The Magazine of the Canadian Association of Petroleum Landmen

October 2016

THE NEGOTIATOR

First Nation Treaty Principles Can Assist Natural Resource Development

How Treaties Can Provide a First Nation Perspective

Updates To The CAPL Farmout & Royalty Procedure – Part III

Further Improvements introduced inthe 2015 CAPL Farmout & Royalty Procedure

The Continuing Twists and Turns of Wide-Area Farmouts and ROFR RightsAlim Holdings Ltd. v. Tom Howe Holdings Ltd.

and the Effects on Understanding ROFR Requirements

For information on the services McMillan’s Energy Group can provide, please visit our website or contact Michael Thackray, QC.

Your energy partnerBuilding on over 20 years of recognized oil and gas leadership and valued relationships with CAPL, McMillan continues to be your trusted and experienced energy counsel.

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Kevin Young [ph] 403-831-4908Darcy Cosgrove [ph] 403-509-6439

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2016–2017 CAPL Board of DirectorsPresident

Larry Buzan, P.LandVice-President

Paul Mandry, PSLDirector, Business DevelopmentAlberta & British Columbia

Ted Lefebvre, P.LandDirector, Business DevelopmentSaskatchewan & Alberta Oilsands

Michelle CreguerDirector, Communications

Marah GrahamDirector, Education

Bill Schlegel, P.LandDirector, Field Acquisition & Management

Rob Pettifer, P.Land, PSLDirector, Finance

Noel Millions, PSLDirector, Member Services

Ryan Stackhouse, P.LandDirector, Professionalism

Rob Pitchford, PSLDirector, Public Relations

Gary Richardson, PSLDirector, Technology

Shaun WilliamsSecretary/Director, Social

Jordan MurrayPast President

Nikki Sitch, P.Land, PSL

Readers may obtain any Director’s contact information from the CAPL office. Suite 1600, 520 – 5 Avenue S.W. Calgary, Alberta T2P 3R7 [ph] 403-237-6635 [fax] 403-263-1620www.landman.ca

Kaitlin Polowski reception@landman.caDenise Grieve dgrieve@landman.caKarin Steers ksteers@landman.ca

Also in this issue

14 To Share or Not to Share – That is the Question

15 October Meeting Guest Speaker

19 H2 M&A Report

28 Triple Round Up

29 2016 CAPL Golf Tournament

THE NEGOTIATORThe Magazine of the Canadian Association

of Petroleum Landmen THE NEGOTIATOR

Features October 2016

2 Updates to the CAPL Farmout & Royalty Procedure – Part III

Jim MacLean

7 Managing Cumulative Effects in the Oil and Gas Sector Using Area-Based Analysis

Sean Curry

10 First Nation Treaty Principles Can Assist Natural Resource Development

Steven Francis

16 The Continuing Twists and Turns of Wide-Area Farmouts and ROFR Rights

Michael A. Thackray

In Every Issue22 The Negotiator’s Message From the Board: Communications

23 Get Smart

27 Roster Updates

31 The Social Calendar

32 CAPL Calendar of Events

32 October Meeting

32 November Meeting

Treaty 8

Treaty 6

Treaty 7

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THE PARALLEL UPDATES TO THE 2007 CAPL OPERATING PROCEDURE, THE 1997 CAPL FARMOUT & ROYALTY PROCEDURE AND THE 1997 CAPL OVERRIDING ROYALTY PROCEDURE were

endorsed by CAPL in late 4Q2015. The documents

were finalized after three industry drafts and

various additional iterations with the comment-

ing parties to optimize the handling of their

comments, to obtain their insights on other

changes and to confirm alignment.

The CAPL website includes various materials

relating to the 2015 CAPL Farmout & Royalty

Procedure (“FO&RP”) and the largely parallel

Updates to the CAPL Farmout & Royalty ProcedurePart III

WRITTEN BY

JIM MACLEAN

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2015 CAPL Overriding Royalty Procedure that are designed to

facilitate a transition to use of the new documents. These mate-

rials include: (i) an overview of the project scope and the major

changes in a user friendly format; (ii) a detailed 38 page table

that outlines in summary form all material changes relative to

the 1997 CAPL Farmout & Royalty Procedure and the rationale for

those changes; (iii) a clean copy of the text and annotations for

each of the documents; (iv) a Word version of a sample election

sheet for each of the documents; (v) a redlined copy of the text

and annotations relative to the June, 2015 drafts; (vi) a matrix

showing industry comments on the June, 2015 draft of the FO&RP

and our responses; and (vii) copies of letters of support for the

project from CAPLA, CAPPA, EPAC, PASC and the PJVA.

This is the sixth of a series of articles to outline the more

significant changes in the updated documents, and is the third

of the series on the 2015 updates to the 1997 CAPL Farmout &

Royalty Procedure. This article provides a continued overview of

the most critical changes, or what I refer to as “the magnets to

use” with respect to the 2015 document. It reviews the handling

of deductions against an Overriding Royalty (“ORR”), with a focus

on the modifications in the 2015 document.

Royalty Payor’s Allowed DeductionsContext

The key provision of the FO&RP that addresses the handling of

deductions is Clause 5.05, which was significantly modified in

the 2015 document. This article will highlight those modifica-

tions, while providing an overall context on the manner in which

the FO&RP addresses deductions.

Subclause A applies to costs through the First Point of

Measurement in all cases. Subclauses B-E apply only insofar as the

Royalty Owner does not take the ORR in kind under Clause 5.03.

The foundation of Clause 5.05 is that the Royalty Owner’s

interest is in the Petroleum Substances within, upon or under

the Royalty Lands. The Royalty Owner also owns a share of the

Petroleum Substances as produced from a Royalty Well. Subject

to any limitations on deductions under Subclause 5.05C, the

Royalty Owner bears its share of expenses incurred beyond at

least the First Point of Measurement to make the Petroleum

Substances merchantable and to transport them to market

as a result, unless the “no deductions” Alternate 5.01A(b)(2) is

selected for gas and associated substances.

There are two other reasons why the Royalty Owner is respon-

sible for its share of those product enhancement expenses.

The first is that it is inconsistent to require the Royalty Owner

to share in those expenses when it takes in kind, but not when

it takes its share of cash proceeds. The second is that product

enhancement expenses, such as processing and transportation,

add value to the product that is shared by the Royalty Owner.

If the production were sold at the wellhead (or in an unprocessed

state), the price received by the Royalty Payor (and the resultant

proceeds received by the Royalty Owner) would be lower.

Subclause 5.05A

This Subclause addresses the expenses to remove basic sedi-

ment, water and other impurities up to the First Point of

Measurement, and includes two Alternates as of the 2015

document. The Alternate selected under this Subclause also

impacts the responsibility for expenses through the First Point

of Measurement, including those described in Paragraph 5.04C(d)

if the Royalty Owner takes its ORR volumes in kind at the First

Point of Measurement.

Alternate 1 reflects the traditional treatment of expenses

incurred through the First Point of Measurement in farmout

agreements (including the 1997 document). Those expenses have

typically been minor, and there could be a significant adminis-

trative burden to change a well-established industry practice for

projects for which that is expected to be the case.

As contemplated by the annotations to the 1997 document,

the initial expenses to remove sediment, water and other impu-

rities through the First Point of Measurement can sometimes be

significant. Parties sometimes negotiated modifications to that

document in those cases.

Alternate 2 was introduced in the 2015 document for those

cases, so that the Royalty Owner can be responsible for its share

of those expenses from the wellhead, subject to the qualification

in Paragraph 2(c) for the handling of water associated with frac-

ing programs. Other than as provided in that Paragraph, Alternate

2 provides a similar outcome to the handling prescribed by

Paragraph 4.01(a) of the CAPL Royalty Procedure, Version 1 (early

1990s) for all ORRs. The logic for Alternate 2 is that a Royalty

Owner would receive a large benefit if it were not responsible for

its volumetric share of significant production handling expenses

prior to the First Point of Measurement.

Paragraph 2(c) is a very important qualification to the

handling otherwise prescribed if Alternate 2 has been selected.

As is the case with many other provisions of the 2015 docu-

ment, this Paragraph reflects the learnings from industry’s

experiences with Horizontal Wells and resource projects. It has

been included to differentiate the handling for water associ-

ated with a fracing program and water produced during normal

producing operations.

Even if Alternate 2 were chosen, this Paragraph ensures that

the Royalty Owner is not responsible for any water handling

expenses relating to a fracing program before, during and imme-

diately after that program. This is because those expenses are

more properly categorized as Completion Costs, not production

handling expenses. The water associated with a fracing program

will typically be substantially recovered during a “cleanup”

period in which specialized equipment will be on site to manage

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the higher than normal water volumes. Not surprisingly, this

Paragraph has its greatest impact for shale projects.

Subclause 5.05B

This Subclause applies to the expenses of handling ORR produc-

tion volumes after the First Point of Measurement, assuming that

the “no deductions” Alternate 5.01A(b)(2) does not apply to gas

and associated substances.

Paragraph 5.05B(a) is different from traditional industry

agreements, in that Facility Fees are also applied against crude

oil and liquids extracted at the wellhead. This recognizes the

fact that the Farmee’s facilities may be required to prepare these

substances for market, as is often the case with medium or

heavy crude. The application of the Facilities Fees definition also

provides protection against the expenses potentially associated

with a non-arm’s length use of facilities for oil.

Subparagraph B(b)(iii) is new in the 2015 document. It provides

an enhanced authority to make deductions with respect to some

of the more complex product handling arrangements associ-

ated with shale projects, such as the use of “stabilizers” and any

secondary removal of water.

Subclause 5.05C

The foundation of Clause 5.05 is the general principle that a

Royalty Owner not taking in kind should bear its volumetric

share of production handling expenses incurred after the First

Point of Measurement. However, the potential deductions often

associated with gas and the use of the Royalty Payor’s owned

facilities can be high, so this Subclause is included to qualify

the blanket authority to take deductions under Subclauses 5.05A

(if Alternate 5.05A(2) applies) and 5.05B.

It has been common since the mid-1980s for Royalty Owners

to include controls to manage those deductions. Subclause

C includes three Alternates that can be used singularly or in

combination.

There are four key contextual points of which users must

be aware with respect to these Alternates. The first is that

these Alternates limit the availability to take actual deduc-

tions otherwise permitted under Alternate 5.05A(2) and

Subclause B-no Alternate allows the Royalty Payor to take

deductions for expenses that were not actually incurred. The

second is that the selection of “none of 1, 2 or 3” does not mean

that no deductions are permitted-instead it means that there

are no limits on the deductions permitted under Subclause B.

The third is that the interrelationship of the selected Alternates

is that the lowest authorized deduction applies if more than

one Alternate is chosen-the same outcome that applied under

the 1997 document. The fourth is that the deduction regimes

applicable to Title Documents that are freehold leases and

this Agreement will probably be inconsistent. There is no

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ability to apply a “one size fits all” approach to deductions

that would see non-compliance with the requirements under

a freehold lease.

Alternate 1 has been traditionally used, either alone or in

conjunction with Alternate 2. It links deductions to the authority

prescribed under the Regulations in calculating Crown royalties

in the applicable jurisdiction. However, it posed problems for gas

in Alberta between January, 1994 and 2009 because of the Alberta

Royalty Simplification Program. That program had seen allowable

expenses allocated to each owner’s capital pool, making them

difficult to track at a facility level. The 2009 Alberta changes see

costs aligned at an AER facility level.

The negotiated cap on deductions in Alternate 2 has been

widely used by Farmors since the late 1980s to manage the ORR

revenue stream on gas and associated substances. This is partic-

ularly the case if the Royalty Payor is anticipated to use facilities

owned by it. Users must recall, however, that the cap on deduc-

tions applies after the Market Price has been adjusted to reflect

transportation tolls after the plant and any enrichment expenses

contemplated under Subclause 5.05D.

Parties have often structured Alternate 2 so that the “deduc-

tions must not be greater than 50% of the Market Price”.

Increasing the percentage to 60% benefits the Farmee/Royalty

Payor. Lowering it to 40% benefits the Farmor/Royalty Owner.

The traditional 50% cap may be excessive in a high price envi-

ronment unless high handling expenses are expected (e.g., sour

gas using third party facilities). On the other hand, a Farmee will

probably struggle with a low cap if it will be using a third party

facility that has high fees.

Alternate 3 was introduced in the 2015 document. It reflects

the fact that periods of favourable gas pricing had seen the

percentage cap of Facility Fees to Market Price offer a greater

than expected latitude in charging Facility Fees for owned facili-

ties against ORR revenues, including a higher recognized gas cost

allowance under Alternate 1. Alternate 3 includes an absolute

financial cap for those deductions, notwithstanding that the

proposed deductions may still be within the range of the cap

permitted under Alternate 2.

It is easy to perceive Subclause 5.05C as benefiting only the

Royalty Owner because of the controls it introduces on deduc-

tions. A Farmee that owns the facilities that are anticipated

to be used to handle production volumes from an attractive

prospect can use this provision to its advantage in negotiations,

though. That Farmee can use the options in the Subclause to

differentiate itself from its competition by offering controls on

deductions against the ORR that are very attractive to a poten-

tial Farmor.

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Subclause 5.05D

Production sometimes must be enriched with other hydrocarbon

products to make the product suitable for transportation or to

make the product marketable. This is particularly the case for

heavy oil and bitumen. This Subclause was introduced in the

1997 document, and is structured to ensure that the Royalty

Payor is kept whole when it is required to incur this type of

expense. Agreements had typically been silent on this issue prior

to the 1997 document.

The structure of this Clause and the handling of deduc-

tions (and the associated controls on deductions) are designed

to ensure that the value of the ORR stream is normalized to

the real value of the produced resource before making the

Subclause 5.05C calculations. This sees the Royalty Payor net out

enrichment expenses incurred by it to facilitate marketing of

production volumes.

Any other outcome would see the Royalty Owner receiving

the benefit of the enrichment expenses by being paid its ORR

on the higher value production stream without incurring any

responsibility for its associated enrichment by the Royalty Payor.

“No Deductions ORRs”Farmors will typically be very concerned about the potential

for a Farmee to apply large deductions against the ORR for use

of the Farmee’s own gathering, transportation and processing

infrastructure, particularly when the basis for the calculation

of those deductions will typically not be transparent or readily

verifiable. Farmors have frequently chosen to structure their ORR

as a “no deductions ORR” since the early 1990s to mitigate their

risk against high deductions.

Notwithstanding the frequency with which Farmors choose

to create a “no deductions ORR”, Subclause 5.05C does not

include a fourth option of allowing no deductions from the well-

head to the ultimate point of sale.

This is ultimately because of the “no deductions” option-

ality offered by Alternate 5.01A(b)(2) as of the 1997 document.

That provision basically enables a Royalty Owner that does not

take in kind to have the Royalty Payor pay all of the production

handling expenses to make the ORR share merchantable and to

deliver it to market.

If selected, the Royalty Owner would typically “compen-

sate” the Royalty Payor for the assumption of those expenses

through a negotiated ORR lower than would be the case if the

ORR were taken in kind under Subparagraph (ii) of this Alternate.

This reflects the fact that the Royalty Owner would assume

responsibility for production handling expenses if it took it kind.

Many users do not realize that this Alternate already provides

the Farmor with the ability to obtain the same outcome as a

custom “no deductions ORR” provision, subject to three import-

ant qualifications. The first is that it ultimately only applies

to Facility Fees incurred through the outlet of a gas plant, as

transportation expenses after that point are captured as revenue

adjustments (rather than deductions) under the Market Price

definition. The second is that the calculation applies after any

adjustment for enrichment expenses incurred by the Royalty

Payor under Subclause 5.05D. The third is that the typical custom

industry provision effectively eliminates the Royalty Owner’s

right to take in kind.

The last point is critical for Royalty Owners to understand.

The motivation to take in kind would typically be very low if a

Royalty Owner would receive the same percentage of produc-

tion volumes when taking in kind and not taking in kind, while

being required to assume production handling costs after the

First Point of Measurement if it took its share of production in

kind. Similarly, the right to take in kind in this Alternate offers

additional optionality for the Royalty Owner in a high gas price

environment (i.e., the benefit of no responsibility for Facility Fees

being much more modest relative to the incremental value of

the forgone ORR volume than in a low to moderate price envi-

ronment) and greater protection (e.g., the Royalty Payor selling at

the wellhead before any meaningful product enhancement costs

were actually incurred).

The corollary of this is that a Farmor that wishes to create a

“no deductions ORR” without using the optionality already avail-

able to it in the 1997 and 2015 documents will need to modify

the definition of “Market Price” with respect to the adjustment

of price for transportation tolls to deliver product to the point

of sale. Similarly, a Farmee willing to accept a negotiated “no

deductions ORR” needs to ensure that the revenue stream is

normalized to reflect any Subclause 5.05D enrichment expenses.

Follow the MoneyOne of the ongoing challenges in land agreements has been to

address the handling of costs associated with ORR volumes in

a way that is logical and transparent to users. The 2015 CAPL

Farmout & Royalty Procedure builds on the major changes

introduced in the 1997 document to enhance significantly the

handling of deductions for ORRs associated with resource proj-

ects with outcomes that attempt to balance the objectives of

both Royalty Payors and Royalty Owners.

Next month’s article will address the drilling of an additional

well on a spacing unit then subject to a potential Article 6.00

conversion by the Royalty Owner from an ORR to a Working

Interest. m

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AS THE PROVINCIAL REGULATOR OF OIL AND GAS ACTIVITIES IN BRITISH COLUMBIA, THE B.C. OIL AND GAS COMMISSION (COMMISSION) IS RESPON-SIBLE FOR REGULATING A VARIETY OF LAND SURFACE ACTIVITIES including oil

and gas exploration and development, pipeline

construction and operation, oil and gas facilities

operation and decommissioning, and reclama-

tion of all activities.

The Commission must, among other things,

regulate in a manner that “provides for the

Managing Cumulative Effects in the Oil and Gas Sector Using Area-Based AnalysisThe B.C. Regulator’s Approach

WRITTEN BY

SEAN CURRY, RPFDIRECTOR, STEWARDSHIP BC OIL AND GAS COMMISSION

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sound development of the oil and gas sector, by fostering a

healthy environment, a sound economy and social well-being”

– essentially balancing economic benefit with public interest.

The Commission has a variety of statutory and policy tools it can

and does exercise for environmental protection and manage-

ment, including a suite of prescribed environmental objectives,

developed and patterned after those in the Forest and Range

Practices Act (FRPA). As the single-window regulator and statu-

tory decision maker for oil and gas activities and related land

management actions, the Commission is a land manager.

More than five years ago the Commission started developing

Area-Based Analysis (ABA) as an approach to integrating strategic

direction from statutes, regulations and existing land-use plans.

The analysis clarifies objectives from these different sources

and measures the current condition of broad values in relation

to desired outcomes. Finer-scale values are “nested” where they

co-occur with broad values on the landscape, share common

ecological processes and/or threats, and can be expected to

respond similarly to development pressures and management.

This approach provides a simplified and transparent frame-

work to assess and manage oil and gas development related to

environmental and cultural values. That assessment of current

conditions includes the impact of other sectors, so it also

measures cumulative impacts.

As an integrating policy, planning and operational tool, ABA

does not introduce new environmental objectives, but improves

the efficiency and effectiveness of existing objectives and helps

to identify gaps and inconsistencies, which can be addressed

through established processes.

The Province defines cumulative effects as “changes to envi-

ronmental, social and economic values caused by the combined

effect of present, past and reasonably foreseeable future actions

or events on the land base.” The Commission and Ministry

of Forests, Lands and Natural Resource Operations (FLNRO)

Northeast Region have worked closely to develop a coordinated

methodology to identify key values and to assess and manage

cumulative effects across the natural resource sector. Area-based

Analysis plays a key role with the Commission when it considers

oil and gas applications for exploratory, production and gather-

ing activity, or for land-based activity related to major projects

with environmental certificates from the B.C. Environmental

Assessment Office or the federal National Energy Board.

With the potential for activity levels in northeast B.C. to

increase, considering impacts solely by project or by industrial

sector could allow unintended impacts to accumulate over time.

Like the approach FLNRO uses, ABA is value-centric and evalu-

ates the cumulative effects using ecologically-based assessment

units (such as Watersheds or Natural Disturbance Units).

The initial values in ABA focus on the biophysical compo-

nents of the ecosystem and include riparian ecosystems, water

quantity and old forest. Additional values being developed

include high priority wildlife, water quality, ground water, air

quality, cultural heritage resources and recreation/resource

features. Area-based Analysis covers the full extent of northeast

B.C., including the unconventional shale gas plays such as the

Horn River Basin, Cordova Embayment, Montney and the Liard

(Figure 1).

So, how does ABA actually work? An assessment framework is

developed for each value (Figure 2) and is based on the underlying

principle that management response escalates as industrial build

out increases the impact to a value. A geographic information

system GIS-based tool (GIS) determines the combination of the

current condition and the impact of the proposed activity if it

was approved, and compares the result to predefined triggers

for each value. The difference between current condition and

the regulatory/policy trigger defines the envelope of acceptable

future development, but additional adjudication and/or permit-

ting conditions are implemented when current condition reaches

a lower, enhanced management trigger.

The results are incorporated as an additional factor in

the application review process. In a similar fashion to other

factors, results can be used by the proponent to modify their

application, or by Commission staff to approve the application

with ABA-specific conditions or to reject the application for

ABA-related concerns. Since January 2015, all applications in

northeast B.C. have been reviewed for ABA content, including:

Avoidance• How does the proposed activity avoid the value? Avoidance

includes location, timing windows, and specific operational

components. How will the existing disturbance be used? Why

is new disturbance required?

Figure 1: ABA use in British Columbia

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Minimization• How will the activity minimize the amount of land needed?

What practices will minimize the amount of cleared vegeta-

tion and soil disturbance?

Restoration• What on-site restoration/reclamation activities are proposed

to reduce impacts of the activity, and accelerate recovery?

Area-Based Analysis functionality was incorporated in the

Commission’s new web-based “Application Management

System”, launched July 11, 2016. It is part of the pre-submission

planning section, and industry has the ability to determine if

an application will fall into areas defined by ABA as being above

the enhanced management trigger or the regulatory policy trig-

ger. The ABA data layers are also viewable in the Application

Management System map viewer.

Area-Based Analysis is about planning oil and gas activities

in a way that minimizes the footprint and reduces restoration

and reclamation timeframes on environmental values.

The Commission is working with the best publically available

data, and is working to improve ABA by:

• Assessing the accuracy of the inventory and GIS-based

assumptions relative to field conditions for the riparian value.

• In conjunction with FLNRO, determining how succession,

restoration and forest management changes the impacts of

disturbance on values.

• Conducting a review of scientific and management litera-

ture to characterize the potential benefits of using ecological

buffers to mitigate the impacts of oil and gas development.

The long-term goal is to identify and mitigate cumulative

impacts on values to deliver better environmental outcomes.

Additional information about ABA can be found at: http://www.

bcogc.ca/public-zone/area-based-analysis-aba. m

Figure 2: ABA framework

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PRAIRIE TREATIES NEGOTIATED MORE THAN 100 YEARS AGO ARE NOT HISTORIC RELICS TO BE IGNORED NOR SHOULD THEY BE DISMISSED SUMMAR-ILY AS HAVING NO RELEVANCE TODAY. Non-Aboriginal authors like Michael Asch

(On Being Here To Stay: Treaties and Aboriginal

Rights in Canada) and Greg Poelzer & Ken

S. Coates (From Treaty Peoples To Treaty Nation: A

Road Map for All Canadians) suggest that treaties can

provide a First Nation perspective, and if respected

can help to bridge the interests of First Nations,

provincial governments, and natural resource devel-

opment proponents. Moreover, First Nation leaders

such as National Chief Perry Bellegarde and Phil

Fontaine, to name two, would also likely support

respectful treaty implementation in conjunction

with sustainable resource development.

First Nation Treaty Principles Can Assist Natural Resource Development

Treaty 8

Treaty 6

Treaty 7

WRITTEN BY

STEVEN FRANCIS

B.A., LL.B

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Speaking as a Cree First Nation person schooled in treaty and

sustainable development principles and educated in the Law, I’m

convinced that remembering and practicing these principles can

result in a win-win situation for local First Nation communities

and natural resource developers. By not having to interject itself

where workable local solutions emerge, provincial governments

are also implicitly endorsing treaty principles and permitting

them to evolve and become more generally known and accept-

able for all Canadians.

Treaty principles, such as “askiwi-pimacihowin” (making

a living off the land) and “miyo-wicehtowin” (having good

relations), and economic principles (everything has a cost and

incentives matter) can co-exist for the benefit of everyone. If First

Nations benefit from natural resource development, Canadians

benefit as well, because there will be taxes and various levies and

charges that are collected and re-circulated back into the econ-

omy. The developer profits too. If natural resource development

does not occur or is stalled for too long, all citizens of Canada

suffer. It’s just a matter of time and magnitude and reach.

Many treaty elders over the years, especially from Western

Canada, maintain that their ancestors retained the resources

beneath “the depth of a plow” for themselves and their future

generations. These resources, i.e. oil, gas, coal and other hydro-

carbons plus the natural resources placed or located on the land’s

surface, were in part meant to provide the means for ensuring an

unending “livelihood” for the First Nations. Connected to this

belief is a sharing mentality and practice common for many First

Nations. Sharing and sustainable development, and other First

Nations’ practices/principles, should be part of the conversation

during consultation and any negotiations between a First Nation

and a proponent or natural resource developer. Incorporating

“fair compensation” and “certainty”, non-First Nation impera-

tives, into the consultation process and related negotiations with

a proponent should also be addressed.

In the non-First Nation context (largely male and Caucasian)

value, price and cost are very important. Legally speaking, case

law has evolved and continues to address these concepts to help

determine “fair market value” for compensation purposes with

a view to also satisfying court judgments. Intrinsically tied to

compensation is certainty, a pseudo principle that provides one

party to a situation sufficient comfort and security to continue

developing or working at a project in the natural resource devel-

opment sector. Certainty or its reasonable facsimile or equivalent

is an issue for negotiation that need not be insurmountable for

either party. Generally speaking, certainty and fair market value

are tertiary objectives for a First Nation community that wants

to ensure resources like land, water and wildlife, are available to

its future generations.

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scottland.caCalgary Edmonton Grande Prairie Fort St. John Lloydminster Regina

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According to James S. Frideres, author of First Nations People

In Canada (2016):

First Nations people accept that energy development is

necessary if Canada is to build a national strategy for

economic development. But they demand that energy

projects be environmentally sound and sustainable, and

that these projects involve them in the short-and long-

term. At the same time, First Nations people and their

communities have constitutionally protected rights,

requiring that impacts on those rights be taken into

consideration.

In other words, many First Nations do not see a contradiction

between developing and using the natural resources to earn a

“livelihood” and benefiting from them, so long as there remain

enough natural resources for future generations. It is often a

matter of balancing immediate needs with those of the future.

Others like Ken Coates and Dwight Newman would also likely

echo the need for the reconciliation of First Nations treaty rights

with the economic interests of other Canadians.

Treaties are often viewed or characterized as land surrenders

by non-Aboriginal Canadians. According to treaty negotiators

of the Crown, First Nations were giving up their claim to their

traditional territories, including the natural resources forever, in

return for specific parcels and the ability to use their former lands

for their “usual vocations”, i.e. hunting, fishing, trapping and

harvesting, subject to respecting the Queen’s law. However, this

understanding was not entirely shared by the Indian treaty signa-

tories. For instance, my treaty elders have informed me that the

complete treaty provisions included oral promises and conversa-

tions that are not recorded in the written treaty text and that the

treaties were intended to evolve over time. Specifically, the trea-

ties were to be implemented in such a way that the Indians could

peacefully exercise their treaty rights and were to be consulted

if conditions or government action was going to jeopardize or

negatively impact their negotiated rights. Their ability to earn a

“livelihood” from their rights and to ensure the environment and

ecosystems were “sustainably” used was critically important to

the Indian treaty negotiators and to current generations.

The original Crown treaty negotiators may have thought that

their efforts were simply a step toward assimilation and integra-

tion of First Nations people into a western-style capitalist system.

However, the First Nations had a different view. They viewed trea-

ties as minimal commitments and a mechanism for providing

them the benefits of an evolving society that was just and fair.

Many First Nations view their traditional lands as sacred and

integral to their culture and identity. Often they wish to maintain

their connection to their traditional territories and resources to

honor their ancestors’ history and land usage and to preserve it for

future generations. The Tsilhqot’in Nation (2014) decision recognized

the First Nation’s desire and responsibility to protect the land for

subsequent generations’ ability to meaningfully practice and exer-

cise their rights in the future. In the absence of legislation requiring

a proponent or developer to negotiate with a First Nation where it

may adversely impact on their land use or their treaty rights, it is

wise for a developer to put their commitments in writing to show

their respect and sincerity toward the First Nation’s ability to bene-

fit now and in the future from their traditional lands.

A negotiated agreement or contract may account for reason-

able costs based on fair market value and compensation of

infringement of treaty rights and Aboriginal title or foreseeable

damage to First Nation traditional land and water interests and

the ability to exercise treaty rights, i.e. hunting, fishing, trapping

and harvesting currently and in the future. By supporting or

endorsing the First Nation treaty perspective as a basis for nego-

tiating agreements with First Nations, a proponent or developer

avoids a claim for negligence or breach of treaty. However, the

proponent must be prepared to potentially devote a negotiating

session to First Nation treaty perspectives and the related treaty

interpretation principles that have been pronounced by the

Supreme Court of Canada beginning with Nowegijick v. The Queen

(1983) through to Grassy Narrows First Nations v. Ontario (Natural

Resources) (2014).

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Elexco_Negotiator qrtrhoriz4CfinPage 1 6/24/11 7:47:54 PM

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Understanding and appreciating First Nation treaty perspec-

tives and principles is key to mutual and continued natural

resource or economic development. By approaching the First

Nation in a respectful manner, the developer or proponent

enhances their opportunity to hear a point of view that has been

for too long dismissed or ignored altogether. By entertaining

these conversations, a proponent distinguishes themselves from

their industry peers and discovers an alternate justification for

negotiating an agreement with a First Nation to ensure non-ob-

jection to the relevant proposal and its timely development.

Waiting on government policy solutions or regulatory reviews

is tenuous and risky. For instance, both the Alberta and the

federal government have made positive statements recently

about the United Nations Declaration on the Rights of Indigenous

Peoples (UNDRIP), but substantive action is not imminent and

may be even years in the making. A proponent can make

substantive, similar and meaningful commitments to First

Nations much sooner and actually see the benefits emerge and

exhibit themselves.

Intending to implement the objectives and principles of the

United Nations Declaration on the Rights of Indigenous Peoples

(UNDRIP) is not an automatic for Parliament or Canadians for

that matter. According to Carolyn Bennett, Canada’s Indigenous

Peoples and Northern Affairs Minister, UNDRIP and its objectives

would have to be implemented in accordance with the laws of

Canada. However, doing so will require multiple consultations

and a tangible path forward that likely requires some kind of

additional policy or legal instrument. So does the fan-fare of

appearing at the United Nations help efforts between industrial

or natural resource development proponents and First Nations

in the short to medium term? According to Canada’s Justice

Minister, Jody Wilson-Raybould, UNDRIP is about real deci-

sion-making and its language relating to free, prior and informed

consent (FPIC) is about ensuring that Indigenous Peoples are able

to participate in decisions that affect their lives. Arguably, this

applies to natural resource development on First Nations’ tradi-

tional territories or lands.

If the provincial and the federal government are to do

anything with respect to UNDRIP, they would in fact be trying

to promote the treaty perspective and principles that already

exist that should simply be discussed as a national conversation,

respectfully debated and finally implemented. From my point

of view, proponents are best positioned to have meaningful and

respectful treaty conversations with First Nations for themselves

and agree on a process going forward that is put in writing as an

agreement than wait for a new government initiative, especially

if it involves a public consultation component. m

Medicine Hat Calgary Edmonton Kindersley Regina Saskatoon

info@actionland.ca 1-866-528-2558 actionland.ca

Being Part of the Energy in Calgary

Welcoming Melissa Morrison, B. Sc., Environmental Manager to the Action Family.

Feel free to connect with Melissa at melissa.morrison@actionland.ca

or stop by the Calgary office

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To Share or Not to Share – That is the QuestionTHE INITIAL DRAFT OF THE PJVA-CAPL PAD SITE SHARING AGREEMENT (“PSSA”) WAS CIRCULATED TO INDUSTRY AT THE END OF APRIL, AND THE TASK FORCE IS CURRENTLY REVIEWING THE INDUSTRY COMMENTS ON THAT DRAFT.

The document was designed for the typical shared pad site.

Attributes of the typical pad site include: (i) a single Site Operator;

(ii) a single blended ownership interest based on well count; and

(iii) sharing of capacity, operating costs and any fee income from

the use of surplus capacity based on blended ownership inter-

ests. Users requiring a more complex handling would need to

modify the document to deliver their desired outcomes.

One concern that has emerged from a number of comment-

ing parties is the expectation in the PSSA that there be a single

Site Operator, notwithstanding that the mineral rights being

exploited from the wells located on the shared pad site are held

in differing interests.

The starting point in examining the concern is to consider

the circumstances in which a PSSA would be contemplated

and those in which we believe that it should not be used at all.

On reflection, we do not appear to have addressed the latter clearly.

The foundation principle of the project is that a PSSA

(or any other pad sharing arrangement) should not be used in

any scenario in which parties that have no natural business rela-

tionship try to save some front-end costs by sharing a pad site.

Those parties should probably assess how they can mitigate

their environmental footprint through an examination of syner-

gies for roads and pipelines. They should probably also consider

collaborating in ways in which their individual pad sites are close

to (or even adjacent to) each other. However, we do not believe

that they should share a single pad site because of the complex-

ities this would create for the ongoing management of the site.

To illustrate, consider the following scenarios:

1. We hold two sections of joint lands in 75-25% interests under

a single JOA and plan four wells.

2. I have a 100% section and a section in which I have a 75-25%

interest with you, where I plan to drill four wells to the

X formation (two in each interest set).

3. I have a 100% section in which I plan to drill wells to the

D formation and a section of deep rights held 25-75% with

you for which you are the operator and contemplate a tech-

nically challenging deep rights target. I propose a shared pad

site with me as operator because I have an interest in all

mineral rights being exploited, but you have concerns about

my expertise with the deep play.

4. I have a 100% section and you have a 100% section. Each of us is

drilling: (i) to a different formation; or (ii) to the same formation.

Where should we propose to enter into a PSSA?

We believe that a PSSA should only be considered in the

second scenario. The JOA can govern the pad site operations

in the first scenario. The parties should not attempt to share

a pad in the third and fourth scenarios, notwithstanding that

other synergies might be exploited for roads, pipelines, etc. in

those scenarios. The “prime contractor” requirements of the

regulations further reinforce this conclusion, as noted in the

Addendum to the annotations on the PSSA Operating Procedure.

That being said, we realize that there may be circumstances

in which things evolve in a way in which a scenario #2 PSSA

ends up with the Site Operator not being involved in a particular

well because of a non-participation election on an activity on an

existing well or a sale of an interest in selective wells.

As noted in the annotations to the PSSA, we concluded that

it was not appropriate to try to anticipate a multitude of “what

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...we really will

W E H A V E A L L T H E T O O L S Y O U ' L L N E E D F O R Y O U R P R O J E C T .

C A L L U S . . . W E ' L L G I V E Y O U T H I S O N E .

Helping You Survivethe Downturn

if” scenarios in the PSSA. It would create prescriptive outcomes

that would be 100% wrong in many scenarios. In addition, it

would require a lot of extra content that would be labour inten-

sive to create and ultimately be a barrier to the review and use

of the PSSA.

The better answer for those situations is for the parties to

address their outcomes in the context of their own particular

circumstances at the time an issue arises. For situations involv-

ing a producing well, a contract operating agreement with the

Site Operator might be sufficient to mitigate the issue.

The second draft of the PSSA will be issued in early November.

The materials distributed at that time will include copies of all of

the comments on the initial draft, together with our responses

to them. m

Jim MacLean

October Meeting Guest SpeakerErica Wiebe2016 Olympic Gold Medalist, Wrestling

ERICA GREW UP IN THE TOWN OF STITTSVILLE, ONTARIO DREAMING OF BECOMING A SOCCER SUPER-STAR. Her passion

for the sport continued on

throughout elementary and

onto high school. As a natu-

rally competitive individual,

she was involved in a variety

of the standard “Canadian”

sports until that one fateful day in Grade 9 when the sign for

Co-Ed Wrestling practice went up. The attraction to wrestling

was immediate but it took a couple of years to transition and

for the dream to evolve into the determined conquest it is today.

That dream required moving across the country as a young,

optimistic athlete and setting up base in Calgary to pursue a

degree in Kinesiology, represent the U of C Dinos, and continue

striving towards excellence as a member of Team Canada.

She is an active ambassador for Fast & Female, Right to Play

& KidSport Calgary. m

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The Continuing Twists and Turns of Wide-Area Farmouts and ROFR Rights

WRITTEN BY

MICHAEL A. THACKRAY, Q.C.

Alim Holdings Ltd. v. Tom Howe Holdings Ltd., 2016 BCCA 84 (B.C. Court of Appeal)This decision serves as a cautionary tale to both

farmors, farmees and ROFR holders when faced

with wide area farmout situations where only

some of the lands are subject to ROFR’s and those

ROFR lands not governed by a more modern form

of CAPL Operating Procedure.

But to digress early and briefly, a couple of

preliminary observations before dealing with the

specifics of this case. Stealing liberally from the

introduction to my oil and gas text (Halsbury’s

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Laws of Canada - Oil and Gas), take as a given that there is no

such thing as a separate and independent category of Canadian

“oil and gas law”. Oil and gas is a product, the laws applying

being diverse and from all number of traditional legal disciplines

(e.g., tort law, administrative law, contract law, securities law,

trust law, environmental law, commercial law, criminal law, real

property law, etc.). Accordingly our world of energy law really

borrows from many of the other legal disciplines and simply

applies and particularizes traditional legal concepts, doctrines

and theories against a particular product, being oil and gas (and

the exploration, production and sale of oil and gas). This explains

why this particular oil and gas lawyer has to hunt down and read

commercial real estate cases. This also explains why there really

is no learning curve for an oil and gas professional dealing with

Canadian energy laws. There is no curve, rather a line moving

across the horizontal axis (time) with accretive-like or almost

imperceptible movement up the vertical axis (knowledge), the oil

and gas professional having to be a generalist in the truest sense

of the word. Supplementing the above is an excellent cautionary

note from the Court in this case:

Rights of first refusal are creatures of contract (although

they can create an interest in land: see Property Law

Act, R.S.B.C. 1996, c. 377, s.9). The rights of the grantor

and the grantee are determined by the wording of the

right of first refusal. Although general statements can

be made about rights of first refusal, it is dangerous to

treat such statements as immutable propositions. While

the statements may be true with respect to most rights

of first refusal, the wording of other rights of first refusal

may make the statements inapplicable to those rights.

Each case turns on the wording of the right of first refusal,

the circumstances of the offer made to purchase the prop-

erty subject to the right of first refusal, and the exercise of

the right by its holder.

With the above caveats and cautions front of mind. Now the

very simple facts of this particular case. Vendor wishes to sell

two parcels of land to Purchaser. Third Party has a right of first

refusal on one of the two parcels. Vendor issues a ROFR notice to

the third party referencing both parcels of land and one aggre-

gate price. Third party elects to purchase both parcels of land.

Purchaser cries foul arguing that as a result of the third party

electing to purchase both parcels of land, it did not properly

exercise (or it waived) its ROFR right over the single parcel of

land to which the ROFR applied, the result being that Purchaser

had the right to purchase both parcels of land from the Vendor in

accordance with its original deal.

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In response, and in a surgical and sequential analysis of the

issues, the British Columbia Court of Appeal disagrees with the

Purchaser holding as follows.

First issue, whether the ROFR on the single parcel was trig-

gered by the package sale. Answer… yes says the Court of Appeal:

In my view, a right of first refusal will be triggered by

a package sale unless the wording of the right of first

refusal is to the effect that it will only be triggered by an

offer to purchase the property subject to the right of first

refusal and no other assets. An offer to purchase a prop-

erty subject to a right of first refusal, even if it offers to

purchase other assets as well, is nevertheless an offer to

purchase that property.

Second issue, whether a valid ROFR notice has been issued if it

extends to more than just the ROFR parcel. Answer… yes says

the Court of Appeal;

While the law is clear that the holder of the right of first

refusal is entitled to require that it be provided with a

segregated price for the property subject to the right of

first refusal, it does not follow, in my view, that the owner

has failed to give a proper notice by providing a copy of

the offer to purchase the multiple properties to the holder

of the right of first refusal.

Third issue, whether the ROFR is effectively exercised if the third

party elects to purchase both parcels. The alternative being, as

suggested by the Purchaser in plain Moose Jaw English, that “by

asking for more, you lose what you had before”. Answer says

the Court of Appeal… depends. It is deserved of a more detailed

discussion, and is the central issue in this decision.

The Court concluded that the third party only had a ROFR

right to the single parcel of land. Given that, was the exercise

by the third party as to the whole a valid exercise of its ROFR

right to purchase that single parcel? Specific to the facts, the

third party by letter to the Vendor stated, “we hereby give you

formal notice that we hereby exercise our right of first refusal

and elect to purchase the above properties” (my emphasis).

The Court concluded that by the above response the third party

was doing two things:

(a) exercising its ROFR right on the single parcel governed

by the ROFR; and

(b) accepting an offer by the Vendor to sell the second

parcel,

and as such was an effective exercise by the third party of its

ROFR right. While it did not have a legal right to purchase the

second parcel, having been on offer by the Vendor, it was open

to the third party to accept such offer. On acceptance the Vendor

became legally obligated to sell both parcels to the third party for

the same price the purchaser had offered.

Admittedly, not a probable scenario in our world of oil and

gas package sales (although it could happen) so vendor and

purchaser beware, but applying the above to wide-area farmout

situations where only some of the lands are subject to ROFR’s

and those ROFR lands not governed by a more modern form

CAPL Operating Procedure (i.e., with the 24.01(B)(d) and/or 24.02

“Earning Agreement” exemptions), it would seem to follow that

a: (a) wide-area farmout will trigger a ROFR right on a single

parcel of the farmout lands subject to a ROFR; (b) ROFR notice

offering the ROFR holder the opportunity to assume the entire

obligation of the proposed farmee under the triggering farmout

agreement constitutes a valid ROFR notice in respect of that

single parcel of farmout lands; and (c) this can be effectively

exercised by the ROFR holder by exercising its ROFR on that

single parcel and concurrently accepting the offer by the farmor

to step into the shoes of the proposed farmee as to the balance

of the farmout lands. All of this is, of course, otherwise provided

for in the 2007 and 2015 CAPL Operating Procedures but appro-

priate guidance for those dealing with situations where the ROFR

portions of the farmout lands are governed by older-form CAPL

Operating Procedures.

I will leave it for another day but as a post-script in the

context of the single-wing/busted butterfly structure, I draw your

attention to the May 25, 2016 decision of the Saskatchewan Court

of Queen’s Bench in Northrock Resources v. ExxonMobil Canada

Energy, 2016 SKQB 188. Although not without issue and certain

controversy, the decision provides manner of judicial support

offered for the long-standing “bona fide disposition to one or more

of its Affiliates” ROFR exception. m

While it did not have a legal right to purchase the second parcel, having been

on offer by the Vendor, it was open to the third party to accept such offer and

upon acceptance the Vendor became legally obligated to sell both parcels to

the third party for the same price the purchaser had offered.

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CorporateFinancial Services™

H2 M&A Report

Annual Results 2016 YTD 2015 2014 2013 2012 2011 2010Number of transactions 56 90 151 93 130 121 138Total sample dollar value C$BN $8.2 $14.7 $37.5 $10.2 $43.4 $9.5 $24.5Total Proven Reserves ($/BOE) $10.53 $15.56 $18.05 $18.31 $22.93 $25.72 $24.10Proven + Probable Reserves ($/BOE) $7.52 $9.73 $12.68 $12.76 $17.22 $18.29 $17.30Per flowing BOE Production $46,704 $48,346 $56,079 $58,769 $73,400 $65,093 $64,648WTI ($US/barrel) $40.89 $48.80 $92.99 $97.97 $94.21 $95.10 $79.53Edmonton Light (C$/barrel) $49.63 $57.19 $94.48 $93.00 $86.12 $95.28 $77.70WCS (C$/barrel) $36.06 $45.92 $78.27 $76.21 $74.36 $78.54 $68.48NYMEX ($US/MMBtu) $2.28 $2.67 $4.37 $3.75 $2.85 $4.00 $4.30AECO-C (C$/MMBtu) $1.83 $2.70 $4.37 $3.24 $2.44 $3.62 $4.02Station-2 (C$/MMBtu) $1.44 $1.96 $4.13 $3.15 $2.41 $3.36 $3.85USD FX price 1.3242 1.2769 1.1043 1.0298 0.9992 0.9887 1.0299

Quarterly Results Q3 16 (QTD) Q2 16 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15Number of transactions 12 25 19 25 18 28 19Total sample dollar value C$MM $2,331 $4,499 $1,365 $4,611 $929 $6,912 $2,244Total Proven Reserves ($/BOE) $10.81 $10.22 $11.12 $11.77 $14.46 $16.52 $19.50Proven + Probable Reserves ($/BOE) $8.47 $7.37 $7.37 $7.89 $8.99 $9.26 $14.28Per flowing BOE Production $46,688 $45,863 $48,508 $42,964 $42,013 $46,906 $61,808Light Oil Weighted transactions (> 70%, $ per BOE) 5 11 6 5 5 7 8OIL - Proven + Probable Reserves $15.66 $9.03 $9.08 $11.52 $9.67 $17.37 $15.55OIL - Per flowing BOE Production $54,984 $50,093 $46,916 $48,152 $56,098 $74,890 $75,682Gas Weighted transactions (> 70%, $ per BOE) - 5 2 2 2 7 3Gas - Proven + Probable Reserves - $3.23 $3.81 $2.35 $4.39 $5.04 $6.62Gas - Per flowing BOE Production - $21,875 $37,757 $13,601 $31,536 $31,064 $41,284

Average Prices Q3 16 (QTD) Q2 16 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15WTI ($US/barrel) $44.82 $45.70 $33.46 $42.18 $46.43 $57.94 $48.64Edmonton Light (C$/barrel) $54.83 $54.95 $40.85 $52.97 $56.22 $67.62 $51.94WCS (C$/barrel) $42.17 $41.75 $26.30 $36.85 $43.41 $56.92 $42.07NYMEX ($US/MMBtu) $2.75 $2.25 $1.99 $2.24 $2.73 $2.75 $2.81AECO-C (C$/MMBtu) $2.36 $1.48 $1.83 $2.48 $2.90 $2.66 $2.74Station-2 (C$/MMBtu) $2.11 $1.17 $1.26 $1.57 $1.82 $2.23 $2.24USD FX price 1.3022 1.2884 1.3747 1.3352 1.3092 1.2292 1.2409

Questions? Please contact:Andrew Yang @ (403) 767-4013; Ayang@atb.comThis report is provided for informational purposes only. While ATB Financial believes the information to be reliable, ATB Financial does not guarantee, or make any representation as to its accuracy or completeness. The information is not to be construed as offering investment or financial advice and ATB Financial will not be liable for any loss or damage resulting from its use.

$7.52

$9.73

$12.68$12.76

$17.22$18.29

$17.30

2016 YTD201520142013201220112010

Proven + Probable Reserves ($/BOE)

$46,704$48,346

$56,079$58,769

$73,400

$65,093$64,648

2016 YTD201520142013201220112010

Flowing BOE Production

$8.47$7.37$7.37

$7.89$8.99$9.26

$14.28

Q3 16 (QTD)Q2 16Q1 16Q4 15Q3 15Q2 15Q1 15

Proven + Probable Reserves ($/BOE)

$46,688$45,863$48,508

$42,964$42,013$46,906

$61,808

Q3 16 (QTD)Q2 16Q1 16Q4 15Q3 15Q2 15Q1 15

Flowing BOE Production

September 1, 2016CANADIAN M&A METRICS

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KEY STATISTICS SUMMARYSeptember 1, 2016

Alberta Electricity 2016 YTD 2015 2014 2013 3-Year AverageSource: AESO

Prices ($ / MWh) $16.55 $33.99 $49.18 $80.18 $54.45Source: AUC

Generation Capacity (MW) As of June 2016Coal 6,267 6,258 6,271 6,271 6,267Natural Gas 7,081 7,080 7,143 5,906 6,710Hydro 902 900 894 894 896Wind 1,491 1,459 1,434 1,088 1,327Other 521 545 409 409 454Total Capacity 16,261 16,242 16,151 14,568 15,654

% Coal 39% 39% 39% 43% 40%% Natural Gas 44% 44% 44% 41% 43%% Other 18% 18% 17% 16% 17%

Drilling Results (WCSB) Jul-16 Jul-15 Jul-14 Jul-13 3-Year AverageSource: CAODC

Drilling Rig Count 85 183 355 294 277Drilling Rig Utilization 12.7% 24.0% 44.0% 35.8% 34.6%

May-16 May-15 May-14 May-13 3-Year AverageService Rig Utilization 16.0% 24.5% 34.9% 41.6% 33.7%

Well Completions Jun-16 Jun-15 Jun-14 Jun-13 3-Year AverageOil Completions 68 214 411 274 300Natural Gas Completions 52 52 154 55 87Other Completions (Service / Dry) 22 34 55 76 55Total Completions 142 300 620 405 442

2015 2014 2013 2012 3-Year AverageTotal Well Completions - Annual 5,292 10,927 10,853 11,673 11,151Metres per well drilled 2,522 2,226 2,053 2,003 2,094

CAODC 2016 Forecast (well completions WCSB) 4,728

Commodity Prices 2016 YTD 2015 2014 2013 3-Year Average

WTI ($US/barrel) $40.89 $48.80 $98.68 $97.97 $81.82Edmonton Light (C$/bbl) $49.63 $57.19 $94.48 $93.00 $81.56WCS (C$/barrel) $36.06 $44.81 $81.03 $75.01 $66.95

NYMEX ($US/MMBtu) $2.28 $2.63 $4.28 $3.73 $3.54AECO (C$/MMBtu) $1.83 $2.70 $4.37 $3.24 $3.44Station-2 (C$/MMBtu) $1.44 $1.96 $4.13 $3.15 $3.08

Oil & Gas M&A Prices 2016 YTD 2015 2014 2013 3-Year AverageSource: ATB

2P Reserves - Light Oil Weighted ($/BOE) $9.60 $14.23 $20.68 $18.82 $17.912P Reserves - Gas Weighted ($/BOE) $3.52 $4.84 $5.62 $5.63 $5.362P Reserves - Total Sample Average ($/BOE) $7.52 $9.73 $12.68 $12.76 $11.72

Flowing Production - Light Oil Weighted ($/BOE) $50,651 $65,246 $90,891 $83,388 $79,842Flowing Production - Gas Weighted ($/BOE) $32,463 $28,159 $29,519 $23,264 $26,981Flowing Production - Total Sample Average ($/BOE) $46,704 $48,346 $56,079 $58,769 $54,398

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Alberta Land Sales 2016 YTD 2015 2014 2013 3-Year AverageSource: Alberta Energy

Conventional Bonus Paid ($MM) $85.6 $275.8 $489.4 $679.6 $481.6Conventional Price ($/HA) $151.50 $177.50 $462.34 $316.91 $318.9Oilsands Bonus Paid ($MM) $11.6 $22.9 $4.7 $28.2 $18.6Oilsands ($/HA) $279.79 $372.71 $150.25 $192.05 $238.3

Natural Gas Volumes Jul-16 Jul-15 Jul-14 Jul-13 3-Year AverageSource: EIA

U.S. Natural Gas Production (BCF/d) 70.4 67.9 60.8 61.7 63.5U.S. Natural Gas Consumption (BCF/d) 71.1 67.4 60.9 62.1 63.5U.S. Working Gas Inventory (BCF) 3,335 2,933 2,400 2,937 2,757

Oil and Liquids Volumes Jul-16 Jul-15 Jul-14 Jul-13 3-Year AverageSource: EIA

Global Production (MMbbl/d) 96.47 96.47 93.29 91.85 93.87Global Consumption (MMbbl/d) 96.01 95.24 93.54 92.41 93.73OPEC Surplus Capacity (MMbbl/d) 1.10 1.30 2.00 1.80 1.70

Economic Indicators 2016e 2015 2014 2013 3-Year AverageSource: Bank of Canada and Alberta Treasury Board & Finance

Canada Real GDP Growth % 1.3 1.1 2.5 2.2 1.9Alberta GDP (%) (1.4) (1.5) 4.4 3.9 2.3

Jul-16 Jul-15 Jul-14 Jul-13 3-Year AverageSource: Bank of Canada

BOC Overnight Interest Rate (%) 0.50 0.50 1.00 1.00 0.83Prime Rate (%) 2.70 2.70 3.00 3.00 2.90BA 30 day Rate (%) 0.82 0.67 1.20 1.16 1.01Prime - BA Spread (%) 1.88 2.03 1.80 1.84 1.89

YoY change (%) Jul-16 Jul-15 Jul-14 Jul-13 3-Year AverageCanada Total CPI 1.3 1.3 2.1 1.3 1.6Canada CORE CPI 2.1 2.4 1.7 1.4 1.8Alberta Total CPI 0.7 1.3 2.5 2.2 2.0Alberta Energy CPI (10.5) (13.3) 3.5 8.0 (0.6)

KEY STATISTICS SUMMARYSeptember 1, 2016

Suite 201, 2629 – 29th Avenue Regina, Saskatchewan S4S 2N9

Land AcquisitionsFreehold Mineral Specialists

Surface AcquisitionsPipeline Right-of-Way

Rental ReviewsDamage Settlements

Crown Sale AttendanceTitle Registration

Potash ProjectsWind Generation Projects

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The Negotiator’s Message From the Board

CommunicationsHELLO THERE! IT IS MY TURN TO SEND YOU A MESSAGE FROM THE BOARD. SINCE I DO NOT KNOW ALL OF YOU, I WILL START WITH A LITTLE INFORMATION ABOUT MYSELF.

After my initial career aspirations of becoming a bacon expert,

a professional ninja or a wizard all fell through, I decided to

become a Landman.

After a varied career spanning more than a decade, I decided

to give back to the community I admire by running for the Board.

I had the fortunate, and dubious, distinction of being voted in

by my peers and I am honoured to work on the CAPL Board of

Directors as the Director of Communications.

Despite preparing a lengthy acceptance speech (including

a perfectly timed hair toss and well-practised fist pump) and

rehearsing in front of the neighbour’s cat (an appropriate audi-

ence if you consider his attitude was equal parts disdain and

boredom), I consequently learned that Landman do not get the

opportunity to give acceptance speeches (probably for the best).

So, I will now take this opportunity to get on my soapbox.

I have supported The Negotiator in a variety of capacities

throughout my career. This offered a glimpse of the highs and

lows of our unique field and the remunerations and limitations

of the magazine and other forms of communication. It is a

sobering time to be part of this industry and also on the Board

of a voluntary committee. The prevailing theme throughout our

business is to do more with less. Way less.

The lengthy bear market for crude oil has irrevocably altered

the industry and our reality as Landmen. The Canadian oil and

gas industry’s reputation and social licence to operate have been

steadily tarnished, partially as a result of our own poor market-

ing of the positive social influences the business provides, and

further clouded by external misrepresentations.

These challenges are pervasive in the Communications

portfolio. I feel well suited for this role and its challenges for

a variety of reasons including my passion for the written word

(I consider myself captain of the grammar police. Sfter all, there

is a distinct difference between knowing your crap and knowing

you’re crap).

We need to be better champions of our country’s resources.

Despite being contrary to our modest nature as Canadians, we

should be proud of this business and the affordable energy we

can deliver to the world. There is a great opportunity to individ-

ually and collectively relay information. We can use our unique

perspective and position in the industry to help heighten public

awareness. We cannot sit idle while others control the message

and unduly influence public perception.

The CAPL Board welcomes suggestions on which committees

to liaise with; what topics to write articles on; which industry

groups to align with; or political leaders to approach. After all,

I just do not think there is enough room at Hogwarts for us all to

become wizards and I am quite high up on the waitlist.

With your continued support, the energy industry and our

association can view these challenging times as an opportunity.

We can each work harder to create a positive message with

stakeholders.

Lastly, I would like to use this message to thank every one

who volunteers in our society, particularly during tough times.

Your support is needed now more than ever. I am impressed

with the extraordinary amount of work the CAPL volunteers

undertake, for free. It can be a rewarding and sometimes over-

whelming job. I also want to thank those who actually read this

article; which is largely (and possibly exclusively) the editors

and proofreaders, who have an important and difficult job.

A heartfelt thank you also goes to Rachel Hershfield for her

lengthy and tireless effort as the designer for The Negotiator over

the past 15 years. Thank you to the CAPL office, the volunteers,

the neighbour’s cat, the editorial committee fearlessly led by

Kristin Rennie and lastly, thanks to you the reader, for continuing

to support us and for not giving me grief for using the word crap

three times in my message. Let me step off my soapbox. You can

now peruse the On the Move section at your leisure. m

Marah Graham

Director, Communications

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Get SmartThe CAPL Education Committee is pleased to present the following courses:

October 2016 CoursesRoyalty Agreements (afternoon)

October 04, 2016 1:00 p.m. to 4:30 p.m.

This half-day seminar is designed to assist in interpreting and

reviewing royalty clauses and agreements. It will examine the

critical components of a royalty agreement, and will discuss

such topics as: qualifying an overriding royalty (i.e. an interest in

land vs. an interest in the proceeds from the sale of production);

proper deductions in calculating an ORR; rights and obligations

of the royalty owner and payor; and securing payment of an ORR.

Petroleum Evaluations – Making the Right Decision

NEW COURSEOctober 04, 2016 8:30 a.m. to 12:00 p.m.

In this practical, half day hands-on seminar, the attendees will

assess the options open to a company when considering drilling

a well. Specifically, the attendees will consider the issues in drill-

ing and farming out the opportunity. The seminar will consist

of four parts: creating an economic evaluation, assessing the

opportunity and the alternatives, reviewing the evaluation, and

recommending a course of action. The attendees will present

the results of their analysis in the seminar. The attendees will

learn the inputs needed for an economic evaluation, the differ-

ence between royalty and working interests, the mechanism of a

farm-in, and how to estimate well recovery.

Fundamentals of Surface Agreements (PSL®)

October 05, 2016 8:30 a.m. to 4:30 p.m.

This course is for the purposes of having detailed discussions

about land agreements that are most commonly used during

the surface acquisition process. Types of agreements include

the Alberta Surface Lease, Alberta Right-of-Way Agreement,

Amendments, Damage Releases, and Temporary Work Space

Agreements. Other miscellaneous surface documents will be

discussed as to when, where and how they are to be used. This

course also covers the basic concepts of contract law, the Dower

Act, Surface Rights Act and Land Agent’s Licensing Act, and how

these relate to surface land acquisition.

British Columbia Surface Rights (PSL®)

October 06, 2016 8:30 a.m. to 4:30 p.m.

This course is intended for surface landmen and administra-

tors interacting in all facets of surface activities and associated

regulations in British Columbia. This seminar will cover a wide

range of issues provided under the jurisdiction of the British

Columbia Surface Rights Board and the British Columbia Oil

& Gas Commission. An overview of oil & gas activities in British

Columbia will also be presented by the operations manager of

the Canadian Association of Petroleum Producers.

Resolving Conflict Through Negotiation

October 12, 2016 8:30 a.m. to 4:30 p.m.

This seminar will instruct negotiators of any level of experience

in the skills of interest-based negotiations. Formulated on the

Harvard and Justice Institute of British Columbia Model, focus

will be on practicing select communication skills to:

• Identify the negotiation matter at issue

• Discover and understand both your own and the other party’s

underlying interests which are motivating the hardened posi-

tions taken in the negotiation; and

• 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.

British Columbia P&NG Regulations

October 18, 2016 8:30 a.m. to 4:30 p.m.

The seminar will provide an overview of the British Columbia

Petroleum and Natural Gas Act and associated regulations,

including such topics as the land tenure system and the Crown

sales process. A question and answer period will follow the

presentation.

Freehold Mineral Lease

October 18, 2016 9:00 a.m. to 4:30 p.m.

The instructor will discuss the Torrens System in Alberta (with

some reference to Saskatchewan), the concept of indefeasibil-

ity and its qualification, historical searches, registration and

caveating issues. The instructor will then review the nature

and ownership of oil and gas in place, covering such issues

as: the rule of capture and legal and regulatory entitlement

to various substances such as coal bed methane. The topics

to be covered under the Freehold Oil and Gas Lease will be:

the principle features of the lease, its standard clauses, the

formalities of completion and execution of the lease, the

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termination of the lease, and top leasing. A review of current

court and regulatory decisions regarding freehold leases will

complete the day. Throughout the seminar, the instructor will

reference the leading Canadian court cases and legislation

affecting the issues discussed.

Fundamentals of Oil and Gas Law

October 19, 2016 8:30 a.m. to 4:30 p.m.

This seminar will cover a range of legal issues, including envi-

ronmental law and regulatory matters, but will focus on the

types of contracts most often dealt with in the upstream oil and

gas industry. This is intended for junior to intermediate industry

personnel. A question and answer period will be scheduled.

Alberta P&NG Regulations

October 20, 2016 8:30 a.m. to 2:15 p.m.

This seminar is intended for land personnel who require an

understanding and working knowledge of the Alberta Mines and

Minerals Act and associated regulations as it relates to P&NG

tenure. This seminar will cover the administration of continua-

tions for primary and continued leases; groupings and validation

of licenses; registration of liens and transfers, surrenders, rent-

als, offsets; the P&NG sales process and trespass.

Saskatchewan P&NG Regulations NEW DATEOctober 25, 2016 8:30 a.m. to 4:00 p.m.

This seminar will provide an overview of the Saskatchewan

Petroleum and Natural Gas Regulations. Emphasis will be

placed on the land tenure system, lease continuation, posting

and bidding on Crown Land. A question and answer period will

follow the presentation.

Contract Administration: An Overview

October 25, 2016 8:30 a.m. to 4:30 p.m.

An overview of the mechanics required to compile and admin-

ister efficient land systems and controls will be presented.

The daily expectations and responsibilities of the land adminis-

trator will also be discussed. Practical examples will be provided

and a discussion of common problems will be encouraged.

Topics include: role of the land administrator, the relationship

between mineral leases and contracts, land survey systems,

wells, common agreements (JOA, Farmout, Pooling, Royalty, CAPL

1990 Operating Procedure, PASC 1996), Notice of Assignment,

terms used in the industry and check lists.

Alberta Crown Lease Continuation

October 27, 2016 8:30 a.m. to 12:00 p.m.

This seminar is intended for land personnel who are involved in

the Alberta Crown Lease process. Technical personnel will also

benefit from taking this course. An overview of the regulations

and geological case studies governing lease continuation will be

provided by instructors from the Alberta Department of Energy.

Alberta Oil Sands Tenure

October 27, 2016 1:00 p.m. to 4:30 p.m.

This seminar is intended for land personnel who require

an understanding and working knowledge of the current

oil sands tenure regulations and guidelines. The course will

focus on gaining an understanding of the current oil sands

tenure regulations and guidelines. Topics to be discussed will

include: public and private sales; rights conveyed by oil sands

agreements; types of oil sands agreements; solution gas in oil

sands; continuation of oil sands leases; minimum level of eval-

uation criteria; escalating rentals; development, research and

exploration offsetting costs; bitumen upgrading as it relates to

offsetting costs; lease designations; changing from non-produc-

ing to producing and vice versa.

November 2016 CoursesFundamentals of Mineral Land NEW COURSE

November 01, 2016 8:30 a.m. to 12:00 p.m.

The course is designed to provide course attendees, who may

have limited or basic knowledge of oil and gas, with a basic

ground-up overview of mineral land and the role of landmen in

the exploration process. This course will also include an intro-

duction to land tenure and agreements in Western Canada.

Fiduciary Duties

November 01, 2016 1:00 p.m. to 4:30 p.m.

This half day 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 fiduciary duties

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

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Contractual Issues Relating to Acquisitions and Divestments

November 02, 2016 8:30 a.m. to 12:00 p.m.

This seminar will focus on the legal aspects of the acquisition of

oil and gas reserves and facilities. Special emphasis will be on

legal issues, such as the rights to deposit, basic tax issues, the

treatment of effective date vs. closing date, conditions precedent,

consents, ROFRs, due diligence and indemnities.

Principles of Contract Drafting and Interpretation

November 02, 2016 1:00 p.m. to 4:30 p.m.

The principles of drafting and interpreting contracts that have

evolved in case law over the years will be presented. In addition

to reviewing case studies, the instructor will discuss the essen-

tial concepts in drafting and suggestions for improving essential

parts of agreements.

Evaluation of Canadian Oil and Gas Properties for Landmen

NEW COURSENovember 08 & 09, 2016 8:30 a.m. to 4:30 p.m.

The course objective is to focus on understanding the process of

evaluations and understanding the outputs so that land profes-

sionals understand what oil & gas evaluators do and what they

report. Learning objectives: At the end of the course, the attend-

ees would understand:

• Definitions of reserves and resources, and what they mean to

a firm

• The process of estimating reserves and resources – Income

method, calculations of recoverable volumes, price forecasts,

operating and capital costs, royalties

• Need for discounting

• Profitability indices

• Public reporting requirements

Geophysics for Non Geophysicists

November 10, 2016 8:30 a.m. to 4:30 p.m.

This seminar will introduce the field of geophysics as it pertains

to hydrocarbon exploration in Western Canada. The instructor

will focus on a number of personal cases to exemplify the use

of seismic data. Simple in-class exercises will show some of

the limitations of seismic data in a cost-effective exploration

program. Ownership issues and legal obligations of acquir-

ing seismic data in Canada will also be introduced. Sample

show and tell scenarios employing geophysics will demonstrate

how the information acquired in this course can benefit a

non-geophysicist.

Aboriginal Affairs

November 15, 2016 8:30 a.m. to 12:00 p.m.

This session is especially useful for those interacting with

Aboriginal governments, businesses and communities, and helps

in building positive relationships to enhance effectiveness with

Aboriginal people.

Overcoming the Five Dysfunctions of a Team NEW DATENovember 15, 2016 8:30 a.m. to 4:30 p.m.

This seminar is built on the assumption that great teams

attract great team players, and that great team players on

great teams achieve more collectively than they could on their

own. Using Patrick Lencioni’s book The Five Dysfunctions of a

Team as a template, this day long seminar teaches participants

how to strengthen their teams, improve their self-awareness

and sharpen their leadership skills. The course also includes

a number of practical exercises that can be used to overcome

hurdles that stand in the way of building an effective team.

Indian Oil & Gas Canada

November 15, 2016 1:00 p.m. to 3:00 p.m.

The session provides an overview of IOGC, the Indian Oil and

Gas Act and regulations, IOGC’s role in assisting First Nations to

develop their oil and gas, the two key approaches to negotiations

and a review of IOGC’s current sub surface and surface dispo-

sition processes, applicable federal legislation and regulatory

requirements.

Enhancing Strategic Perspective (2 Day) NEW COURSENovember 16 & 17, 2016 8:30 a.m. to 4:30 p.m.

Participants in this course will learn how to: Apply the Enhancing

Strategic Perspective model, broaden their view of the envi-

ronment and lengthen the time horizon over which they plan,

reflect on the impact of their actions and decisions, synthesize

disparate information and see the interrelationships between

issues and people, be diligent in making choices and prioritizing

time, energy and resources, apply tools and strategies to increase

strategic capability and communicate in a way that increases

others’ perceptions of their strategic capability. Some Pre-Work

is involved; please see the CAPL website for more information.

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Geology

November 16 & 17, 2016 8:30 a.m. to 4:30 p.m.

This seminar will provide an overview of geology as it applies

to petroleum exploration in Canada. Workshops and exercises

are an integral part of the seminar. The instructor will review

the geological exploration tools, models and concepts as they

apply to oil and gas exploration in Canadian sedimentary

basins. Topics will include: rocks and minerals, geological

time scale, plate tectonics and reconstruction, development of

hydrocarbon reservoirs and traps, the generation and entrap-

ment of oil and gas and the historical geology of the Western

Canadian Sedimentary Basin. The geological tools used in

exploration and formation evaluation will be utilized through-

out the seminar, including well cuttings, cores, wireline &

geophysical well logs, drill stem tests, surface & subsurface

maps and cross-sections. The integration of geological data

and geophysical, land engineering and other disciplines will

also be discussed.

ROFR Issues: An Interpretative Approach- Date Changed

November 22, 2016 8:30 a.m. to 4:30 p.m.

This seminar is intended for more senior level landmen who

are responsible for analyzing various situations in which

ROFR issues may arise and recommending or implementing

appropriate corporate responses thereto. This seminar will

be presented in two parts. The morning will be devoted to

a presentation of legal principles 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 of ROFR issues and specific fact scenar-

ios 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 the instructor prior to or at the seminar for consid-

eration and discussion.

Negotiations: The Essential Skill for Landmen

November 23, 2016 8:30 a.m. to 4:30 p.m.

If you are on the front line conducting negotiations or are

a member of the “support team”, you must understand the

negotiating process and how you can contribute. Whether this

is your first exposure to training in negotiation or even if you

have taken negotiation courses in the past, this presentation

is intended for all professionals who wish to gain a further

understanding of the process and how the process can be

managed to the mutual benefit of the negotiators. This seminar

will provide participants with an understanding of the process

of negotiating and will introduce them to the skills required

to achieve outstanding agreements. Instruction will involve

short presentations, case discussions, practice negotiations

and video clips. Participants will be fully engaged throughout

the program.

Advanced Surface Rights

November 24, 2016 8:30 a.m. to 4:30 p.m.

This seminar is directed towards members of industry with five

or more years’ experience and is intended to summarize and

describe all facets of surface rights within the oil and gas busi-

ness. Registrants should consider Introduction to Surface Rights

or at least five years of field experience as a prerequisite for

this course. It will include the following topics: history, contrast

of surface rights and mineral rights, land titles, land agents,

operators / lessees, documents, applications for right of entry,

applications for well licenses or pipeline permits and surrender

or termination of interests.

1990 CAPL Operating Procedure Boot Camp

November 29 & 30, 2016 8:30 a.m. to 4:30 p.m.

This is a challenging, interactive two day course in which partic-

ipants work through case studies on the 1990 and 2007 CAPL

Operating Procedures in small work groups for presentation

to the larger group. The case studies address subtleties of the

Operating Procedure in the context of issues that could easily

arise on files, so that attendees improve their understanding of

those topics. The course is also designed to build the capability

of attendees to assess and resolve Operating Procedure issues

more generally.

Drilling & Production Operations

November 29 & 30, 2016 8:30 a.m. to 4:30 p.m.

This seminar 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 discuss 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 equip-

ment. Production operations will cover production facilities

and equipment, methods of artificial lift and enhanced recov-

ery techniques. m

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Roster UpdatesOn the MoveTodd Andersen Independent

to CanAcre Ltd.

Michael Anderson Chinook Energy Inc.

to Independent

Thomas Crosley Lightstream Resources Ltd.

to Canadian Natural Resources Limited

Sharleen Gale Long Run Exploration Ltd.

to Independent

Daniel Halper Bruin Oil & Gas Inc.

to Independent

Thomas Hunter Mechanized Energy Resources LTD.

to Independent

Jennifer Laight Canadian Natural Resources Limited

to Independent

Barbara Lerner Strike Independent

to Seven Generations Energy Ltd.

Mandy Lunn Caltech Surveys Ltd.

to Vector Geomatics Land

Surveying (Alberta) Ltd.

Irene Mercer SanLing Energy Ltd.

to Independent

John Parry Revel Resources Corp.

to TBS Energy CORP.

Roxanne Parsons Rife Resources Ltd.

to Independent

Bradley Rudy Rudy Land

to Millennium Land Ltd.

Shane Sypher, P.Land Bonavista Energy Corporation

to Independent

Christopher Tibbles New Star Energy Ltd.

to Independent m

In MemoriamRobert GrayIt is with deepest sadness that the CAPL announces the recent

passing of Robert (Bob) Gray on August 4, 2016 at the age of 65 after

a long resolute twelve year battle with cancer. Bob was born in

Calgary and graduated from the University of Calgary with a

Bachelor of Commerce in 1978. He was a member of the CAPL

for over 35 years, having joined in 1980. Bob worked for several

companies including Hudson’s Bay Oil and Gas, Atlantic Richfield,

PetroCanada, Murphy Oil, PanCanadian, Cabre, AEC, and Resman Oil

and Gas, where he was VP of Land. He retired from Encana in 2010.

Bob undertook several roles with the CAPL over the years

including the Curling Bonspiel (1982), 1986 Conference Chair, 1994

Conference Program, P.Land Professionalism, CAPL Board Director

(1996-1998), Stampede Chuckwagon tarp and more. He was active

in sports his whole life, from swimming, curling, golf, fastball, slow-

pitch, flag football, skiing, badminton and squash to coaching his

sons in badminton, soccer and football. He later took up photogra-

phy and was passionate about shooting sports, wildlife and nature.

Bob is survived by his wife Leah and sons Wyatt and Hayden.

His dedication and inspiration enriched the lives of all of those

that had the opportunity to know him.

John BeacomIt is with deepest sadness that the CAPL announces the recent

passing of John Beacom on August 5, 2016 at the age of 90.

Jack was born in Acme, Alberta and had a career as a landman for

many years, retiring as an Executive at CanOxy.

Jack shared the joy of life and enduring love of the outdoors,

enjoying camping, cycling, or skiing together with family and

friends. Jack was a mentor, an adventurer, an entertainer, and

most of all – a really good friend.

Jack is survived by his wife Loro, sons Barry, Christopher and

Ian, stepson Greg, and stepdaughter Druh and her husband. He will

be missed by all of those that had the opportunity to know him.

Mike LoganIt is with deepest sadness that the CAPL announces the recent

passing of Mike Logan on July 21, 2016 at the age of 66. Mike was

born in Sudbury, Ontario and attended Eastern Michigan University.

Mike was a successful businessman and was a member of the

CAPL for many years. He served on the Board of Directors from

1986 to 1991 and was the Chair of the Banff Conference in 1992.

Mike was a very talented athlete, he loved skiing and golf,

but his passion was football. He played football in university and

then in the CFL, arriving in Calgary in 1970 after being traded

from the Montreal Alouettes to the Calgary Stampeders.

Mike leaves behind his beloved children, Conor and Mikaela

Logan and their mother Lorraine McVean, as well as many other

family members. Mike was a charismatic person with a larger

than life personality and will be missed by all of those that had

the opportunity to know him. m

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Triple Round Up

ON BEHALF OF THE TRIPLE ROUND UP ORGANIZING COMMITTEE I WOULD LIKE TO THANK EVERYONE FOR THEIR SUPPORT AT THIS YEAR’S EVENT. We were

all really pleased with the participation of the 750 attendees and

12 sponsors, especially in light of the challenges we all face in

industry. This event wouldn’t be a success without the contin-

ued support of our membership and sponsors, and we express

great appreciation for them again this year. Special thanks to:

Synergy Land Services Ltd.

LandSolutions

Evolve Surface Strategies Inc.

AgCon Aerial Corp.

Midwest Surveys

Taylor Land Services

Altus Geomatics

Progress Land

Compass Geomatics Ltd.

Lawson Lundell LLP

Quest Geomatics

McElhanney Survey & Mapping

We look forward to seeing you out again in 2017! m

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2016 CAPL Golf TournamentBrought to you by

THE REGISTRATION SETUP AT HERITAGE POINT GOLF CLUB WAS A LITTLE DIFFERENT THIS YEAR AS IT WELCOMED CAPL MEMBERS FOR OUR ASSO-CIATION’S ANNUAL GOLF TOURNAMENT HOSTED BY TITLE SPONSOR GEOLOGIC. But it wasn’t the

morning weather we were avoiding; the new inside setup

allowed everyone a little extra time to pick out their Adidas/

Taylormade first tee gift provided by Dentons Canada LLP.

Once registered, a breakfast sandwich from our friends at

Lexterra Land Ltd. followed by a coffee & baileys from

DLA Piper Global Law Firm got the day going; we were off

to the practise area or putting green to get warmed up.

XI Technologies provided the opportunity to win a prize on

the putting green for those who felt ready to play. And for

those who needed a few extra swings out on the course, our

traditional mulligan table was put use. This year $4,060.00 was

raised for Fort McMurray Red Cross! The morning was warm-

ing up and everyone was reconnecting with familiar faces; but

then it was time to head to our assigned Can Am Geomatics

sponsored golf carts and play some golf!

The weather was questionable but only for a hole or two;

birdies and eagles were for the taking from the soft conditions

on the golf course. 26 of 27 holes were sponsored this year so

there was plenty of fun to be had out on the course, rain or

shine. Coming off the course we were welcomed back inside

the club house to pints and appetizers while scorecards were

being submitted. Universal Surveys and Progress Land spon-

sored another fantastic dinner and Birchcliff Energy stepped

in this year to make a generous donation to provide the wine.

Once again, our draw prizes after dinner kept everyone’s atten-

tion from wondering and further networking to take place.

British Columbia207 10139 - 100 St.Fort St. John BC V1J 3Y6T: 250-261-6644F: 250-261-6915Alberta

Box 847 10912 - 100 Ave.Fairview, AB T0H 1L0T: 780-835-2682F: 780-835-2140Toll Free: 888-835-6682

Visit us online at www.roynorthern.com

Negotiator Feb 2016.indd 1 2/12/2016 2:00:54 PM

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Thank you to all of our other sponsors for the new and

continued support. This tournament would not be possible

without the contributions of all our sponsors and member-

ship attendance. A full listing of all our sponsors can be found

below.

A special thanks to the other co-chairs of the committee

Craig Stayura & Aryn Flette for the heavy lifting on organiza-

tional duties and an additional thanks to all our committee

members; everyone played an important role to bring this

tournament together: Alayne Fernquist, Cam Urquhart, Craig

Thomas, Taylor Searle, Len Moriarity, Jeff Talbot, Jeremy Galeski

and Claire Jenkins.

We have been notified from Heritage Pointe Golf Club that

the CAPL Golf Tournament passed the Flames Alumni as their

biggest & best run tournament they held all year! We hope

to see everybody again next August for the 2017 CAPL Golf

Tournament. m

Garrett Zokol

CAPL Golf Tournament Co-Chair

Title Sponsor

Tee Gift SponsorDentons Canada LLP

Baileys & Coffee SponsorDLA Piper Global Law Firm

Breakfast Sponsor Lexterra Land Ltd.

Cart SponsorCan-am Geomatics

Dinner SponsorsUniversal Surveys Group

Progress Land Services

Putting Green Sponsor XI Technologies Inc.

Wine SponsorBirchcliff Energy Ltd.

Contributors Action Land, Nuvista Energy, Prospect Land Services,

Tierra Geomatics Services Inc., Jupiter Resources Ltd,

Shell Canada, Mammoth Land, KC Resources Ltd.,

Seaton-Jordan & Associates Ltd.,

Evolve Surface Strategies Inc., Secure Energy Services

Hole Sponsors Crescent Point Energy, Compass Geomatics,

LandSolutions, Midwest Surveys,

Synergy Land, PrairieSky, Sayer Securities,

Altus Geomatics, Geologic Systems,

Lawson Lundell LLP, Pandell,

Britt Land Services, All-Can Engineering,

P2 Energy Solutions, PNG Exchange,

Caltech Surveys, Hurland Services,

McElhanney, RPS HMA, Heritage Royalty,

Scott Land & Lease, Integrity Land,

Integrated Geomatics, Canbriam Energy,

Vertex, Sinopec Daylight, Blakes,

Cassels & Graydon LLP.

12831 – 163 Street, Edmonton, Alberta T5V 1M5

WWW.PROGRESSLAND.COM

1.866.454.4717

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The Social Calendar

EVENT DATE TIME LOCATIONCOST

(INCLUDING GST)CONTACT NAME CONTACT PHONE CONTACT EMAIL

REGISTRATION DEADLINE

CAPL October General Meeting

20-Oct-16 11:30 AM The Westin CalgaryMembers: No Charge

Non-Members: $63.00 Student Members $31.50

Karin Steers Kaitlin Polowski

(403) 237-6635ksteers@landman.ca

reception@landman.ca14-Oct-16

CAPL November General Meeting

17-Nov-16

Cocktails 5:00 PM Dinner

6:00 PM

The Westin HotelMembers: No Charge

Non-Members: $94.50 Student Members: $47.25

Karin Steers Kaitlin Polowski

(403) 237-6635ksteers@landman.ca

reception@landman.ca10-Nov-16

CAPL Christmas Networking Event

15-Dec-16 5:00 PM The Fairmont PalliserMembers: No Charge

Non-Members: $84.00Student Members: $42.00

Karin Steers Kaitlin Polowski

(403) 237-6636ksteers@landman.ca

reception@landman.ca9-Dec-16

* Information and online registration:

General Meetings: http://landman.ca/events/general-meetings/

Social: http://landman.ca/events/social-events/

LAND ACQUISITIONSFIRST NATIONS CONSULTATIONPROJECT MANAGEMENTAER CROWN APPLICATIONSANNUAL COMPENSATION REVIEWSDAMAGE SETTLEMENTSPUBLIC CONSULTATIONS &NOTIFICATIONS

Since 1981 the HURLAND teamhas been providing comprehensiveservices in all aspects of SurfaceLand Acquisition, Administration,Project Management and Public

Consultation

SHERWOOD PARK1.888.321.2222

Info@hurland.cawww.hurland.com

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October MeetingOctober 20, 2016 Speakers: Pamela Feist, CPL AAPL President

Erica Weibe, 2016 Olympic Gold Medalist

Time: 11:30 a.m.

Where: The Westin Calgary

320 4 Avenue S.W.

Cost: Members: No Charge

Student Members: $31.50

Non-members: $63.00

To register, please go the event tab on the CAPL website.

Deadline for registration is noon, Friday, October 14, 2016. m

November MeetingNovember 17, 2016 Speaker: Cody Battershill, Founder Canadian Action

Cocktails: 5:00 p.m.

Dinner: 6:00 p.m.

Where: The Westin Calgary

320 4 Avenue S.W.

Cost: Members: No Charge

Student Members: $47.25

Non-members: $94.50

To register, please go the event tab on the CAPL website.

Deadline for registration is noon, Thursday, November 10, 2016. m

October 4 Tuesday Saskatchewan Crown Land Sale 4 Tuesday Board Meeting 4 Tuesday Royalty Agreements 4 Tuesday Petroleum Evaluations – Making the Right Decision 5 Wednesday Fundamentals of Surface Agreements (PSL®) 5 Wednesday British Columbia Crown Land Sale 6 Thursday British Columbia Surface Rights (PSL®) 10 Monday Thanksgiving 12 Wednesday Alberta Crown Land Sale 12 Wednesday Resolving Conflict Through Negotiation 18 Tuesday British Columbia P&NG Regulations 18 Tuesday Freehold Mineral Lease 19 Wednesday Fundamentals of Oil and Gas Law 20 Thursday General Meeting (Luncheon) 20 Thursday Alberta P&NG Regulations 25 Tuesday Saskatchewan P&NG Regulations 25 Tuesday Contract Administration: An Overview 26 Wednesday Alberta Crown Land Sale 27 Thursday Alberta Crown Lease Continuation 27 Thursday Alberta Oil Sands Tenure m

CAPL Calendar of Events November

1 Tuesday Board Meeting 1 Tuesday Fundamentals of Mineral Land 1 Tuesday Fiduciary Duties 2 Wednesday Contractual Issues Relating to Acquisitions and

Divestments 2 Wednesday Principles of Contract Drafting and Interpretation 2 Wednesday British Columbia Crown Land Sale 8-9 Tues/Wed Evaluation of Canadian Oil and Gas Properties for

Landmen 9 Wednesday Alberta Crown Land Sale 9 Wednesday Manitoba Crown Land Sale 10 Thursday Geophysics for Non Geophysicists 11 Friday Remembrance Day 15 Tuesday Aboriginal Affairs 15 Tuesday Overcoming the Five Dysfunctions of a Team 15 Tuesday Indian Oil & Gas Canada 16-17 Wed/Thurs Enhancing Strategic Perspective 16-17 Wed/Thurs Geology 17 Thursday General Meeting 22 Tuesday ROFR Issues: An Interpretative Approach 23 Wednesday Alberta Crown Land Sale 23 Wednesday Negotiations: The Essential Skill for Landmen 24 Thursday Advanced Surface Rights (PSL®) 29-30 Tues/Wed 1990 CAPL Operating Procedure Boot Camp 29-30 Tues/Wed Drilling and Production Operations m

There are a lot of bases to coverfor a successful acquisition or divestiture.

Let our team of experts bring your deal home.

Calgary I Bentley I Lloydminster I Edmonton I Grande Prairie I Lampman I Toronto I Fredericton

To learn more, call us toll free at 1.866.834.0008 or visit us at www.landsolutions.ca

LandSolutions can provide fully functional teams or individuals -offering specialized support where you need it most.

For acquisition or divestiture done right, count on the experts.

Pursuing Perfection

synergyland.ca | 1.877.961.LAND (5263)

Synergy Land is thrilled to celebrate

10 years of continuous service in the land

industry, a milestone achieved through

hard work and dedication.

And, with the support of clients, vendors,

industry members and colleagues, we have

accomplished more than we ever imagined.

Our greatest reward is the opportunity to

support your projects going forward and

to build on long-standing relationships.

So, thank you and here’s to the next 10!

THANK YOU FOR THE OPPORTUNITIES.

Synergy2016_NegotiatorAd_Oct_v4.indd 1 2016-09-13 16:52