly held: see Welz. v. Bady,[1949] 1 D.L.R. 281 (Man. C.A.) and Maly, [Maly v. Ukrainian CatholicEpiscopal Corporation (1976), 70 D.L.R. (3d) 691 (Alta. Dist. Ct.)]. To summa-rize, the Plaintiff must establish that he had an honest belief that he ownedthe land upon which the lasting improvements were made.”

The Court in the Maly case, which was relied upon in Mund, had recognized thatthere was a difference of opinion on whether or not a mistake as to title must bereasonable. The Court concluded at pages 692-693 that in those earlier decisions:

“there were factors which suggested inquiry and their comments must, ofcourse, be read in that light. The courts will not permit the claimant to closehis eyes to inquiries which the circumstances commanded. I would be inclinedto say that in those circumstances the mistake was not bona fide.”

Once again, under this test the entitlement of a purchaser would be fact-specific.Assuming normal due diligence had been conducted it may be difficult for the

purchaser to establish that it had an honest belief that it was entitled to the land.If the existence of the ROFR through normal due diligence would have beendisclosed but was inadvertently missed, this may disentitle the purchaser to relief.If the ROFR was discovered and there were reasonable grounds for believing thatit was not applicable then the purchaser may be able to claim relief on this basis.

RemedyAssuming a claim under section 60 were available, the most likely remedy avail-able to a purchaser would be a lien on production for the amount of money itexpended in developing the lands. A more literal interpretation of the sectionmight suggest that the purchaser would have a lien on production for the increasein the value of the reserves which its improvements had established. In an oil andgas context, however, such a result would make little sense since it would poten-tially give the purchaser the full value of the lands leaving the ROFR holder (thewinner in the lawsuit) with essentially nothing of value.

CONCLUSIONSIn conclusion, the Chase decision merits serious consideration with respect tothe allocation of value to ROFR properties in large asset dispositions. It is alsoimportant to have a thorough understanding of the new Limitations Act in thecontext of due diligence reviews and to be cognisant of the potential economicimplications to a purchaser in acquiring a property subject to an outstandingROFR. This discussion, it is hoped, will lead to a greater understanding of thesethree important issues.

Notes5. GATX Corp. the Hawker Siddeley Canada Inc., [1996] O.J. No. 1462.

27 B.L.R. (2d) 251.6. (1970), 74 W.W.R. 626 (S.C.C.).7. (1969) 69 W.W.R. 680 at 687.8. [1982] 1 W.W.R. 692 (Alta. Q.B.).9. [1993] 2 W.W.R. 545 (Man. C.A.).10. [1980] 2 S.C.R. 834.11. John Bishop Ballem, The Oil & Gas Lease in Canada, 1999, 3rd Edition,

University of Toronto Press.12. [1988] A.J. No. 435 (C.A.).

ACKNOWLEDGEMENTSThe writer wishes to acknowledge the valuable assistance of Brian Bidyk and Paul Edwards in the prepa-ration of this paper.

J. Forbes Newman practises extensively in the oil and gas, and corporate commercial areas. Mr. Newmanhas presented numerous papers on oil and gas topics, is a member of a number of industry related organ-izations and recently served on the CAPL 99 Freehold Lease Committee. Mr. Newman is currently a partnerwith Gowling Lafleur Henderson LLP.

N

N Pa g e 9mar 2002

Visit us at www.pioneerland.ca

COMPLETE LAND, ENVIRONMENTAL AND EMERGENCY RESPONSE SERVICES

FOR THE ENERGY INDUSTRY.

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EDMONTON T (780) 462-4486, F (780) 468-4325E lsmeland@pioneerland.ca

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THEY SPENT LONG DAYS

OPENING FRONTIERS,

BLAZING TRAILS,

STAKING CLAIMS,

AND SETTLING

THE LAND.

THE REALLY

TOUGH STUFF,

THEY LEFT TO US.

Oil and GasTaskforce

UpdateThe Alberta Securities

Commission (ASC) and

other members of the

Canadian Securities

Administrators are

seeking public

comment on pro-

posed new oil and

gas disclosure stan-

dards. Proposed National

Instrument 51-101 Standards

of Disclosure for Oil and Gas Activities

has been developed by the ASC in response to recommendations

issued in January 2001 by the ASC Oil and Gas Taskforce.

Proposed NI 51-101 would require reporting issuers to file, each

year, a statement setting out estimated oil and gas reserves and

related information accompanied by an independent qualified

evaluator's report, together with other information concerning

oil and gas activities. NI 51-101 incorporates reserves termi-

nology developed by the Canadian Institute of Mining,

Metallurgy & Petroleum and evaluation standards being devel-

oped by Canadian members of The Society of Petroleum

Evaluation Engineers.

Public comment is requested by April 30, 2002.

In the January 2002 issue, The Negotiator included the ASC Oil &

Gas Taskforce’s recommendations on industry reserve disclosure

requirements. The Proposal was released on January 25, 2002 and

is available on the ASC website at www.albertasecurities.com

under the links Capital Markets – Oil & Gas. N

THE COMMITTEES IN ACTION feature is

back in The Negotiator after a brief hiatus, report-

ing on the very important work that the various

committees perform to help ensure the successful

operation of the CAPL organization as well as to

give credit to the people that volunteer their very

precious time and effort for the benefit of all

CAPL members. At this time, I would also like to

thank the previous contact person, Stephen

White, for his efforts in making this monthly

feature a success.

This month we feature the work of two very busy

groups: The Public Relations and Education

Committees.

Public Relations Committee

The Public Relations Committee is proud to have

recently successfully completed the CAPL Commemorative History Book,

which is an entertaining and enlightening reflection of our past 53

years of association history. All active and associate members will be

receiving a complimentary copy (your copy may be picked up at the

CAPL office). Additional copies will be used to promote the CAPL within

the community, the media, educational institutions, industry associa-

tions and governments. Thanks to all those who worked diligently to

see this project to fruition including Ron Vermeulen, Ned Gilbert, Gloria

Boogmans, Lawrence Fisher and Evelyn Vandenhengel. Special thanks to

our writer, Shauna Kelly and our layout/design contractors, Thinkinc.

Committees in Action

Other projects that are currently in progress:

• CAPL Booth: The CAPL exhibited at the Mount Royal Career Fair on

February 13, 2002. Booth repairs and a re-design of the display

panels are scheduled in the upcoming months.

• CAPL Calendar: Currently formulating ideas and developing plans to

re-vamp and enhance the CAPL calendar.

• Promotional Items: We have recently selected a number of new

promotional items. Watch for them on the utilities page of the CAPL

website (www.landman.ca).

• CAPL Video: The new CAPL video is now available for viewing on

the website.

The Public Relations Committee would welcome new enthusiastic

volunteers to assist us on one or more of our sub-committees.

Please contact Evelyn Vandenhengel, Committee Chairman

(294-3602) if you are interested.

Education Committee

The roughly 30-member Education Committee has been very busy

preparing for the new and upcoming courses that are being offered by

the CAPL. There will have been nine courses offered and completed

between the time frame of mid-January through to mid-March.

Also, there are two very new courses that the Committee is extremely

excited about: Northern Issues and An Interpretive Approach to

Dealing with ROFR Issues.

The Northern Issues course is intended for any person presently explor-

ing for, or intending to explore for, and develop oil and gas properties

north of 60. The ROFR Issues course is intended for senior level land-

men looking to expand their understanding and skills in order to

analyze the various legal and operational issues surrounding ROFRs.

Please check the CAPL Seminar Calendar or The Negotiator for a course

that may interest you.

(Contact: Nancy Wilson 517-7245)

This column recognizes the fine work being performed by volunteer

CAPL members, on behalf of the Association, for the benefit of the

industry as a whole. A contact person has been identified so you can

offer your views and input on any initiatives in progress. Please address

the applicable contact person listed with any advice or concerns you

may have.

Mike G. Miles

[ph] 403-231-0241

Email: Mike_Miles@anadarko.com

N

N Pa g e 1 2mar 2002

The key issues discussed and resolved at the CAPL Executive Meeting on

February 5, 2002 were:

• Guests Brian Birchall, Chairman of the 2002 Conference, and Jeremy Newton,

Program Co-Chair, advised that the Program Committee is looking at provid-

ing a portion of the Conference Program on the internet and provided the

following comments:

• Members who are unable to attend the Conference could log onto the internet and access

the Program for a nominal fee; and

• The Committee is looking at adding an ethics portion to the Program, which would enable

members of the CAPL and AAPL to obtain credits towards their P.Land Accreditation.

Guy Anderson will check with the Professionalism Committee for their input.

The Board agreed that a telephone poll be taken for feedback from members to see if this would

be of interest to them.

• Lawrence Fisher provided one student and eight active membership applications to the Board, all

of which were approved.

• Dave Horn submitted a Treasurer’s Report as at February 5, 2002 showing CAPL investments total-

ing $695,621.44 Canadian and $26,709.35 U.S. with a cash balance of $7,731.31 Canadian and

$171.99 U.S.

• Dave Horn submitted the first draft of the 2002 Budget to the Executive reflecting a deficit.

Directors were requested to review their portfolios and resubmit numbers on the basis of a

breakeven budget.

• Dave Horn distributed the 2001 unaudited financial statements, which reflect net earnings of

$84,635.02 before depreciation expense. Depreciation will be approximately $10,000.00 to

$15,000.00.

• Elizabeth Burke-Gaffney submitted an updated Social Committee Event Planning Guide for feedback

from the Executive. Once finalized, the Guide will be distributed to the various social committees.

• Lawrence Fisher advised that due to the aging population of the CAPL membership, life insurance

rates have increased substantially. He is currently looking at rates with other carriers, which have,

so far, been very similar.

• Dave Bernatchez advised that the Education Committee submitted the EUB Guide 56/60 seminar

to the AAPL Apex Awards for Best Education Seminar.

• Suzanne Stahl advised that the Commemorative Book Since It Began should be delivered to the

CAPL office by February 21, 2002. The Public Relations Committee has submitted an application

to the AAPL Nomination Committee for consideration of an Apex Award.

• Kevin Burke-Gaffney advised that the 2002 Nominating Committee is currently seeking candidates

for the 2002-2003 Elections.

• Colin McKinnon advised that the next General Meeting will be Management Night with guest

speaker Lloyd Axworthy. The Meeting will be held February 20, 2002 at the Hyatt Regency and all

members will be required to purchase a ticket.

• Colin McKinnon advised that the March General Meeting will be a networking evening at Brewsters

Eau Claire, March 20, 2002.

Elizabeth Burke-Gaffney, P.Land

Secretary/Director, Social

Board Briefs2001–2002

CAPL Executive

President

C.A. (Colin) McKinnon, P.Land[ph] 699-7305 [fax] 234-6671

Vice-President

C.A. (Carolyn) Murphy, P.Land[ph] 517-8794 [fax] 517-8798

Secretary/Director, Social

M.E. (Elizabeth) Burke-Gaffney, P.Land[ph] 264-7377 [fax] 266-6669

Director, Business Development

N.K. (Neil) Cusworth, P.Land[ph] 289-7396

Director, Communications

R.K. (Bob) Howard, P.Land[ph] 303-8642 [fax] 233-7463

Director, Education

D.J. (Dave) Bernatchez[ph] 231-1242 [fax] 571-8118

Director, Field Management

B.D. (Brad) Goodfellow[ph] 265-2230 [fax] 265-2227

Director, Finance

D.B. (Dave) Horn[ph] 290-2113 [fax] 290-2440

Director, Member Services

L.P.J. (Lawrence) Fisher[ph] 232-7622 [fax] 232-7429

Director, Professionalism

G.R. (Guy) Anderson, P.Land[ph] 221-0838 [fax] 221-0875

Director, Public Relations

S. (Suzanne) Stahl[ph] 571-5262 [fax] 571-5266

Director, Technology

G.L. (Gjoa) Taylor, P.Land[ph] 699-7304 [fax] 234-6671

Past President

K.F.J. (Kevin) Burke-Gaffney, P.Land[ph] 298-4403 [fax] 298-8444

N

March General Meeting

Networking MeetingWednesday, March 20, 2002

Brewsters Eau Claire

Cocktails & Hors D’oeuvres: 5:00 p.m.

Cash Bar

Members must be fax their response to the CAPL

Office (263-1620) by 12:00 noon, Friday March 15,

2002. Tickets for guests are available at the CAPL

office until 12:00 noon, Friday March 15, 2002, at a

cost of $32.10 (GST included). Please contact the

CAPL office (237-6635) for further information.

April General Meeting

Elections and 15th Annual MeritAwardsWednesday, April 10, 2002

The Westin Hotel

Cocktails:5:00 p.m.

Dinner: 6:00 p.m.

Members must fax their response to the CAPL Office

(263-1620) by 12:00 noon, Friday April 5, 2002.

Tickets for guests are available from the CAPL Office at a

cost of $42.80 (GST included). Please contact the CAPL

Office (237-6635) for further information.

Meeting Announcements

Bob Garies is a Professional Landman and is President of

Consultation & Compliance Inc., a new company that

specializes in Public Consultation Programs and Land

Acquisition for the Energy Industry. He is Co-instructor in

teaching the Guide 56 and 60 Course for CAPL, and repre-

sents CAPL on the EUB Standing Committee for the

Appropriate Dispute Resolution process. Bob is also a

member of the Field Acquisition and Management

Committee for CAPL.

Thursday, April 4, 2002, The Calgary Westin

Reception at 11:30 a.m. Lunch at 12:00 noon

Members must fax their registration to the CAPL Office

(263-1620) by 12:00 noon, Tuesday April 2, 2002.

Members and Nonmembers $32.10 (GST included).

Please contact the CAPL Office for further information.

Topical Issues LuncheonExpectations in Energy Development

Applications: Guide 56 and Public InvolvementSpeaker: Bob Garies

N Pa g e 1 4mar 2002

If there is anything more interesting than

working as a field landman acquiring surface

land interests in the oil patch, it has to be

spending time within the CAPL’s Field

Acquisition and Management (FAM) Committee

and it’s subcommittees. The issues that come

to the attention of the Committee can have

potentially serious consequences for the whole industry. Over the last

few years the FAM Committee has

achieved, through relentless hard

work, a position of respect amongst

our peer associations. When a land

issue arises that could affect the

industry, the opinion of the FAM

Committee is ultimately requested and

then accepted as a well-informed

response. With the public, govern-

ments and industry taking a keener

interest in surface land related issues

these days, it is very gratifying to see the CAPL and associates working

to clarify issues and solve problems. A good example is the Access to

Land seminars that have taken place during the CAPL Conference in

Vancouver and again at the Palliser Hotel in Calgary this past November.

By simply discussing and addressing issues, the process of acquiring

interests in land, maintaining relationships and moving ahead through

business can be seen to benefit all of the participants.

Within the past year, a closure to the grazing lease issue appears to be

imminent through the primary guidance of Deryl Hurl and Bob Garies.

Deryl and Bob have recently been involved in advising as to method-

ology of changes to the Surface Rights Act to allow for access to Crown

lands for the purpose of seismic activities. These changes were

accepted by the vast majority of agricultural groups and industry in

the Agriculture/Industry Steering Committee Report On Bill 31. The

final reading of Bill 31 is expected during the spring or fall sittings of

the legislature. This will end a long, hard fought battle for Deryl and

Bob and our hats are off to them for their tireless efforts.

Another issue that seems to have worked itself out for now is that of

annual compensation for linear developments. Although this issue is

not new, a small group has recently come together to try to force

changes on the oil and gas industry and others. The FAM Committee was

made aware of this issue through its government contacts and attended

the October 16, 2001 presentation made to the Standing Policy

Committee on Energy and Sustainable Development by the proponents

of the issue. The FAM Committee immediately made the issue known to

several key associations within the industry in an effort to create a

coalition and provide government and the public with reasonable objec-

tions to such changes in policy. Again, the FAM Committee, lead by Bob

Garies, Deryl Hurl, Ray MacEachern and surface rights specialist – lawyer

Ron Swist, with the backing of the CAPL Board of Directors, put

together the funding and the initiative to ultimately bring closure to

this issue. The coalition obtained a letter from The Honorable Murray

Smith, The Minister of Energy for the

Government of Alberta, stating that

landowners are currently adequately

compensated with a “one-time

payment” and that the Government of

Alberta will not alter the current

policy. Again, a suitable outcome was

brought about through the efforts of

the CAPL FAM Committee.

The Committee is presently monitoring

a task force set up by the AEUB to study the values of properties that

are adjacent to sour oil and gas facilities. The application of “injurious

affection” to adjacent stakeholders around sour facilities cannot be

taken lightly and a subcommittee of Jerry Hagen, Jason Gouw, Andrew

Fulford and Rob Telford has taken up the task to explain the industry’s

position to the AEUB and to keep the CAPL informed of its findings.

The CAPL Land Agent Mentoring Program is entering its second term

with the first term being regarded as an overwhelming success. The

increasing demands of complex legislation and other job pressures

imposed on today’s surface landman mean that practical work experi-

ence is becoming even more important to Olds College students.

Providing this experience has been fulfilling to both the Mentor and

Protégé and the concept is providing a great connection between the

Land Agent Program and industry.

As a landman and the current director of the Field Acquisition and

Management portfolio I would like to take this opportunity to thank

all of the various Committee members and volunteers within the CAPL

for their dedication to making this Association what it is today – truly

world class and something to be proud of.

Brad Goodfellow

Director, Field Management

Message from the Executive

N

“When a land issue arises that could

affect the industry, the opinion of

the FAM Committee is ultimately

requested and then accepted as a

well-informed response.”

N Pa g e 1 5mar 2002

The CAPL Education Committee is pleased to present the following courses:

Northern Issues – NEW!

March 5, 2002

8:30 a.m. – 4:30 p.m.

This seminar is intended for any person presently exploring for or intend-

ing to explore for, and develop oil and gas properties north of 60.

Topics covered include introduction to the North, development of the

current oil and gas regime, the current regulatory regime, environmental

planning and compliance, aboriginal and community issues and Northern

Joint Operating Agreements.

Freehold Mineral Lease

March 7, 2002

8:30 a.m. – 4:30 p.m.

This course will include a discussion on the Torrens System in Alberta,

the concept of indefeasibility and its qualifications, the Assurance Fund,

historical searches, registration and caveats. An overview of the nature

and ownership of oil and gas in place will be covered. The principle

features of the lease and its standard clauses, the formalities of comple-

tion and execution of the lease, the termination of the lease and top

leasing are also discussed.

An Interpretative Approach To Dealing With ROFR Issues – NEW!

March 12, 2002

8:30 a.m. – 4:30 p.m.

This seminar is intended for more senior level landmen who are respon-

sible for analyzing various situations in which ROFR issues may arise

and recommending or implementing appropriate corporate responses

thereto. It will be presented in two parts. The morning will be devoted

to a presentation of legal principals which may be relevant to ROFR

situations and a suggested interpretative methodology for analyzing

and responding to unusual ROFR scenarios. In the afternoon, a senior

landman will join the lawyers in a round table discussion with the semi-

nar participants of ROFR issues and specific fact scenarios gathered by

the presenters and submitted to the panel by the course participants.

Prospective course participants are encouraged to submit their

favourite challenging ROFR problem to Harry Ediger at Storm Energy

Inc. prior to or at the seminar for consideration and discussion in the

afternoon round table.

Introduction to Surface Rights

March 21 & 22, 2002

8:30 a.m. – 4:30 p.m.

The working relationship between the administrator and landman will be

examined. Particular emphasis will be placed on the rights conferred to the

company through freehold surface leases, easements and rights of entries.

Crown documentation and procedures will be discussed. Legislation such

as the Alberta Surface Rights Act, the Alberta Landman Licensing Act,

Guide 60 for flaring and Guide 56 for applications will be reviewed.

Conventional Exploration Agreements (Junior Level)

March 26 & 27, 2002

8:30 a.m. – 4:30 p.m.

This seminar will focus primarily on reviewing typical agreements such

as farmouts, seismic options, poolings and joint operating agreements,

through the utilization of sample letter agreements, formal agreements

and precedent examples.

Appropriate Dispute Resolution

March 26 & 27, 2002

8:30 a.m. – 4:30 p.m.

The course is intended to make a difference in how you go about

“getting to yes” in your business dealings and in your life in general.

One will first get the “big picture” about the principles of interest-based

negotiation and mediation, followed by hands-on practice of these prin-

ciples using realistic upstream energy/oil and gas scenarios in which you

will learn the communication skills that are fundamental success.

Drilling and Production Operations

April 8 & 9, 2002

8:30 a.m. – 4:30 p.m.

This course will give a non-technical overview of oilfield operations in

Western Canada. The major topics of drilling, well completion and

production operations will be covered. In the drilling section, the

instructor will cover drilling and other operations such as logging, drill

stem testing, coring and cementing. The completion section will include

a discussion of the service rig, perforating, stimulation and downhole

equipment. Production operations will cover production facilities and

equipment, methods of artificial lift and enhanced recovery techniques.

Get Smart

For further information or to register, please contact the CAPL by phone (237-6635) or email (dgrieve@landman.ca), or complete the registration form provided on the blue insert and fax it to 263-1620. Please visit the CAPL website at www.landman.ca for full course descriptions.

N

N Pa g e 1 6mar 2002

The following excerpt is the third of a

series of historical accounts by oil & gas

geologist and historian, Aubrey Kerr.

The Devonian Age

As pointed out in last month’s article,

Edmonton could see the dawning of the

Devonian Age. They called industry in, in early

March, to tell them a new ballgame had started.

There were cries of outrage, but

to no avail. So on March 29,

1948, new regulations were

brought in to shrink the lease

blocks to 3x3 and 2x4 miles with

one-mile corridors. This was very

timely because Imperial Oil was

going to drill on their 200,000-

acre reservation northeast of

Edmonton on an anomaly they

thought was too large to be

believed. Sure enough, August

saw Redwater come in as a big

D-3 well.

Everyone at Imperial Oil then

stayed up nights trying to maxi-

mize their productive leases

while following the new rules.

Stepouts had to be at least

3-1/2 miles from the discovery. Crown

lease sales from 1948 to 1952 involved 136

parcels and yielded revenue to the

Edmonton coffers in the millions of dollars.

Strangely enough, Imperial seemed to be satis-

fied with their lease blocks and never bid on any

of the Crown reserve parcels that were posted.

This was not going to be repeated at their next big

discovery, Judy Creek, in 1959, where they made sure

they were successful in purchasing

nearly all the corridor acreage.

Aubrey Kerr was Imperial Oil’s LeducDistrict geologist from 1947–1949. Hewas at the Leduc discovery February 13,1947 and helped plan the 50thAnniversary held February 13, 1997. He isthe author of several oil industry historybooks, titled Atlantic No. 3 1948, Corridorsof Time, Leduc, Redwater, Judy Creek andBeyond and Corridors of Time II. In September of 1998, Kerr was inductedinto the Canadian Petroleum Hall of Fame.

For further historical accounts, stay tunedto The Negotiator. All of Kerr’s books areavailable at $20 each, no GST at 912-80thAvenue S.W. (253-8900).

N

N Pa g e 1 7mar 2002

N

DUST OFF THOSE CLUBS AND GET READY

because the 12th Annual University of

Calgary Petroleum Landman’s Charity

Golf Classic is quickly approaching.

On Friday, July 19, 2002 all the best

(and worst …) golfers in the indus-

try will chase their golf balls around

the Canmore Golf Club situated in

the heart of the Rocky Mountains!

The superb prizes and gracious dona-

tions of our sponsors last year created

a festive atmosphere for the 160

golfers. As the tradition goes, all proceeds

from the tournament were donated to a local

charity. In 2001, the Boys and Girls Club of

Calgary was extremely grateful for the funds we raised

through the silent auction, “Beat the Hack” and mulligan ticket

sales. Once a year, the U of C PLM Alumni, current students, and all

our industry counterparts get a chance to give back to the community

and make a difference. This year, we have again chosen the same

worthy charity of the Boys and Girls Club Community Services.

This year’s tournament will sell out very

quickly, so fill out the registration form and

send in your fees early so to avoid the

waiting list! The draw this year will be

limited to 144 golfers with a shotgun

start at 10:00 a.m. on July 19, 2002.

We encourage all golfers of all skill

levels to come and join in the action

as the focus is on raising money for

our charity, not qualifying for the

PGA tour! The organizing committee

guarantees a day of camaraderie, fun

and sport with a commitment to a

worthy charity. Welcome to the best tour-

nament around and in advance, thank you for

your generosity.

Looking forward to sunny skies and great golfing in the mountains.

Nathan MacBey

Chairman, PLM Charity Golf Classic

12th Annual University of Calgary Petroleum Landman’s Charity Golf Classic

2002 Board of DirectorsName Company Telephone EmailNathan MacBey Ketch Energy 261-2382 macbeyn@ketchenergy.comCraig Thomas Devon Canada 232-5531 Craig.thomas@devoncanada.comWalter Vrataric Forte 589-8204 vrataricw@shaw.caBrad Purdy Vintage Canada 218-6837 Brad.purdy@vintagecan.comKeenan Cannady Replay Resources 267-5530 Keenan@replayresources.comDave Boisjolie PanCanadian Energy 290-2956 David_boisjoile@pcenergy.comRyan Heath NCE Resources 218-8685 heathr@ncecalgary.comChris Bartole Talisman Energy 237-1191 cbartole@talisman-energy.comKevin Koopman Scott Land & Lease 261-6584 Koops35@hotmail.comGary Lebsack Northrock Resources 213-7510 Lebsack@northrock.ab.caJennifer McKennie PrimeWest 699-7306 jenniferm@primewestenergy.comMichelle Holt Argonauts Group 262-9609 ext. 106 mholt@argoenergy.comCory Stewart ARC 503-8633 cstewart@arcfinancial.comJohn Lawson AEC 231-6358 johnlawson@aec.caMarilyn Seward American Leduc 262-7552 ext. 235 marilyn@americanleduc.comJeremy Wallis PanCanadian Energy 290-3283 Jeremy_wallis@pcenergy.com

THE CAPL/PLM MENTORING PROGRAM can only be

successful if our PLM Majors have the opportunity to advance their

careers through summer, contract and full-time jobs that we as CAPL

members make available to them. This year is shaping up to be a very

difficult year for our PLM Majors as is outlined below:

3rd Year PLM Majors: 29 PLM Majors will be looking for summer jobs

4th Year PLM Majors: Only 4 out of 16 PLM Majors have part-time or

full-time jobs

If you can help out, visit the University PLM page on the CAPL

website at www.landman.ca or contact Ann Dyer at the University of

Calgary, Management Career Centre at 220-2154 or by email at

Adyer@mgmt.ucalgary.ca.

At this time we would like to welcome Ryan Zembiak as the PLUS 3rd year

representative on our Mentoring Committee. Ryan’s responsibility is to be

the 3rd year PLM student’s voice on this Committee. Our PLUS 4th year

representative is Sandy Sandhar. Her responsibility is to insure that the

concerns of the 4th year PLM students are passed on to the Committee.

We would also like to extend our Committee’s congratulations to Sandy

as one of this year’s CAPL Scholarship recipients. Congrats Sandy!

CAPL/PLM Mentoring ProgramCan You Help?

CAPL/PLM Mentoring ProgramCan You Help?

WWW.CANAM.COM (403)269-8887

By way of an update on the Committee’s activities we would like to

congratulate the PLUS Executive on hosting the Mentor Appreciation Night

on January 28 at the Barley Mill. It was a great evening of networking with

over 70 participants. It was an excellent venue for our 3rd year PLM

students to meet informally for the first time with their new Mentors as

well as an opportunity to discuss the Mentoring program with the 4th year

PLM students and their Mentors.

There are currently 29 Mentor-Student pairings for the 3rd year class and 18

pairings for our 4th year class. That means we have just slightly less than

100 active participants in this program. We wish to thank all of our Mentors

for “Sharing the Tradition” by giving freely of their time, knowledge and

experiences. Without your continued support this program would not exist.

Many of our Mentors have been involved with the program since its incep-

tion in 1999. Currently we have only 3 people on our “Mentors in Waiting”

program. People in this program do not currently have a student assigned

to them but would be available if one of the current Mentors is unable to

continue as a mentor for reasons of work load, health or change in job

status. We would like to have a minimum of 25 “Mentors in Waiting” to

assist with the current program or to allow us more flexibility in assigning

Mentors from year to year. We will say more about this in our next article.

If you would like to sign up as a “Mentor in Waiting” or would like more

information on the program please feel free to contact anyone on the

Committee listed below:

CAPL/PLM Mentoring Committee

Name Company Phone Fax E-mail Address

Ann Dyer University of Calgary 220-2154 282-2973 Adyer@mgmt.ucalgary.ca

Jennifer Klotz 519-6580 Jklotz@shaw.ca

Wayne Lannan Suncor 269-8130 269-6208 Wlannan@suncor.com

John Lawson AEC 231-6358 517-7581 JohnLawson@aec.ca

Arnold Lee AEC 515-2738 716-2400 Arnoldlee@aec.ca

Ted Lefebvre Corsair Exploration 237-5813 261-7871 Tlefebvre@corsair-cxi.com

Sandy Sandhar PLUS Rep (4th Year) 225-0008 282-0095 Skatwal@ucalgary.ca

Kim Schumann Vintage Petroleum 213-5305 262-7415 Kim.Schumann@vintagecan.com

Ryan Zembiak PLUS Rep (3rd Year) 281-9038 282-0095 Ryazem@hotmail.com

W.F. Lannan

Chairman, CAPL/PLM Mentoring Program

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PEX Prospects at NAPEKevin Burke-Gaffney, Chairman of The Prospect Exchange in 2002,

together with some of his team, Chris Bartole and Jennifer Gardner, Co-

Chairmen of the Administration Committee, Donna Phillips, Chairman of

the Program Committee, and Andy Gibson, Chairman of the Public

Relations Committee, attended the 10th anniversary of the NAPE Expo

in Houston, Texas January 29–31, 2002. CAPL is an Endorser of NAPE

which is presented annually by the American Association of Professional

Landmen and the Independent Petroleum Association of America.

Each year, the CAPL booth is prominently displayed along ‘Association

Row’ and is staffed by CAPL volunteers anxious to talk about The Prospect

Exchange. In every respect, The Prospect Exchange is a smaller version of

NAPE held each year in Houston at the George R. Brown Convention Center.

And like everything in Texas, the locals will tell y’all, NAPE is big. With over

800 booths and 8000 viewers, it requires two days just to have a peek at

what is being offered on the show floor. For that reason, stopping viewer

traffic to market The Prospect Exchange was a daunting task. But armed

with some very noticeable yellow cowboy shirts, an antique-type newspa-

per and thousands of our trademark red brochures, the CAPL contingent was

quickly welcomed to talk about The Prospect Exchange.

Every indication is that in addition to the American oil and gas compa-

nies already in Calgary and planning to attend The Prospect Exchange,

several American independents ‘new’ to the oil patch in Calgary will

attend the Exchange to view potential opportunities. One sizeable

American company which had already been given ‘the green light’ to

enter Canada was convinced without much difficulty to use The Prospect

Exchange as a measuring stick for the type of oil and gas plays presently

available in the Western Canadian Sedimentary Basin.

With a record number of 124 booths available to exhibitors at The

Prospect Exchange in 2002, the potential for this American or any

company to find its next joint venture couldn’t be greater. And with

companies slashing their exploration budgets or looking for partners to

share their exploration risks, The Prospect Exchange provides the exhibitor

and viewer alike the best opportunity to create value for their companies.

So whether it’s money or risk management, The Prospect Exchange is a

guaranteed opportunity for the explorationist to get A DEAL DONE.

For further information concerning The Prospect Exchange 2002 please call

the CAPL office or contact any one of the following Committee members:

Kevin Burke-Gaffney Chairman El Paso Oil & Gas Canada, Inc.Chris Bartole Co-Chairman, Talisman Energy Inc.

AdministrationJennifer Gardner Co-Chairman, Calpine Canada Resources Ltd.

AdministrationBrad Purdy Chairman, Vintage Petroleum Canada, Inc.

Business DevelopmentGreg Strachan Chairman, Canadian Forest Oil Ltd.

Marketing (N.A.)Dave Dunkley Chairman, Talisman Energy Inc.

Marketing (Int’l)Joe Iaquinta Chairman, Independent

Marketing (Gov’t)Donna Phillips Chairman, Program Direct Energy ResourcesAndy Gibson Chairman, Muirhouse Energy Consultants Ltd.

Public Relations

Kevin Burke-Gaffney, P.Land

Chairman, The Prospect Exchange

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Kevin Burke-Gaffney and Andy Gibson wrangle in some Americans at NAPE

N Pa g e 2 1mar 2002

Effective March 1st, 2002 all mail will be sent to

members via the addresses in the member roster

on our website. We are asking our membership to

be responsible for updating any changes to their

personal information. This will ensure our roster is

kept current and assist the office staff.

To access the roster, go to the CAPL homepage at

www.landman.ca, click on the “Members only

Access” link located on the upper left hand corner

of web page, type in your user name and password

and submit.

Your user ID is your last name followed by your

first name. Your initial password is your birth date

in MMDD19YY (i.e. someone born on January 2,

1960, would enter 01021960). After initial log in,

please proceed to change your password. The

change password function is found under “Change

Password” on left side.

If you have any problems logging in please contact

Gjoa Taylor, Director, Technology at 699-7304 or

email gjoat@primewestenergy.com for assistance.

As announced in the December 2001

issue of The Negotiator, Leo Boisvert

retired from Alberta Energy January 4,

2002. Mr. Boisvert was best known to

most of us as Manager of Continuations,

where he spent the majority of his 36-

year career with Alberta Energy. Leo

was honoured by the CAPL at the

December 2001 General Meeting at the

Hyatt. Here, he was presented with a

plaque on behalf of Dave Bernatchez

and the Education Committee, acknowledging Leo's efforts in teaching

land tenure courses to CAPL members. In addition, Colin McKinnon

presented Leo with a limited edition chuckwagon print as a token of

appreciation for Leo's contribution to the land profession.

Leo Boisvert’s Retirement

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Online Roster Access

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EnergyUpdate

Using QByte’s industry-leading information systems for upstream andmidstream operations just got easier.Now, through QByte Online, your staffcan use our systems over the Internet orvia a MAN “Metropolitan Area Network”.We provide the software, hardware andsystems management services centrally.And, we do all this for a predictable,easily understood user-based monthlysubscription fee. Let us manage yourinformation systems so you can spendmore time managing your business.

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The Information Backbone for Upstream and Midstream Operations.

Financial Management

Production Management

Land Management

Decision Support

on the MOVERoster UpdatesGregory Chury, P.LandCalpine Canada Resources Ltd.To Independent

Bill Davis, P.LandIndependentTo Sine Energy Ltd.

Neil DixonPark Lane Petroleums Ltd.To Cougar Hydrocarbons Inc.

Lynn Dyson, P.LandGascan Resources Ltd.To Advantage Energy Income Fund

Dale FoxCanadian Hunter Exploration Ltd.To Burlington Resources Canada Ltd.

Robert Jansen, P.LandIndependentTo ExxonMobil Canada Energy

Diane JaquesBarnwell of Canada, LimitedTo Independent

Jennifer KlotzArgonauts Group Ltd.To Independent

Dwaine Korsbrek, P.LandIndependentTo Alpine Energy Ltd.

Mark LackieRichland Petroleum CorporationTo Independent

Denise LeHouillierIndependentTo Cedar Energy Partnership

Jim McIndoe, P.LandIndependentTo Triloch Resources Inc.

Richard MellisMcNally Land Services Ltd.To Promax Energy Inc.

Bill NelsonIndependentTo Toro Energy Inc.

Dave Savage, P.LandIndependentTo TriQuest Energy Corp.

Andrew Weldon699561 Alberta Ltd.To Midnight Oil & Gas Ltd.

Korby ZimmermanIndependentTo Crossfield Gas Corp.

On the Move

new MEMBERSNew MembersThe following members were approved at the February 5, 2002 Executive Meeting:

Applicant Current Employer SponsorsActiveLilie Collins Canadian Natural Catherine Docherty

Resources Limited Paul LyzaniwskiJean Melnychuk

Susan Gramlich Husky Oil Operations Limited Susan FraserGrace SticklandWally Tomie

Brock Kaluznick Standard Land Company Inc. John CharukWinston GaskinHugo Potts

Murray Phillips El Paso Oil & Gas Canada, Inc. Arnold BrownleesGeoff CainTrevor Williams, P.Land

Heather Rampersaud APF Energy Inc. Tim LouieKen PrettyMichael Okrusko, P.Land

Don Ratcliff ExxonMobil Canada Energy John BooneLouis Champagne, P.LandWally Tomie

Roger Rodermond Canadian Natural Yvan ChretienResources Limited Helmet Eckert, P.Land

Lorne SchwetzEllen Smith Husky Oil Operations Limited Brian Bass

Michael PontoJim Wickens

Student MemberMichael French University of Calgary Bob Schulz

ENSURE YOUR MAPS FOR THE 2002 PROSPECTEXCHANGE ARE UP TO THE CHALLENGE.

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1100, 144 � 4th Ave. S.W.

Calgary, AB T2P 3N4

are you ready to joust?

Alberta landsale update

JANUARY JANUARY 2002 > $1000.00/ha

BONUSES

JANUARY 2001 > $1000.00/ha

TOTAL # OF HECTARES SOLD IN JANUARY

GRAND TOTAL

AREA 2001 2002

263,675

PLAINS 106,626 120,745

NORTHERN 181,226 133,393

FOOTHILLS 11,136 9,536

298,989

AVERAGE $/ha

JAN '01$321.27

JAN '02$144.44

JAN '02$123.17

JAN '02$274.37

JAN '01$212.89

JAN '01$444.80

Medicine Hat

Calgary

Edmonton

Fort McMurray

High Level

11

10

20

30

102030

40

50

60

70

80

90

100

110

120

10201 11 102010

FOUR

TH M

ERID

IAN

FIFT

H M

ERID

IAN

SIXT

H M

ERID

IAN

Northern Area

Plains Area

Foothills

Area

HOT SALE AREAS

Edmonton

High Level

20

30

40

50

60

70

80

90

100

110

120

1102011020110

FOUR

TH M

ERID

IAN

FIFT

H M

ERID

IAN

SIXT

H M

ERID

IAN

Northern Area

Foothills Area

Calgary

11

10

102030

BON

USES

IN M

ILLIO

NS

$

2001

20020

BON

USES

IN M

ILLIO

NS

$

NORTHERN PLAINS FOOTHILLS

10

20

30

40

50

70

JAN

UARY

FEBR

UARY

MA

RCH

APR

IL

MA

Y

JUN

E

JULY

AUG

UST

SEPT

EMBE

R

OC

TOBE

R

NO

VEM

BER

DEC

EMBE

R

20

40

60

80

100

120

0

(2)

(3)

(2)

Total Average Bonuses Per Month

Total Average Bonuses Per Area (January)

Months( ) number of sales per month

• Metis parcels are not included in totals

Medicine Hat

Plains Area

Fort McMurray

140

180

200

220

240

60

(2)

(2)

(3)

(2)

(2)(2)

(1)

(2)

(3)

(2)

(1)

historic parliament hill,the rideau canal, a myriadof museums and nationalattractions … Ottawa’s rich

cultural landscape forms the perfect

setting to host our 24th Annual Conference.

During your stay in Ottawa, you will discover a

city that retains the rugged feel of its roots,

with sweeping parkways, hiking trails, a bustling

downtown core and numerous attractions.

Ever since Colonel John By began building the

ambitious Rideau Canal system between Ottawa

and Kingston in 1826, Canada’s Capital has

thrived. Today, the canal is the center piece of

the city, used by boaters in the summer and

transformed into the longest skating rink in the

world by winter.

The stately Parliament Buildings remain a

Canadian institution in history and tradition.

Close by, the Byward Market is known for its

trendy bistros, boutiques, night clubs and

outdoor farmers’ market.

With twelve national institutions alone, the

capital is a mecca for museum buffs. The spec-

tacular National Gallery of Canada is home to

the world’s largest collection of Canadian art

and host many traveling exhibits.

Just across the Ottawa River in Hull, the spec-

tacular Canadian Museum of Civilization focuses

on all things Canadian, from the cultures of our

Native people to the many immigrant groups

that have helped shape the nation.

During the Conference, you will have the

opportunity to discover the region’s natural

beauty. There are hundreds of kilometers of

designated hiking trails and bike paths within

the city and hundreds more only a 15 minute

drive away in Gatineau Park.

The distinct and sought out neighbourhoods of

the Nation’s Capital offer delegates world-class

shopping and dining within walking distance of

the Westin, our Conference hotel.

Whatever your tastes or interests, Ottawa

has something to offer. The Capital is a

bustling place, full of life and events that

will leave us wanting to stay longer.

Be sure to attend this year’s Conference and

experience the activities we have planned for

everyone! See you in Ottawa, September

15–18, 2002.

R. Kenneth Pretty

Chairman, Activities Committee

Activities Committee

Kelly Cowan Debbie DeCoste

Wayne Gray Dave Horn

Trish Hyman John Kanderka

Tim Louie Mike Ponto

Paul Smith Cam Weston

Korby Zimmerman

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ot tawa 2002�

l and without borders

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Scott Land offers its clients a network of six full-service offices. Each region ismanaged by a long-time Scott Land professional. We offer a complete line of serv-ices, including freehold lease plays and surface projects of all sizes and types,administrative support including A and D projects and land sales.

Experience the difference!

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MarchSunday Monday Tuesday Wednesday Thursday Friday Saturday

AprilSunday Monday Tuesday Wednesday Thursday Friday Saturday

Gregg Scott , President

900, 202-6th Avenue SWCalgary, Alberta T2P 2R9Telephone: 403-261-1000Fax: 403-263-5263

EdmontonTelephone: (780) 428-2212Facsimile: (780) 425-5263

ReginaTelephone: (306) 359-9000Facsimile: (306) 359-9015

LloydminsterTelephone: (780) 875-7201Facsimile: (780) 808-5263

Grande Prair ieTelephone: (780) 513-8540Facsimile: (780) 513-8541

Brandon Telephone: (204) 727-1511Facsimile: (204) 728-1622

A Network of Services

1 2 3 4 5 6

7 8 9 10 11 12 13

CAPL Calendar of Events

1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

31

NegotiatorDeadline

NegotiatorDeadline

AlbertaLand Sale

P.Land Exam

Northern IssuesExecutiveMeeting

ROFR Issues Oil & Gas Law(postponed toMay 28 & 29)

AlbertaLand Sale

NetworkingEvening

(BrewstersEau Claire)

ADRConventionalExplorationAgreements,Junior Level

Freehold Mineral Lease

Ski Trip

SquashTournament

Topical IssuesLuncheon

Intro toSurface Rights

BC Land Sale

Ski Trip

ExecutiveMeeting

AlbertaLand Sale

Drilling &ProductionOperations

SaskatchewanLand Sale

CAPL OperatingProcedure

Merit Awards &Elections at the

Westin

CAPLSpring Ball

Good Friday

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