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The Oil and Gas Act
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C.C.S.M. c. O34

The Oil and Gas Act

(Assented to July 27, 1993)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

INTERPRETATION OBJECTS AND PURPOSES APPLICATION

Definitions

1(1)        In this Act,

"Abandonment Fund Reserve Account" means the account established under subsection 172(3); (« Fonds de réserve pour l'abandon »)

"assistance" means assistance of a monetary nature and includes a reduction or exemption of royalties levied under this Act; (« aide »)

"battery" means a system or arrangement of tanks or other surface equipment that receives fluid from, or delivers fluid to, one or more wells, and includes an injection plant, a pump station and equipment or a device designed to separate the fluid into oil, gas and water and to measure the amount of oil, gas and water; (« batterie »)

"board" means the Oil and Gas Conservation Board established under subsection 24(1); (« Commission »)

"branch" means the Petroleum Branch established under section 10; (« direction »)

"commercial production" means production from a well of oil and gas of such quantity and quality as to warrant, in the opinion of the director, in commercial terms, the drilling of another well expected to produce oil and gas in the same quantity and quality; (« production commerciale »)

"complete", "completion" or "completing", in respect of a well, means activities carried on after the well is drilled, to prepare the well for the purpose for which it was drilled; (« compléter » ou « complétion »)

"condensate" means a mixture consisting mainly of pentanes and heavier hydrocarbons that is recovered or recoverable through a well from a reservoir and that might be gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated; (« condensat »)

"correlative rights" means the rights of an owner to receive the owner's share of oil and gas produced from a pool; (« droit corrélatif »)

"Crown" means Her Majesty the Queen in right of the province; (« Couronne »)

"Crown oil and gas rights" means oil and gas rights held by the Crown and includes an interest held by the Crown in oil and gas rights; (« droits gaziers et pétroliers domaniaux »)

"department" means the department of the government over which the minister presides and through which this Act is administered; (« ministère »)

"director" means the Director of Petroleum appointed under subsection 11(1) and includes an acting director appointed under subsection 11(2); (« directeur »)

"disposition" means a lease or an exploration reservation in respect of Crown oil and gas rights; (« titre d'aliénation »)

"distribution system" means a distribution system as defined in The Gas Pipe Line Act; (« réseau de distribution »)

"enhanced recovery" means increasing the recovery of oil and gas from a pool by the use of artificial means or the application of energy extrinsic to the pool, including pressuring, cycling, pressure maintenance or injection into the pool of a substance or form of energy, but not including injection into a well of a substance or form of energy for the sole purpose of

(a) aiding in the lifting of fluids in the well, or

(b) stimulating the reservoir at or near the well by mechanical, chemical, thermal or explosive means; (« récupération assistée »)

"exploration reservation" means an exploration reservation issued under Part 4; (« réserve d'exploration »)

"field" means a surface land area that is designated by the director under clause 11(4)(b) as a field, and includes part of a field; (« champ »)

"flow line" means a pipe or system of pipes used to convey oil, gas, water or other fluid between a well and a battery or between batteries, and includes any other pipe or system of pipes that the director designates as a flow line, but does not include a pipeline; (« conduite de collecte »)

"gas" means natural gas that

(a) contains methane and other paraffinic hydrocarbons, and might contain nitrogen, carbon dioxide, hydrogen sulphide, helium or minor impurities,

(b) is recovered or recoverable through a well from a reservoir,

and includes any fluid hydrocarbon, before and after processing, that is not oil or condensate; (« gaz »)

"gas plant" means a system or arrangement of pressure vessels, piping and other equipment designed to process gas from a well or battery or to recover gas products; (« usine à gaz »)

"gas product" means a constituent of gas extracted by processing and includes methane, ethane, propane, butanes, pentanes plus and sulphur; (« dérivé du gaz »)

"geophysical operation" means an operation conducted on or over land to determine geologic or other conditions in the subsurface for the purpose of locating reservoirs, and includes

(a) a seismic program,

(b) a gravity, magnetic, electrical, radioactivity or geochemical survey, and

(c) a hole that is 150 m or less in depth drilled through sedimentary rock to obtain information respecting structure, stratigraphy or lithology; (« opération géophysique »)

"helium" means helium with or without associated gases; (« hélium »)

"highway" means a provincial trunk highway, a provincial road, a highway in unorganized territory, or an industrial road as that term is defined in The Highways and Transportation Act; (« route »)

"holder" means a person or group of persons registered in the records of the registrar as the holder or holders of a disposition, but does not include a person or group of persons holding an interest in a disposition only as security for a debt; (« titulaire »)

"inspector" means the director, the registrar or a person appointed as an inspector under section 17; (« inspecteur »)

"instrument" means a document, other than a transfer, pertaining to a right under a disposition, and includes a trust, deed, debenture, charge or other document that affects an interest in a disposition; (« instrument »)

"land" includes land covered by water; (« bien-fonds »)

"lease" means, other than in Part 6, a lease issued under Part 4; (« bail »)

"lease area" means an area of land to which a lease applies; (« périmètre d'exploitation du bail »)

"maximum production rate" means the amount of oil and gas that a well is permitted to produce under this Act; (« taux de production maximal »)

"mine" means a mine as defined in The Mines and Minerals Act; (« mine »)

"mineral" means a mineral as defined in The Mines and Minerals Act; (« minéral »)

"mining" means mining as defined in The Mines and Minerals Act; (« exploiter une mine » ou « exploitation minière »)

"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)

"occupant" means, in respect of a parcel of land, a person, other than an owner of the land, who is in actual and lawful possession of the land; (« occupant »)

"oil" means crude oil and other hydrocarbons that are recovered or are recoverable in liquid form through a well from a reservoir, but does not include oil recovered or recoverable from oil shale by mining; (« pétrole »)

"oil and gas" means oil and gas, or oil or gas; (« pétrole et gaz »)

"oil and gas facility" means a battery, flow line, pipeline, drilling or service rig, vehicle, gas plant or other installation or equipment that is used to process, convey or store oil, gas, helium or water, but does not include equipment used in connection with the underground storage of gas; (« installation gazière et pétrolière »)

"oil and gas resources" includes helium and oil shale resources; (« ressources gazières et pétrolières »)

"oil and gas rights" means, in respect of a parcel of land, rights to search for and produce oil and gas found in or under the land; (« droits gaziers et pétroliers »)

"oil shale" means shale or tar sands from which oil and gas might be produced, and any other substance that is prescribed as oil shale; (« schistes bitumieux »)

"operator" means,

(a) with respect to a geophysical operation, the holder of a geophysical licence issued under this Act or a person who has control or management of the geophysical operation,

(b) with respect to a spacing unit, a person who has the right as owner to carry on operations in the spacing unit,

(c) with respect to a well, a person who holds a well licence issued under Part 8 or who has control or management of the well,

(d) with respect to an oil and gas facility, a person who holds a licence or permit under this Act in respect of the oil and gas facility or who has control or management of the facility,

(e) a contractor who contracts or engages in operations pertaining to drilling, completing, equipping, servicing, operating, producing, suspending the operation of, or abandoning a well, or

(f) a person designated by the minister as an operator of a well, battery, oil and gas facility or spacing unit for the purpose of this Act; (« exploitant »)

"owner" means a working interest owner and a royalty owner;

"performance security" means a performance deposit or levy under Part 14; (« garantie d'exécution »)

"person" includes a corporation, partnership, limited partnership or syndicate and the heirs, executors, administrators or other legal representatives of a person; (« personne »)

"pipeline" means a pipe or system of pipes, located wholly within the province, that is designed or used to convey oil and gas, refined petroleum products or other fluids produced by, or used in association with, an oil and gas facility and includes

(a) all property, real and personal, used for the purpose of, or in connection with, or incidental to, the operation of a pipeline, and

(b) tanks, surface reservoirs, pumps, racks and storage, loading and other terminal facilities and all real property necessary for the operation of a pipeline or used in connection with the operation of a pipeline,

but does not include a flow line, transmission line, distribution system or a refining, manufacturing or marketing pipeline situated wholly within the property of an industrial plant; (« pipeline »)

"pool" means a reservoir designated as a pool by the director under clause 11(4)(a), and includes part of a pool; (« gisement »)

"pooling agreement" means an agreement whereby the owners of oil and gas rights within a spacing unit agree to pool their oil and gas rights within the spacing unit for the development and operation of the spacing unit; (« accord de mise en commun »)

"pooling order" means an order of the minister under section 126 whereby separate interests in a spacing unit are pooled for the development and operation of the spacing unit; (« arrêté de mise en commun »)

"prescribed" means prescribed by regulation under this Act;

"refined petroleum products" means liquid hydrocarbons, other than oil, that are refined from oil; (« dérivés du pétrole »)

"registrar" means the Petroleum Registrar appointed under subsection 13(1) and includes an acting registrar appointed under subsection 13(2); (« registraire »)

"reservation area" means an area of land to which an exploration reservation applies; (« périmètre de la réserve »)

"reservoir" means a subsurface area that contains or might contain oil, gas or helium, or that is or might be suitable for the underground storage of hydrocarbons and excludes underground tanks; (« réservoir »)

"royalty owner" means, in respect of a parcel of land, a person who owns any oil and gas, or a share of any oil and gas, found in the parcel of land, and may include the Crown; (« titutlaire de redevance »)

"spacing unit" means the area allocated to a well for the purpose of producing oil and gas from a formation; (« surface unitaire »)

"spill" means an uncontrolled or unauthorized escape or flow of oil, gas, salt water or other potentially harmful fluid from a well, oil and gas facility or vehicle used to produce, process, store or convey oil and gas; (« déversement »)

"storage reservoir" means a reservoir that is developed and operated for the storage of hydrocarbons; (« cavité de stockage »)

"surface rights" means surface rights as defined in The Surface Rights Act; (« droits de surface »)

"survey", in respect of a reservation area or lease area, includes a re-survey; (« levés »)

"test hole" means a hole of more than 150 m in depth that is drilled through sedimentary rock to obtain information respecting structure, stratigraphy or lithology; (« trou d'essai »)

"tract" means a tract of land in a spacing unit within which an owner has the right, or an interest in the right, to drill for and produce oil and gas, but does not include a unit tract; (« parcelle »)

"transmission line" means a gas transmission line as defined in The Gas Pipe Line Act; (« ligne de transmission de gaz »)

"unit agreement" means an agreement between one or more working interest owners and one or more royalty owners to consolidate, merge, integrate or otherwise combine their rights or interests in a field or pool into a unit operation, but does not include a pooling agreement; (« accord d'union »)

"unit area" means

(a) an area comprised of two or more unit tracts in which a unit operation is carried on under a unit agreement or a unit order, or

(b) where a unit agreement or unit order applies only to certain formations under the unit tracts described in the unit agreement or unit order, the subsurface area comprised of those formations; (« secteur unitaire »)

"unit operation" means an operation in which two or more unit tracts are, in accordance with the terms of a unit agreement or unit order, consolidated, merged, integrated or otherwise combined, without regard to the boundaries of the respective unit tracts to provide for the coordinated management of oil and gas rights in the unit area for the purpose of

(a) more efficient production of oil and gas within the unit area,

(b) implementing a program for the prevention of waste, or

(c) protecting correlative rights; (« exploitation unitaire »)

"unit operator" means a person appointed under or pursuant to a unit agreement or unit order to manage a unit operation; (« exploitant unitaire »)

"unit order" means an order of the minister under section 135 that a field or pool be subject to a unit operation; (« arrêté d'union »)

"unit tract" means the part of a unit area to which a share of any production in the unit area is allocated by the terms of a unit agreement or unit order; (« parcelle unitaire »)

"waste" includes

(a) the inefficient, excessive or improper use or dissipation of reservoir energy however caused,

(b) the location, drilling or operation of a well in a manner that,

(i) having regard to sound engineering and economic principles, results or might result in a reduction in the quantity of oil and gas recoverable from a pool,

(ii) causes or might cause unnecessary or excessive loss or destruction of oil and gas after removal from a reservoir,

(c) the inefficient or improper storage of oil and gas, whether on the surface or underground,

(d) the production of oil and gas in excess of available storage or transportation capacities,

(e) the escape or flaring of gas, where in the opinion of the minister, having regard to sound engineering and economic principles, the gas could be gathered, processed if necessary, marketed or beneficially injected into a reservoir,

(f) the failure to use a suitable method of enhanced recovery in a pool, where in the opinion of the minister having regard to sound engineering and economic principles that the method would increase the quantity of oil and gas recoverable from the pool,

(g) locating and drilling a well in a place or in a manner that, in the opinion of the minister having regard to sound engineering and economic principles, is not necessary to achieve maximum recovery of the oil and gas resources from the pool, and

(h) locating and operating a well or an oil and gas facility in a manner that, in the opinion of the minister, results in an unacceptable impact on the environment or on activities carried on in the area; (« gaspillage »)

"well" means a hole in the surface of the ground

(a) that is made, by drilling or boring into the ground, for the purpose of

(i) exploring for oil, gas, oil shale, salt, potash or helium,

(ii) obtaining water for injection into a pool,

(iii) disposing of salt water and other substances produced in association with oil, gas, salt or helium,

(iv) injecting water or any other substance to enhance the recovery of oil and gas, or

(v) the development and operation of a storage reservoir, or

(b) from which oil, gas, helium or salt is, has been or could be produced,

and includes a test hole, but does not include a seismic shot hole or a borehole as that term is defined in The Mines and Minerals Act; (« puits »)

"working interest owner" means, in respect of a parcel of land, a person who has the right to drill for and produce oil and gas from the land; (« titulaire d'intérêt économique direct »)

"year" means a period of 12 consecutive months. (« année »)

Regulations included

1(2)        In this Act, a reference to "this Act" includes a regulation made under this Act.

S.M. 2000, c. 35, s. 65.

Objects and purposes of Act

2(1)        The objects and purposes of this Act are

(a) to provide for, encourage and facilitate the safe and efficient development, and the maximum economic recovery, of the oil, gas, helium and oil shale resources of the province in accordance with the principles of sustainable development;

(b) to prevent waste of oil, gas, helium and oil shale resources;

(c) to protect the correlative rights of owners;

(d) to provide for the safe and efficient construction and operation of pipelines; and

(e) to provide for the safe and efficient development and operation of storage reservoirs.

Principles of sustainable development

2(2)        For the purpose of subsection (1), the principles of sustainable development include the following:

(a) that decisions respecting the development of oil and gas resources be integrated with decisions respecting protection and management of the environment so that oil and gas industry activity is conducted with due regard for its impact on the environment, and environmental programs and initiatives are instituted with due regard for their economic impact;

(b) that government and the oil and gas industry acknowledge, in their respective policies and practices, their stewardship of the oil and gas resources of the province so that the economy is developed and the environment is preserved, for the benefit of the present generation and future generations of Manitobans;

(c) that government and industry share responsibility for sustaining a sound and healthy environment and developing a sound and healthy oil and gas industry;

(d) that hazards to the environment and impediments to the development of oil and gas resources be prevented or minimized by avoiding environmental programs and economic activities that have significant adverse environmental or economic impact;

(e) that conservation policies and practices be applied to enable the exploration for and production of oil and gas resources in the province in a manner that is wise and efficient in both environmental and economic terms;

(f) that recycling of oil field waste by-products be encouraged to enable the re-use, reduction or recovery of their by-products;

(g) that oil and gas industry activity and economic development, as well as government regulation, be conducted with a view to protecting and enhancing the ecosystems of the province;

(h) that land which, in environmental terms, is damaged or diminished by oil and gas industry activity be rehabilitated;

(i) that scientific and technological research in respect of the processes and methods of oil and gas exploration and production be continued by government and industry, with a view to improving the productivity, efficiency and competitiveness of the oil and gas industry and to preventing or reducing adverse impact on the environment; and

(j) that the ecological interdependence of the provinces and territories of Canada and of the nations of the world increasingly requires integration of the decisions of government and industry in respect of the environment and the economy.

Application of Act

3(1)        This Act applies to, or in respect of,

(a) Crown oil and gas rights and the rights to helium or oil shale owned by the Crown;

(b) the exploration for oil, gas, helium or oil shale;

(c) the drilling of wells, and the operation and abandonment of wells, oil and gas facilities and storage reservoirs; and

(d) oil and gas primary production.

"Oil and gas primary production"

3(2)        For the purpose of clause (1)(d), "oil and gas primary production" means

(a) the production of oil and gas from a reservoir; or

(b) the production of an oil or gas product before refining or manufacturing.

Crown bound

4           The Crown is bound by this Act.

PART 2

ADMINISTRATION

General authority of the minister

5           The minister may inquire, or may direct the board, the director or any other person to inquire, into a matter relating to the objects and purposes of this Act and may make such orders authorized under this Act as are necessary to carry out the objects and purposes of this Act.

Annual report

6           On completion of each fiscal year of the government, the minister shall prepare a report on the activities and accomplishments of the department under this Act during the fiscal year and shall table the report in the Legislative Assembly no later than December 15 of each year except that, where the Legislative Assembly is not then in session or a session is then adjourned, the minister shall table the report in the Legislative Assembly no later than the 15th day following the day on which the next session commences or the adjourned session resumes sitting.

Assistance agreement

7           Where the minister determines that it is in the public interest to do so, the minister may, with the approval of the Lieutenant Governor in Council, enter into an agreement under which the government agrees to provide assistance with respect to exploration for or development or recovery of oil and gas resources.

Minister may refer matter to board

8(1)        The minister may, before making a decision on a matter arising under this Act, including an application made to the minister under subsection (2), refer the matter to the board, and may include a direction that the board hold a hearing in respect of the matter within such period of time as the minister may specify.

Application to resolve matter

8(2)        Any person may make application to the minister for the resolution of a matter arising under this Act, including a matter arising under an order or decision of the minister, the director or an inspector, and the minister may by order determine the matter as the minister considers fair and just.

Content of application

8(3)        An application under subsection (2) must include

(a) the address for service for each party to the application;

(b) a statement of the matter to be resolved;

(c) a statement of the facts material to the matter to be resolved; and

(d) any other information required by the minister.

Minister may extend time

9           The minister may by order extend a time fixed or allowed for doing anything under this Act, subject to such terms and conditions as the minister considers necessary or advisable.

Petroleum Branch established

10          There is hereby established a branch of the department to be known as the "Petroleum Branch" and through which the provisions of this Act are to be administered and carried out.

Appointment of Director of Petroleum

11(1)       The Lieutenant Governor in Council shall for the purposes of this Act appoint a Director of Petroleum.

Acting director

11(2)       The minister may appoint a person as acting director to act in the absence of the director, and the person appointed has all the powers and duties of the director.

Duties of the director

11(3)       The director shall

(a) exercise general supervision of the branch, including the office of the registrar;

(b) facilitate the administration of this Act;

(c) promote the sound management of the oil and gas resources of the province;

(d) perform any function required of the director under the regulations; and

(e) do all things necessary to give best effect to the objects and purposes of this Act.

Additional powers of the director

11(4)       The director may, in addition to any power elsewhere provided to the director under this Act,

(a) designate as a pool an area that, in the opinion of the director, contains an accumulation of oil and gas that is separate from any other accumulation of oil and gas;

(b) designate as a field an area under which one or more pools are situated;

(c) exercise the powers of an inspector; and

(d) in accordance with this Act, inquire into any matter and take any step or impose any measure required to ensure that the operation of a well or oil and gas facility is in compliance with this Act.

Establishment of office of registrar

12(1)       There is hereby established an office of the branch to be known as the office of the registrar.

Filing and registering in office of registrar

12(2)       Except as otherwise expressly provided in this Act, an application, instrument or other document required or permitted to be filed or registered under this Act shall be filed or registered at the office of the registrar.

Payments made at office of registrar

12(3)       The payment of a fee, levy, rent, royalty, performance security or other amount payable under this Act must be made at the office of the registrar.

Appointment of registrar

13(1)       The minister shall appoint a Petroleum Registrar.

Acting registrar

13(2)       Where the registrar is absent because of illness, or for any other reason is unable to perform the duties of the registrar, the director may appoint a person as acting registrar and the person appointed has all the powers and the duties of the registrar.

Duties of registrar

14(1)       The registrar shall

(a) keep records of and, where applicable, register

(i) dispositions, transfers of dispositions, and orders cancelling dispositions,

(ii) instruments,

(iii) licences and permits issued or transferred under this Act,

(iv) plans respecting wells and oil and gas facilities,

(v) any document submitted to the registrar in respect of an inquiry under section 5 or 23, and

(vi) the names given to wells by the director under subsection 99(1);

(b) register any order of the minister filed under subsection 30(5);

(c) maintain maps showing the location of dispositions and wells in the province;

(d) maintain a register of unit agreements; and

(e) generally maintain the records of the branch.

Registrar may conduct audit

14(2)       The registrar may, with the written approval of the director, at any reasonable time and without a warrant, enter upon the site of a well or oil and gas facility or any business premises where the registrar has reasonable grounds to believe that business records are kept in respect of the well or facility and

(a) audit records and books of account relating to the well or facility to determine or verify information that is required to be filed or provided under this Act; and

(b) after giving a receipt for the records and books, remove them from the site or premises for the purpose of making copies.

S.M. 1996, c. 27, s. 21.

Records and documents open to public

15(1)       Subject to The Freedom of Information and Protection of Privacy Act and the provisions of this Act, a person may during normal office hours inspect a record or document referred to in subsection 14(1) and, on the request of the person and payment of any prescribed fee, the registrar shall

(a) provide a copy of the record or document, or of an extract from the record or document; and

(b) certify the copy as a true copy.

Evidence of record or document

15(2)       Where a copy of a record or document is certified by the registrar under clause (1)(b), the copy may be received by the board or a court as proof of the record or document without proof of the appointment, authority or signature of the registrar.

S.M. 1997, c. 50, s. 92.

Note of decision on record of disposition

16          Where an order or decision affecting a disposition is made under this Act, the registrar shall enter a note of the order or decision on the record of the disposition and shall include in the note the date the order or decision is made, the date the order or decision takes effect and the date of entry of the note on the record.

Appointment of inspectors

17          The minister may appoint persons, including persons who are employees of the government, as inspectors.

Powers of inspector

18(1)       An inspector may, for the purpose of determining whether an operator is in compliance with this Act,

(a) at any reasonable time, enter the site of a geophysical operation, well or oil and gas facility to conduct an inspection, make inquiries, take samples or carry out tests;

(b) at the site, inspect books, records, documents or things pertaining to a geophysical operation, well or oil and gas facility and, after giving a receipt for them, remove them from the site for the purpose of making copies;

(c) enter upon private land without being liable to trespass or subject to any charge or toll; and

(d) be accompanied and assisted by persons having special, expert or professional knowledge.

Operator and employees to assist inspector

18(2)       Where an inspector exercises a power under subsection (1), the operator and any employee or agent of the operator on the site shall

(a) give the inspector all reasonable assistance to enable the inspector to carry out his or her duties under this Act; and

(b) provide the inspector with any information the inspector requires for the enforcement of this Act.

Identification card

18(3)       The minister shall furnish each inspector with an identification card, and an inspector exercising a power of an inspector under this Act shall, on request, produce the identification card.

Definition

19(1)       In this section, "direct pecuniary interest" means an interest in a disposition or in oil and gas rights in the province by which a person derives or could derive a pecuniary benefit and includes

(a) a share, whether or not publicly traded, or other beneficial interest in a corporation, partnership or syndicate that holds oil and gas rights or a disposition; and

(b) a working interest ownership in oil and gas rights.

Disclosure and divestment of interest

19(2)       Subject to the regulations, a person appointed under this Act or an employee of the department who has duties that include the administration of this Act

(a) shall, within 30 days of commencement of the appointment or employment or of proclamation of this Act, whichever last occurs, disclose to the minister full particulars of any direct pecuniary interest held by the appointee or employee and, where so directed by the minister, shall dispose of the direct pecuniary interest; and

(b) shall not, except with the prior approval of the minister in writing, acquire a direct pecuniary interest during the term of appointment or employment.

Use or disclosure of confidential information

20          Subject to The Freedom of Information and Protection of Privacy Act and section 198, no person who, in the course of performing a duty or exercising a power under this Act, acquires information that is confidential shall

(a) disclose the information to a third party, except

(i) on the order of a judge of a court of competent jurisdiction, or

(ii) for the purpose of the administration and enforcement of this Act, or an order made, or a term or condition of a licence or permit issued, under this Act; or

(b) use the information for personal gain or for the personal gain of another person.

S.M. 1996, c. 27, s. 21; S.M. 1997, c. 50, s. 92.

Offence and penalty

21           A person who contravenes subsection 19(2) or section 20 is guilty of an offence and is liable on summary conviction to the penalty set out under Part 19.

Application for restitution

22(1)       Where a person, including the Crown, is adversely affected by a pecuniary gain obtained as a result of a contravention of subsection 19(2) or clause 20(b), the person may make application to the Court of Queen's Bench for an order of restitution against the recipient of the pecuniary gain.

Limitation period for application

22(2)       An application under subsection (1) may not be made more than six years after the discovery of the contravention.

L.G. in C. may appoint person

23          The Lieutenant Governor in Council may appoint a person to inquire into any matter to which this Act applies and a person so appointed has the protection and powers of a commissioner appointed under Part V of The Manitoba Evidence Act.

PART 3

OIL AND GAS CONSERVATION BOARD

Establishment of board

24(1)       The Lieutenant Governor in Council may establish a board to be known as the "Oil and Gas Conservation Board" which shall consist of not fewer than three members who shall be appointed by the Lieutenant Governor in Council.

Qualification of members

24(2)       The members of the board shall include not fewer than two persons who have an expert or specialized knowledge of oil and gas, and not more than one member who is an employee of the government.

Term of office

24(3)       Unless a member sooner dies, resigns or is removed from office, a member shall serve for such period as is specified in the order by which the member is appointed.

Presiding member and deputy

24(4)       The Lieutenant Governor in Council shall designate a member of the board to act as the presiding member of the board and a second member to act as the deputy presiding member of the board.

Remuneration and reimbursement

24(5)       The members of the board, other than a member employed by the government, may be paid remuneration for serving as members of the board in such amount as the Lieutenant Governor in Council may determine, and the members shall be reimbursed for out-of-pocket expenses incurred in the course of performing functions under this Act.

Quorum

24(6)       A majority of the members of the board, including the presiding member or the deputy presiding member, constitutes a quorum at a meeting of the board or at a hearing conducted by the board.

Appointment of acting member

24(7)       Where a member of the board is absent or expects to be absent, the minister may appoint a person to act in the place of the absent member during the period of absence, and the person so appointed has the powers of the member of the board in whose place the person is appointed to act.

Deputy presiding member

24(8)       Where the presiding member is absent, or on the request of the minister or presiding member, the deputy presiding member shall act as the presiding member and while so acting has the powers, authority and duties of the presiding member.

Appointment of another person in case of interest

24(9)       Where a member of the board has a direct interest or indirect interest in a matter that is before the board, the member shall not act or vote as a member of the board with respect to the matter, and the minister may in respect of the matter appoint a person to act as a member of the board in place of the member who has the interest.

Secretary, staff and other assistance

24(10)      The minister may designate an officer or employee of the department to act as secretary to the board, shall provide the board with such officers and other staff as are required to conduct the affairs of the board, and may provide the board with professional or technical assistance for temporary periods or for specific work where the board requests the assistance.

Board to submit report on referred matter

25(1)       Where a matter is referred to the board under subsection 8(1), the board shall consider the matter in accordance with this Act and submit to the minister a written report of its findings and recommendations.

Powers under The Evidence Act

25(2)       Subject to subsection (3), for the purpose of carrying out its duties under subsection (1), the board has the protection and powers of, and is subject to the requirements conferred on, or required of, commissioners appointed under Part V of The Manitoba Evidence Act.

No power to summon witnesses

25(3)       Section 88 of The Manitoba Evidence Act does not apply to the board.

Rules of practice and procedure

26(1)       Subject to this section and the regulations, the board shall make rules of practice and procedure governing the conduct of the business of the board.

Statutes and Regulations Act does not apply

26(2)       The Statutes and Regulations Act does not apply to rules of practice and procedure made under subsection (1).

Transcript of oral evidence

26(3)       The board shall arrange for the recording and transcription of oral evidence given at a hearing before the board.

Presentation of evidence

26(4)       Testimony at a hearing shall be presented orally unless a person is unable to attend the hearing for a reason acceptable to the members of the board conducting the hearing, in which case the board may receive the evidence of the person under statutory declaration.

Record of proceedings before board

26(5)       The board shall file with the registrar a record of each matter referred to it under this Act, including

(a) a copy of the document by which the matter is referred to the board;

(b) a copy of any recording or transcription made under subsection (3);

(c) a copy or photograph of any exhibit or document received by the board;

(d) a copy of any written report made for the board by an expert under section 27 or by an inspector; and

(e) a copy of each report submitted under subsection 25(1).

S.M. 2013, c. 39, Sch. A, s. 79.

Board may seek expert assistance

27          The board may, for the purpose of preparing a report under subsection 25(1), seek the assistance of an expert and may authorize the expert, for the purpose of preparing a study, report or opinion for the board, to conduct under the board's direction any inspection considered necessary or advisable by the board, and the board may give such weight to the study, report or opinion as the board considers appropriate.

Board and expert have power of inspector

28          Subject to the approval of the minister in writing, the board, for the purpose of preparing a report under subsection 25(1), and an expert authorized by the board under section 27, may exercise the powers of an inspector.

Recommendation as to costs

29          In a report made under subsection 25(1), the board may recommend to the minister that costs incurred by a party or the board in respect of the matter be awarded to the party or the board, or both, in an amount the board may specify, and paid by a party to the matter.

Notice of hearing

30(1)       The board shall, not later than 10 days after receiving a direction under subsection 8(1) to hold a hearing in respect of a matter, set a date, time and place for the hearing and shall, not less than 14 days before the scheduled date, give notice of the date, time and place to the parties to the matter, the registrar and any person whose rights or interests could, in the opinion of the board, be directly affected by a decision made in respect of the matter.

Board may proceed in absence of a party

30(2)       Where a person who is entitled to be given notice under subsection (1) is not in attendance at the commencement of the hearing and the board is satisfied that the person was given notice under subsection (1), the board may proceed to conduct the hearing in the absence of the party.

Submission of report by board

30(3)       Where a matter is considered by the board under subsection 25(1), the board shall submit its report to the minister

(a) where a hearing is conducted, not later than 60 days after completion of the hearing; or

(b) where a hearing is not conducted, not later than 60 days after the matter is referred to the board.

Minister's powers

30(4)       After consideration of the report of the board, the minister may

(a) refer the matter back to the board for reconsideration or rehearing, in whole or in part, in accordance with the directions of the minister; or

(b) by order determine the matter as he or she considers fair and just;

and the minister may by order require a party to the matter to pay the costs of another party to the matter or of the board, or both, in an amount the minister may specify.

Documents to be filed with registrar

30(5)       The minister shall, not later than 30 days after receipt of a report of the board, file with the registrar the order of the minister in respect of the matter, together with reasons for the order.

Registrar to serve copies of order

30(6)       Where an order filed under subsection (5) is in respect of a matter for which a hearing was conducted by the board, the registrar shall serve a copy of the order and reasons on each person who was given notice under subsection (1) and participated in the hearing, and to any person the board allowed to intervene at the hearing.

Minister's order as to costs filed in Q.B.

30(7)       A duplicate of an order made by the minister under subsection (4) respecting costs may be filed in the office of the Court of Queen's Bench and, upon being filed, the order as to costs becomes an order of the court and is enforceable as an order of the court.

Appeal to Queen's Bench

31(1)       An order of the minister under subsection 30(4) may be appealed to the Court of Queen's Bench on a question of law or jurisdiction.

Judge may stay enforcement

31(2)       A judge of the Court of Queen's Bench may stay proceedings on an order that is the subject of an appeal under subsection (1) pending determination of the appeal.

Minister may extend or abridge time

32          The minister may at any time extend or abridge a time set for doing anything in relation to a matter before the board.

PART 4

DISPOSITIONS

Definitions

33(1)       In this Part,

"offset area" means a spacing unit, within a reservation area or a lease area, that laterally adjoins a spacing unit that is productive and is not on a reservation area or lease area; (« zone limite »)

"productive" means, in respect of the renewal of a lease under subsection 52(3) or an election under clause 58(2)(b), that a spacing unit or quarter section that is the subject of the renewal or election produced oil and gas or had oil and gas production allocated to it under a unit agreement or unit order during the year preceding the date on which the lease might be renewed or the election made. (« productif »)

Deemed size of areas

33(2)       For the purpose of this Part, a section, quarter section and legal subdivision of land are deemed to contain 256 hectares, 64 hectares and 16 hectares, respectively.

Disposition in accordance with Act

34          A disposition may be issued only in accordance with this Act.

Issuance of disposition by minister

35          The minister may issue

(a) a disposition, on acceptance of an offer to purchase a disposition made in accordance with the regulations, to the person who makes the offer to purchase;

(b) a lease under subsection 45(1) or 46(2);

(c) an amended lease under subsection 71(1), to the holder of a lease; and

(d) with the approval of the Lieutenant Governor in Council, a disposition that the minister considers to be in the public interest.

Refusal to issue disposition

36          Without limiting the discretion of the minister under section 35, the minister may refuse to issue a disposition

(a) to a person who is in arrears in a payment, including a royalty, owing to the Crown in respect of a disposition; or

(b) to a group comprised of more than five persons.

Additional terms and conditions

37          The minister may include in a disposition, in addition to the terms and conditions applicable under this Act, such terms and conditions as the minister considers necessary or advisable.

Form and execution of disposition

38          A disposition must be in the prescribed form and executed in duplicate, in accordance with the regulations.

Registration of executed disposition

39          On receipt of an executed disposition from the minister, the registrar shall

(a) register the disposition; and

(b) endorse the duplicate copy of the disposition and send it to the holder.

Right of access to oil and gas

40          A right of access to oil and gas that is the subject of a disposition is included in the disposition, but a right of entry to land to gain access to the oil and gas must be obtained by the holder under The Surface Rights Act.

EXPLORATION RESERVATIONS

Rights granted

41          Subject to this Act, the holder of an exploration reservation has the exclusive right, in the reservation area referred to in the exploration reservation, to drill for oil and gas and to test a well to determine whether the well is capable of producing oil and gas.

Size of reservation area

42          A reservation area shall not be less than 768 hectares nor exceed 3840 hectares.

Effective date of exploration reservation

43(1)       The effective date of an exploration reservation is

(a) in the case of an exploration reservation issued under clause 35(a), the date on which the offer to purchase the exploration reservation is accepted; or

(b) in the case of an exploration reservation issued under clause 35(d), on the date of issue or on such other date as the minister may fix.

Term of exploration reservation

43(2)       Subject to subsection (3), the term of an exploration reservation is three years commencing on the effective date of the exploration reservation.

Extension of term

43(3)       Where a holder of an exploration reservation drills a well or commences the drilling of a well in the reservation area, the director may, in accordance with the regulations, extend the term of the exploration reservation for a period of one year.

Annual rent

44          The holder of an exploration reservation shall pay an annual rent in the prescribed amount on or before each anniversary of the effective date of the exploration reservation.

Conversion of exploration reservation to lease

45(1)       Where the holder of an exploration reservation who is in compliance with this Act drills at least one well to a depth adequate to test a reservoir that is or might be located under the reservation area, the holder may, in accordance with the regulations, make application to the minister for a lease of all or part of the reservation area.

Expiry of exploration reservation

45(2)       Where a lease is issued under subsection (1), the exploration reservation expires on the effective date of the lease.

Size of lease area not restricted

45(3)       Section 50 does not apply to a lease issued under subsection (1).

Offset area drilling requirements

46(1)       Section 58 applies to a reservation area, with necessary modifications.

Where offset area produces oil and gas

46(2)       Where a well is drilled in a reservation area for the purpose of subsection 58(1) and clause 58(2)(c), the holder of the exploration reservation shall, before producing oil and gas from the well, make application in accordance with the regulations for a lease of an area that includes the well.

Exploration reservation continues

46(3)       Where a lease issued pursuant to subsection (2) is not for the whole of the reservation area described in the exploration reservation, the exploration reservation continues for the balance of its term in respect of the part of the reservation area that is not included in the lease.

Prohibition

47          The holder of an exploration reservation may not

(a) transfer part of the exploration reservation other than an undivided interest;

(b) consolidate two or more exploration reservations into one exploration reservation; or

(c) divide an exploration reservation into two or more exploration reservations.

Surrender of exploration reservation

48          The holder of an exploration reservation may surrender the exploration reservation or a portion of the reservation area by giving written notice thereof to the registrar, but no rent or fee paid by the holder in respect of the exploration reservation is refundable to the holder.

LEASE

Rights granted by lease

49          Subject to this Act, the holder of a lease has the exclusive right to drill for oil and gas within the lease area and to remove and dispose of any oil and gas produced from the lease area.

Size of lease area

50          A lease area shall not exceed 768 hectares.

Effective date of lease

51(1)       The effective date of a lease is

(a) the date on which the offer to purchase the lease is accepted; or

(b) the date on which an application is made for a lease under subsection 45(1) or 46(2).

Term of lease

51(2)       Subject to section 53, the term of a lease is five years commencing on the effective date of the lease.

Application to registrar for renewal of lease

52(1)       Subject to subsection (3), the holder of a lease may, in accordance with the regulations, make application to the registrar, before expiry of the initial term or a renewal term of a lease, or of an extension of the term of a lease under section 53, for renewal of the lease.

Registrar to issue five year renewal

52(2)       Subject to subsection (3), where an applicant under subsection (1) is in compliance with this Act and the terms or conditions of the lease, the registrar shall issue a renewal of the lease for a term of five years from the day on which the initial term or renewal term of the lease would otherwise expire.

When lease may be renewed

52(3)       The holder of a lease may renew the lease in respect of

(a) any quarter section that is productive, at the end of the initial term of the lease; and

(b) any spacing unit that is productive, to the base of the deepest formation that is productive, at the end of each renewal term.

Application to director for one year extension

53(1)       Notwithstanding section 52, the holder of a lease may, in accordance with the regulations, make application to the director for a one year extension of the term of the lease.

Conditions for one year extension

53(2)       The director may issue to the holder of a lease an extension of the term of the lease for a period of one year, after the holder of the lease

(a) pays any prescribed fee, rent or other charge; and

(b) provides a written commitment, satisfactory to the director, to drill at least one well within the lease area or to further develop the lease area within the one year period.

Further extension if commitment honoured

53(3)       Where the holder of a lease has, to the satisfaction of the director, honoured a commitment given under clause (2)(b), the holder of the lease may make application under subsection (1) for a further extension of the lease.

Maximum of five extensions

53(4)       The director shall not issue more than five extensions of a lease under subsection (2).

Renewal of lease after extension period

53(5)       The holder of a lease extended under subsection (2) may make application to the registrar for renewal of the lease under subsection 52(1).

Annual rent

54          The holder of a lease shall pay an annual rent in the prescribed amount on or before each anniversary of the effective date of the lease.

Division of lease area into parts

55          On application in accordance with the regulations by a holder of a lease, the minister may divide a lease area into parts that are individually not less than one spacing unit in size, and may issue a new lease to the holder for each such part.

Surrender of lease area

56          The holder of a lease may surrender all or part of the lease area by giving written notice thereof to the registrar, but no rent, fee or other charge paid by the holder in respect of the lease is refundable to the holder.

Amendment of holder's copy of lease

57          Where part of a lease area is surrendered under section 56, the holder of the lease shall submit the duplicate copy of the lease to the registrar, who shall amend the legal description of the lease area in the lease and return the duplicate copy to the holder of the lease.

Offset area drilling requirement

58(1)       Subject to subsections (2) and (3), where oil and gas that is not owned by the Crown is being produced from a spacing unit on land adjoining an offset area, the holder of the disposition that includes the offset area shall, not later than 90 days after the director gives notice to the holder to drill a well in the offset area, comply with the notice and drill the well to a depth sufficient to test the formation from which the oil and gas is being produced.

Compensatory royalty, surrender, substitution

58(2)       The holder referred to in subsection (1) may, before the expiry of the 90 day period referred to in subsection (1), notify the director in writing that the holder elects

(a) to extend the 90 day period by paying a compensatory royalty in accordance with the regulations;

(b) to surrender the offset area to the Crown, except any formation that is productive at the time of the election; or

(c) subject to the approval of the director, to drill another well in the lease area or reservation area.

Drilling of offset well may be deferred

58(3)       The holder referred to in subsection (1) may, in accordance with the regulations, make application to the director to defer drilling a well in the offset area, and the director may grant a deferral for such period of time as the director considers necessary or advisable.

Requirement for survey

59(1)       Where the director considers it necessary or advisable to have a survey made of a reservation area or lease area to settle a dispute respecting the position of the area, or where no plan of survey exists for a reservation area or lease area or any part of it, the director shall require the applicant for, or the holder of, a disposition in respect of the area to obtain a survey of the area or any part of it, as the director may determine, in accordance with The Surveys Act.

Costs of survey

59(2)       For the purpose of subsection (1), the applicant or holder of the disposition is liable for the costs of obtaining the survey.

Implied reservations to the Crown

60          There is implied in every disposition any reservation that is required by the law of the province to be made on the disposal of oil and gas rights owned by the Crown.

Notice to holder of failure to comply

61(1)       Where the registrar has reasonable grounds to believe that a holder has failed to comply with this Act or with a term or condition of the disposition, the registrar may give the holder written notice of the failure to comply and shall indicate in the notice the remedy required, the date by which the holder must remedy the failure to comply, and the right of the minister after that date to cancel the disposition if the failure to comply is not remedied.

Cancellation of disposition

61(2)       Where a holder does not remedy a failure to comply in accordance with a notice given to the holder under subsection (1), the minister may by order cancel the disposition.

Rights forfeited to Crown

61(3)       Where a disposition is cancelled under subsection (2), the rights and interest of the holder under the disposition are forfeited to the Crown without compensation to the holder.

Cancellation on misrepresentation, bankruptcy

62          The minister may, by order and without giving prior notice to a holder of a disposition, cancel the disposition where the minister is satisfied that the holder

(a) made a material misrepresentation in the application for the disposition;

(b) through a false statement, has avoided or attempted to avoid the payment of a royalty, rent, fee or other charge payable for or under the disposition; or

(c) is insolvent or a declared bankrupt, or has committed an act of bankruptcy.

Service of notice of cancellation

63          An order made under subsection 61(2) or section 62 shall immediately be served on the registrar who shall as soon as practicable serve the holder of the disposition with a copy of the order.

Well to be abandoned

64(1)       Unless otherwise authorized by the director in writing, the holder of a disposition shall, not later than 180 days after the disposition expires or is surrendered or cancelled, abandon any well or oil and gas facility located in the reservation area or lease area, in accordance with Part 9.

Seizure for failure to comply

64(2)       Where a holder fails to comply with subsection (1), the minister may authorize the director to seize the well or oil and gas facility under section 182 without prior notice to the holder.

Waiver of term or condition by minister

65          Notwithstanding the provisions of this Act or a disposition, a waiver by the minister of a term or condition of a disposition must be in writing and any such waiver does not limit or affect the rights of the Crown in respect of any other provision of this Act or the disposition.

Disposal of Crown rights in Northern Manitoba

66          Crown oil and gas rights situated north of latitude 55 degrees north and east of meridian of longitude 96 degrees west may be reserved, leased or otherwise disposed of only in accordance with the regulations.

Agreements on helium and oil shale

67          The minister may, by an agreement entered into in accordance with the regulations, authorize exploration or drilling for, or production of, helium and oil shale in an area in which the Crown holds the rights to helium and oil shale.

PART 5

REGISTRATION OF TRANSFERS AND INSTRUMENTS

Holder may transfer disposition

68           The holder of a disposition may transfer the whole or an undivided part of the interest of the holder in the disposition.

Effect of transfer

69(1)       On the registration of a transfer under this Part, the transferee becomes the holder of the disposition or of an undivided interest in the disposition, as the case may be, for the purpose of this Act.

Effect of registration

69(2)       A transfer has no effect under this Act unless it is registered under this Part.

Effect of not registering transfer

69(3)       The failure to register a transfer under this Part does not invalidate the transfer as between the parties to it.

Registration of transfer

70(1)       Subject to the regulations, the registrar may register a transfer if

(a) the transfer document is in the prescribed form and does not conflict with the requirements of this Act or a term or condition in the disposition;

(b) registration of the transfer is requested by or on behalf of the transferor or transferee;

(c) where a corporation is a party to the transfer, the seal of the corporation is affixed to the transfer document or the transfer document is executed by a person who has authority to execute it on behalf of the corporation;

(d) where the transfer would result in the number of holders of the disposition being more than five persons, the minister in writing consents to registration of the transfer;

(e) no fee, rent or other charge in respect of the disposition is due or owing to the Crown by the holder of the disposition that is being transferred; and

(f) the transfer is accompanied by the prescribed fee.

Duplicate copy of transfer to transferee

70(2)       The registrar shall, on registering a transfer, endorse a duplicate copy of the disposition with a notation of the transfer and send the duplicate copy to the transferee as soon as practicable.

Transfer of part of a lease area

71(1)       Where the holder of a lease intends to transfer part of the lease area, the holder shall, in accordance with the regulations, make application to the minister for a new lease in respect of the part of the lease area to be transferred.

Registrar to amend lease area description

71(2)       Where the minister is satisfied that the proposed transferee is in compliance with this Act, the minister may issue a new lease to the transferee for the part of the lease area that is transferred, and the registrar shall, on registration of the new lease, amend the legal description of the original lease area to reflect the transfer of part of the lease area.

Transfer on death, bankruptcy, insolvency

72(1)       The transferee in a transfer that is not made under section 68, including a transfer resulting from the death, bankruptcy or insolvency of a holder or a person having an interest in the disposition, shall authenticate, by statutory declaration and such other document as the registrar may require, the circumstances of the transfer.

Additional documents

72(2)       The following documents must be filed with a transfer referred to in subsection (1):

(a) in the case of a transfer resulting from a bankruptcy or insolvency, proof of the right of the person to be transferee as a result of the bankruptcy or insolvency; and

(b) in the case of a transfer resulting from a testamentary instrument or intestacy, a copy of the letters probate or letters of administration.

Registrar to register transferee's name

72(3)       The registrar shall, on receipt of documents required under subsections (1) and (2), register the name of the person entitled under the transfer as the holder of the disposition or as a person having an undivided interest in the disposition.

Registration of instruments against disposition

73(1)       Subject to subsection 74(1) and the regulations, any person may submit an instrument to the registrar for registration against the disposition affected by the instrument.

Registrar to give notice to holder

73(2)       The registrar shall, on registering an instrument against a disposition, give notice of the registration to the holder of the disposition.

Effect of registration

73(3)       The registration of an instrument against a disposition under this Act constitutes notice of the instrument to any person claiming an interest in the disposition, notwithstanding any defect in the instrument.

Crown rights not affected

73(4)       The registration of an instrument against a disposition

(a) does not restrict or in any manner affect a right or power of the Crown or the minister under this Act or the disposition; and

(b) does not derogate from the proprietary rights of the Crown in the oil and gas rights that are granted by the disposition.

Security given under the Bank Act

74(1)       Where, by an instrument made under section 177 of the Bank Act (Canada), a disposition or an interest in a disposition is given as security to a bank by the holder, the bank may, in accordance with the regulations, submit an original or certified copy of the instrument to the registrar for registration.

Bank to file discharge

74(2)       Where the obligations secured by an instrument registered under subsection (1) are satisfied in whole or in part, the bank shall submit a discharge or partial discharge of the instrument to the registrar for registration.

S.M. 2002, c. 47, s. 28.

Cancellation of registration

75          The registrar shall cancel the registration of an instrument upon submission of proof acceptable to the registrar, that

(a) the obligations arising under the instrument are discharged;

(b) the holder or person who had an interest in the disposition no longer has an interest in it; or

(c) the instrument was filed in error or as the result of a misrepresentation.

PART 6

OIL AND GAS LEASE AGENTS

Definitions

76          In this Part,

"oil and gas interest" means the ownership of, or an interest in, oil and gas or a right to drill for, take, win, gain and remove oil and gas from land, whether the ownership, interest or right is acquired by lease, grant, assignment or otherwise, but does not include

(a) the ownership of, or an interest in, oil and gas that is acquired as a result of an acquisition of title to land or an interest in land where the title includes oil and gas rights in respect of the land, or

(b) an interest in Crown oil and gas rights; (« intérêt gazier et pétrolier »)

"oil and gas lease agent" means a person who negotiates, on the person's own behalf or on behalf of a third party, the acquisition of an oil and gas interest from a royalty owner or an agent of a royalty owner. (« agent d'affaires »)

Prohibition

77          No person shall carry on the business of an oil and gas lease agent unless the person is registered as an oil and gas lease agent under this Part.

Application for registration

78(1)       Subject to section 80, a person may, in accordance with the regulations, make application to the registrar for registration as an oil and gas lease agent, and the registrar shall, on payment of the prescribed fee, register the person as an oil and gas lease agent.

Registration and renewal

78(2)       Subject to section 80, the registration of an oil and gas lease agent is valid for the prescribed term and may be renewed for the prescribed term by an application made in accordance with the regulations before the registration expires, and on payment of the prescribed fee.

Validity of acquisition agreement

79(1)       Subject to subsection (2), an agreement to acquire an oil and gas interest is not valid or binding for the purpose of section 91 unless it is acquired through an oil and gas lease agent registered under this Part.

Validation by order of the minister

79(2)       The minister may, with the written consent of the parties to an agreement that does not comply with subsection (1), by order validate the agreement for the purpose of section 91.

Inquiry into misrepresentation by agent

80          Where a person alleges that an oil and gas interest was acquired as a result of a misrepresentation by an oil and gas lease agent, the minister may refer the matter to the board under subsection 8(1) and, where the minister determines that a misrepresentation occurred, the minister may by order suspend or revoke the registration of the oil and gas lease agent and the right of the oil and gas lease agent to renew his or her registration or to make application for registration under this Part.

Minister may declare agreement invalid

81          Where the minister makes an order under section 80, the minister may declare an agreement under which an oil and gas interest was acquired as a result of misrepresentation to be invalid for the purpose of this Act.

Reinstatement of oil and gas lease agent

82          On application made in accordance with the regulations by an oil and gas lease agent who is the subject of an order under section 80, the minister may direct the registrar

(a) to reinstate or, on application by the oil and gas lease agent under section 78, to renew the registration of the oil and gas lease agent; or

(b) where the term of the registration has expired, to accept the application of the oil and gas lease agent to be registered;

on such terms and conditions as the minister considers necessary or advisable.

PART 7

GEOPHYSICAL OPERATIONS

Definition

83          In this Part, "licensee" means the holder of a geophysical licence issued under this Part.

No geophysical operation without licence

84(1)       No person shall conduct a geophysical operation unless the person holds, or is acting under the instructions of a person who holds, a geophysical licence issued under this Part in respect of the geophysical operation.

Application for geophysical licence

84(2)       A person may, in accordance with the regulations, make application to the director for a geophysical licence, and shall include with the application any prescribed performance security.

Director may issue geophysical licence

84(3)       Where the director is satisfied that an application made under subsection (2) complies with this Act, the director may issue a geophysical licence to the applicant, subject to the regulations and such terms and conditions as the director considers necessary or advisable.

Geophysical operation on highway

84(4)       The director shall not issue a geophysical licence in respect of land that includes a highway without the written approval of the member of the Executive Council charged with the administration of The Highways and Transportation Act, and the geophysical licence shall be made subject to any term or condition the member considers necessary or advisable.

S.M. 2000, c. 35, s. 65.

Application of Surface Rights Act

85          The Surface Rights Act applies in respect of a right of entry to land, including compensation for any loss or damage suffered by an owner or occupant of the land, for the purpose of a geophysical operation.

Licensee to comply with licence and Act

86          A licensee is responsible for the geophysical operation, and shall carry out the geophysical operation in accordance with the geophysical licence and this Act.

Director to approve transfer of licence

87          A licensee shall not transfer a geophysical licence without the prior written approval of the director obtained by application made in accordance with the regulations.

PART 8

WELL LICENCES

Definition

88          In this Part, "licensee" means the holder of a well licence issued under this Part.

Requirement for well licence

89(1)       No person shall drill, operate or carry on any activity related to a well unless the person holds, or is acting under the instructions of a person who holds, a well licence issued under this Part in respect of the well.

Survey of site for well

89(2)       Notwithstanding subsection (1), the site for a proposed well may be surveyed under The Surveys Act without first obtaining a well licence.

Application for well licence

90(1)       A person may, in accordance with the regulations, make application to the director for a well licence, and shall include with the application any prescribed performance security.

Issuance of licence

90(2)       Where the director is satisfied that an application complies with this Act, the director may issue a well licence subject to such terms and conditions as the director considers necessary or advisable.

Applicant must have surface rights

91(1)       The director shall not issue a well licence unless the director is satisfied that the applicant has obtained the necessary surface rights in accordance with the requirements of The Surface Rights Act.

Applicant must have right to produce oil and gas

91(2)       The director shall not issue a well licence for the purpose of drilling for and producing oil and gas unless the director is satisfied that the applicant has, or is the authorized representative of a person who has, a right to drill for and produce oil and gas from the spacing unit in which the proposed well is to be drilled.

Restricted right to produce oil and gas for testing

91(3)       Where a licensee is not the owner of all the oil and gas rights in the spacing unit, the licensee shall not produce oil and gas from the well in the spacing unit, except for testing purposes, until the licensee submits proof satisfactory to the director that the licensee has obtained, through a pooling order under Part 10 or a pooling agreement or other agreement, all of the oil and gas rights in the spacing unit.

Application for purpose other than oil and gas

91(4)       The director shall not issue a well licence for a purpose other than the recovery of oil and gas unless the director is satisfied that the applicant has, or is the authorized representative of a person who has, the rights required for the purpose for which the proposed well is to be used.

Licence void where licensee does not have rights

92          Where the director determines that a licensee did not have the rights required under section 91 at the time the well licence was issued or lost the rights after the well licence was issued, the well licence is void for all purposes except the obligation of the licensee to complete or abandon the well, and to rehabilitate the site of the well, in accordance with this Act.

S.M. 1996, c. 27, s. 21.

Director may refuse to issue well licence

93          Where in the opinion of the director, drilling a well on a site that is proposed in an application might cause significant adverse impact on the environment or significantly impair use of the surrounding land, the director may refuse to issue a well licence.

Director may amend well licence

94(1)       Where, in the opinion of the director, new circumstances or information respecting a well for which a well licence has been issued warrant a change in a term or condition in, or the addition of a term or condition to, the well licence, the director may, after giving written notice to the licensee, vary a term or condition in, or add a term or condition to, the well licence.

Cancellation of well licence where no drilling

94(2)       Where drilling is not commenced within six months from the day a well licence is issued, the director may, after giving written notice to the licensee, cancel the well licence.

Drilling to be done at authorized location

95          A licensee shall not drill a well at a location other than the location specified in the well licence.

Licensee responsible for operations

96          A licensee is responsible for all operations carried out at the well.

Re-entry of abandoned well

97          No person may re-enter a well that is abandoned unless the person is acting under the instructions of the director or holds a well licence in respect of the well.

Well abandoned because of mechanical difficulties

98(1)       Subject to subsection (2), where a licensee decides it is necessary, owing to mechanical difficulties, to abandon a well before drilling is completed, the licensee may, with the prior approval of the director or an inspector, drill another well in the same spacing unit.

New well licence required

98(2)       Where surface casing is set in a well abandoned under subsection (1), the licensee shall not drill another well in the spacing unit without first obtaining a new well licence under this Part.

Director to name each well

99(1)       The director shall, in accordance with the regulations, name each well for which a well licence is issued under this Part and may change the name on his or her own initiative or on application by the licensee in accordance with the regulations.

99(2)       [Repealed] S.M. 1996, c. 27, s. 21.

S.M. 1996, c. 27, s. 21.

Director to approve transfer of licence

100(1)      A licensee shall not transfer a well licence without the prior written approval of the director obtained on application by the licensee or proposed licensee in accordance with the regulations, and the application shall include submission by the proposed licensee of any prescribed performance security.

Transfer where licensee not located

100(2)      Where the director is unable to locate a licensee or is satisfied that a corporation that is a licensee is dissolved, the director may, after receiving the prescribed fee and any prescribed performance security, transfer the well licence to a person who holds the surface rights for the site of the well, and the oil and gas rights in the spacing unit in which the well is located.

Registrar to transfer permit, licence

100(3)      Where a well licence is transferred in accordance with this section, the registrar shall, after receiving any prescribed performance security, transfer to the transferee of the well licence any battery operating permit issued under section 111 and any flow line licence issued under section 146 in respect of the well.

PART 9

OIL AND GAS PRODUCTION AND CONSERVATION

Definitions

101         In this Part,

"licensee" means the holder of a well licence issued under Part 8; (« titulaire de permis »)

"target area" means the part of a spacing unit in which a well drilled for the purpose of producing oil and gas can be completed without reduction of the maximum production rate established for the well under this Act. (« zone cible »)

SPACING UNITS AND TARGET AREAS

Size and shape may be prescribed and varied

102         The Lieutenant Governor in Council may prescribe the size and shape of spacing units and target areas but, notwithstanding any such regulation, an operator may in accordance with the regulations make application to the minister to vary the size or shape of a spacing unit or of a target area within the spacing unit, or both, and the minister may by order alter the size or shape of the spacing unit or target area, or both, subject to the regulations and such terms and conditions as the minister considers necessary or advisable.

Effect of completion outside target area

103(1)      Subject to subsection (2), where any part of a well is completed outside the target area for the well, the maximum production rate established for the well shall be reduced in accordance with the regulations.

Director may waive reduction

103(2)      A licensee may, in accordance with the regulations, make application to the director to waive the application of subsection (1), and the director may waive its application if he or she is satisfied that correlative rights are not adversely affected by completion of the well outside the target area.

DRILLING, COMPLETION AND SERVICING

Duty of licensee re equipment and methods

104         The licensee of a well shall ensure that equipment or methods used to drill, complete, service, operate or abandon the well comply with the regulations and The Workplace Safety and Health Act.

MAXIMUM PRODUCTION RATE

Prescribed maximum production rates

105(1)      The Lieutenant Governor in Council may make regulations respecting the maximum production rates applicable to wells or classes of wells but, notwithstanding any such regulation, the minister may by order vary or remove a maximum production rate applicable to a well or class of wells.

Application for variation or removal

105(2)      A licensee may, in accordance with the regulations, make application to the minister to vary or remove the maximum production rate applicable to the well or pool from which the well is producing.

Order where gas or water reduces oil recovery

105(3)      Where, in the opinion of the minister, a well is producing gas or water in an amount that is reducing or is likely to reduce the amount of oil that could otherwise be recovered from the pool in which the well is completed, the minister may by order reduce the maximum production rate applicable to the well by such amount as the minister considers necessary or advisable.

Restriction of production

106         Where the monthly production from a well exceeds the maximum production rate prescribed or ordered for the well under section 105 the licensee shall restrict production from the well in accordance with the regulations.

New well in spacing unit already producing

107         Where a well in a spacing unit is producing or capable of producing oil and gas from a pool, a licensee shall not produce oil and gas from any other well drilled in the spacing unit unless the licensee makes application, in accordance with the regulations, to do so and the director in writing authorizes production from the well, subject to such terms and conditions as the director considers necessary or advisable.

Approval for commingled production or injection

108         A licensee shall segregate production from, or the injection of a substance into, two or more pools through a well unless the director approves, on application made in accordance with the regulations, commingled production from or injection into the well.

DISPOSAL OF SALT WATER

Disposal in accordance with permit or order

109(1)      A licensee shall dispose of any salt water produced from a well by reinjecting the salt water into an underground formation in accordance with the regulations and a salt water disposal permit issued under this section or an order made under subsection 116(2).

Application for disposal permit

109(2)      A licensee may, in accordance with the regulations, make application to the director for a salt water disposal permit.

Director may issue permit or refer application

109(3)      On receiving an application under subsection (2), the director may

(a) issue a salt water disposal permit to the licensee on such terms and conditions as the director considers necessary or advisable;

(b) where, in the opinion of the director, approval of the application is not in the public interest, deny the application; or

(c) refer the application to the minister, in which case the application is deemed to be an application to the minister under subsection 8(2).

Transportation of salt water

110         A licensee shall ensure that equipment used to transport salt water produced from a well is designed, operated and maintained in accordance with the regulations.

CONSTRUCTION AND OPERATION OF BATTERIES AND GAS PLANTS

No construction of battery without approval

111(1)      No person shall

(a) construct a battery without the prior written approval of an inspector; or

(b) operate a battery without a battery operating permit.

Application for battery operating permit

111(2)      A person may, in accordance with the regulations, make application to the director for a battery operating permit, and shall include with the application any prescribed performance security.

No construction until application made for permit

111(3)      An inspector shall not approve the construction of a battery under subsection (1) before an application for a battery operating permit is made under subsection (2).

Powers of director on application

111(4)      Where an application is made under subsection (2), the director may, after construction of the battery is completed, issue a battery operating permit in accordance with the regulations and on such terms and conditions as the director considers necessary or advisable.

Inspector to approve modification to battery

111(5)      The holder of a battery operating permit shall not make a modification to the battery without the approval of an inspector obtained by application made in accordance with the regulations.

Director to name each battery

112         The director shall, in accordance with the regulations, name each battery for which a battery operating permit is issued under this Part and may change the name on his or her own initiative or on application by the holder of the battery operating permit in accordance with the regulations.

No construction or operation without approval

113(1)      No person shall construct or operate a gas plant unless the person holds, or is acting under the instructions of a person who holds, a gas plant permit issued under this Part.

Application for gas plant permit

113(2)      A person may, in accordance with the regulations, make application to the minister for a gas plant permit.

Consideration of application by minister

113(3)      On receipt of an application under subsection (2), the minister shall give notice of the application in accordance with the regulations, and shall not approve the application unless the minister

(a) considers any representations and recommendations received as a result of giving notice of the application; and

(b) is satisfied that the application complies with this Act, and that the proposed construction and operation is consistent with the principles of sustainable development.

Minister may issue gas plant permit

113(4)      The minister may, in accordance with the regulations, issue a gas plant permit for the construction and operation of a gas plant on such terms and conditions as the minister considers necessary or advisable.

Operator to limit discharge of pollutants

114(1)      The operator of a battery or gas plant shall at all times make every reasonable effort to operate the battery or gas plant with the least possible discharge of pollutants, as defined in The Environment Act.

Director's powers respecting pollutants

114(2)      Where the director is of the opinion that a discharge of pollutants from a battery or gas plant is a hazard to public health or is having or might have a significant adverse effect on the environment, the director may in accordance with the regulations require the operator of the battery or gas plant to take such steps to stop or reduce the discharge of pollutants as the director considers necessary or advisable.

Minister may require gas conservation

115         Where the minister is of the opinion that the escape or flaring of gas at a well, battery or gas plant constitutes waste, the minister may require the operator of the battery or gas plant to alter the operation of the battery or gas plant in order to conserve gas.

ENHANCED RECOVERY

Minister's approval required

116(1)      No person shall undertake enhanced recovery without the approval of the minister.

Application to minister

116(2)      An application for approval of a project of enhanced recovery must be made to the minister, in accordance with the regulations, and the minister may by order approve an application on such terms and conditions as he or she considers necessary or advisable.

Report on feasibility of enhanced recovery

117         The minister may by order require the operator of wells in a pool to investigate and report to the minister, within such time as the minister may fix in the order, on the feasibility of implementing enhanced recovery in the pool.

Minister may refer matter to board

118(1)      After receiving a report under section 117, or where the operator fails to implement enhanced recovery within a time specified in an order made under subsection 116(2), the minister may refer the matter to the board under subsection 8(1) and on so doing shall direct the board to hold a hearing in respect of the matter.

Minister may suspend or restrict production

118(2)      Where, after consideration of the report of the board under subsection (1), the minister is satisfied that enhanced recovery is necessary or advisable to prevent waste, the minister may by order require the operator to suspend or restrict production from a pool or part of a pool until the operator implements enhanced recovery or takes such other action to prevent waste as is satisfactory to the minister.

SPILLS

Prevention

119(1)      The operator of a well or an oil and gas facility shall at all times make every reasonable effort to prevent a spill and for that purpose shall, in accordance with the regulations, install equipment to prevent a spill at the well or oil and gas facility.

Duties of operator on spill

119(2)      Where a spill occurs, the operator of the well or oil and gas facility shall, in accordance with the regulations, report the spill to an inspector and shall, subject to any order of an inspector under subsection (4),

(a) stop the spill;

(b) contain and clean up the spill;

(c) repair or replace any faulty or damaged equipment that caused or contributed to the spill;

(d) mitigate or eliminate any danger to life, health, the environment or property arising from the spill;

(e) take steps to rehabilitate any land affected by the spill; and

(f) take steps to prevent the occurrence of a similar spill.

Duty to rehabilitate after spill

119(3)      Clause (2)(e) applies to

(a) the operator of an oil and gas facility; or

(b) the licensee of a well;

at which a spill occurs, whether before or after this section comes into force.

Power of inspector re spill procedure

119(4)      An inspector may by order specify the action to be taken by an operator under subsection (2) and, where the operator does not take appropriate action under subsection (2) or the order, the inspector may, with the approval of the director, take such action as the inspector considers necessary or advisable.

Continuing duty of operator and successor

119(5)      Subsection (2) applies to the operator of a well or oil and gas facility and to a successor operator of the well or oil and gas facility until the obligations under subsection (2) and any order made by an inspector under subsection (4) are discharged.

Minister may relieve operator from application

119(6)      Notwithstanding subsections (2) and (5), the minister may by order, with the consent of the owner of the land on which a spill has occurred and on such terms and conditions as the minister considers necessary or advisable, relieve an operator of a well or an oil and gas facility, including a successor operator, from the application of subsection (2) where the minister is satisfied that further mitigation or rehabilitation in respect of the spill is not practicable.

Liability for costs

119(7)      An operator of a well or an oil and gas facility at which a spill occurs is liable, without proof of negligence and notwithstanding due diligence on the part of the operator, for the costs and expenses reasonably incurred by the inspector or any other person in action taken under subsection (4).

Definition

120(1)      In this section, "oil spill cooperative" means two or more operators of wells or oil and gas facilities who agree to combine resources and expertise for the purpose of containing and cleaning up spills in accordance with this Act.

Environmental protection plan

120(2)      Subject to subsection (3), the director may require an operator of a well or an oil and gas facility to develop and file, in accordance with the regulations, an environmental protection plan in respect of the well or oil and gas facility.

Exemption of members of oil spill cooperative

120(3)      The director shall not require an operator of a well or oil and gas facility who is a member of an oil spill cooperative to file an environmental protection plan under subsection (2) unless the well or oil and gas facility is located in an area that, in the opinion of the director, is environmentally sensitive.

Minister may require oil spill cooperative

120(4)      The minister may by order require the operator of a well or oil and gas facility to be a member of an oil spill cooperative.

Duties of oil spill cooperative

120(5)      The members of an oil spill cooperative shall, in accordance with the regulations,

(a) develop and file with the director an environmental protection plan in respect of the wells and oil and gas facilities operated by the members;

(b) conduct training exercises in the use of equipment that is required for the oil spill cooperative to contain and clean up a spill; and

(c) provide the director with regular reports respecting the activities of the oil spill cooperative.

EMERGENCY, FIRE, BLOWOUT, ACCIDENT

Operator to report fire, blowout or accident

121(1)      The operator of a well or oil and gas facility shall, in accordance with the regulations, report to an inspector any fire, blowout or accident that occurs at the well or oil and gas facility.

Declaration of state of emergency

121(2)      Where the minister is satisfied that conditions at the site of a well or oil and gas facility are an immediate hazard to the health or safety of people in the area or to the environment, the minister may request the member of the Executive Council charged with the administration of The Emergency Measures Act to declare a state of emergency under that Act.

ABANDONMENT AND REHABILITATION

Application to abandon well or battery

122(1)      No person shall abandon a well or battery without the approval of the director obtained on application made in accordance with the regulations.

Approval of application to abandon

122(2)      The director may approve an application made under subsection (1), subject to such terms and conditions as the director considers necessary or advisable.

Operator to abandon well or battery

122(3)      Where the director approves the abandonment of a well or battery under subsection (2), the operator of the well or battery shall abandon it in accordance with the regulations and any term or condition set under subsection (2).

Abandonment of well or battery

123(1)      Where the director is of the opinion that a well or battery is no longer required or is a hazard or potential hazard to public safety or the environment, the director may give notice thereof to the operator and, where such a notice is given, the operator shall within 30 days of receiving the notice

(a) make application to the director under section 122 and, where the director approves the application, abandon the well or battery designated in the notice, in accordance with this Act; or

(b) show cause acceptable to the director for not abandoning the well or battery designated in the notice.

Director's powers on show cause

123(2)      Where the operator of a well or battery shows cause under clause (1)(b), the director may approve the continued use or the suspension of operation of the well or battery designated in the notice given under subsection (1), subject to such terms and conditions as the director considers necessary or advisable.

Well or battery may be seized

124         Where an operator fails to comply with section 123, the minister may authorize the director to seize the well or battery under section 182.

S.M. 1995, c. 33, s. 16.

Operator must rehabilitate site

125         An operator who abandons a well or battery shall rehabilitate the site of the well or battery in accordance with the regulations and The Surface Rights Act.

PART 10

POOLING ORDERS

Application to minister

126(1)      Where working interest owners of tracts within a spacing unit are unable to conclude a pooling agreement, any of the working interest owners may, in accordance with the regulations, make application to the minister to make a pooling order under subsection (2) in respect of the spacing unit.

Minister may make pooling order

126(2)      Where, in respect of an application received under subsection (1), the minister is satisfied that a pooling order is necessary to permit development of the spacing unit, the minister may make a pooling order.

Provisions of pooling order

126(3)      In a pooling order made under subsection (2), the minister shall

(a) provide for the development or operation of the spacing unit, including the time within which a well in the spacing unit is to be drilled;

(b) appoint a person as operator of the spacing unit;

(c) provide for allocation to each tract a share of oil and gas production from the spacing unit, in accordance with subsection (4);

(d) allocate among the working interest owners the costs of

(i) drilling and completing the well, whether drilled before or after the making of the pooling order, and

(ii) operation and abandonment of the well,

in the same proportion as production is allocated to each tract under clause (c), and provide for payment of the costs;

(e) provide for the sale by the operator appointed under clause (b) of the oil and gas production allocated to a tract under clause (c), where the working interest owner of the tract does not take or dispose of the production, and for deduction out of the proceeds of the sale of compensation for expenses reasonably incurred by the operator in connection with the sale; and

(f) provide for such other matters as the minister considers necessary or advisable.

Production allocation to each tract

126(4)      The minister shall make the allocation under clause (3)(c) in the same proportion as each tract is to the whole of the spacing unit, unless the minister is satisfied that such an allocation is inequitable, in which case the minister may make an allocation that, in the opinion of the minister, is equitable.

Penalty for not sharing drilling costs

126(5)      The minister may provide in a pooling order that if the well produces oil and gas and a working interest owner fails to pay or to agree to pay his or her share of the cost of drilling and completing the well within a time specified in the pooling order, the working interest owner shall pay, unless an agreement among the working interest owners otherwise provides, a penalty in addition to his or her share of the cost.

Penalty not to exceed one-half of cost

126(6)      A penalty under subsection (5) is payable to the operator of the spacing unit and shall not exceed 1/2 of the cost payable by the working interest owner in respect of the well.

Recovery of share of costs and penalty

126(7)      Where a working interest owner fails to pay the share of costs allocated to him or her under clause (3)(d), the costs and any penalty payable under subsection (5) are recoverable by the operator of the spacing unit only out of the share of production allocated to the working interest owner under clause (3)(c) or out of proceeds of sale under clause (3)(e).

Pooling order binding on owners

126(8)      A pooling order made under this Part is binding on all working interest owners and royalty owners having an interest in the spacing unit.

Operation deemed to be on respective tracts

127         Where a pooling order is made under section 126,

(a) the drilling for and production of oil and gas from the spacing unit and any operation incidental to the drilling and production under the pooling order are, for all purposes under this Act and in respect of the obligations of the working interest owners under any lease or contract affecting the tract, deemed to be carried on by the working interest owners in their respective tracts in the spacing unit; and

(b) the portion of the production allocated to each tract under clause 126(3)(c) is deemed to be produced from the tract.

Application to amend or revoke pooling order

128(1)      A working interest owner affected by a pooling order made under this Part may, in accordance with the regulations, make application to the minister for an order amending or revoking the pooling order.

Minister may amend or revoke pooling order

128(2)      Where an application is made under subsection (1), the minister may by order

(a) revoke the pooling order; or

(b) subject to subsection (3), amend or revoke a provision in the pooling order to remedy a deficiency in the pooling order or to meet changing conditions.

Consent of owners required for certain changes

128(3)      In an order made under clause (2)(b), the minister shall not, except with the consent of the owners of the tracts within the spacing unit, change the allocation of oil and gas production made to each tract, or the basis for the allocation of costs to each owner, made in the pooling order.

Minister may revoke order if no drilling

128(4)      Where a pooling order requires a well to be drilled within a period of time specified in the pooling order and the well is not drilled within that period of time, the minister may revoke the pooling order.

Minister to determine costs

129         The minister shall determine any dispute among working interest owners respecting the costs to be allocated under clause 126(3)(d).

Inclusion of spacing unit in unit area

130         Subject to section 131, where a spacing unit that is subject to a pooling order made under this Part becomes part of a unit area under Part 11, the pooling order is subject to the provisions of the unit agreement or unit order creating the unit area, and the provisions of this Part applicable to the pooling order are subject to the provisions of Part 11 applicable in respect of the unit agreement or unit order.

Sharing of production and costs of unit production

131         Where a spacing unit that is subject to a pooling order made under this Part becomes part of a unit area, the unit agreement or unit order that creates the unit area shall provide, and every unit agreement or unit order is deemed to provide, that the share of unit production and the share of the costs of the unit operation that are allocated to the spacing unit shall be allocated to the tracts or to the working interest owners in the spacing unit in accordance with the provisions of the pooling order.

PART 11

UNIT OPERATIONS

Unit agreement in force only on registration

132         Notwithstanding any provision of a unit agreement or an amendment to a unit agreement to the contrary, a unit agreement, or an amendment to a unit agreement, to add a spacing unit to the unit operation does not come into force until the first day of the month following the month in which the unit agreement or amendment is registered by the registrar in accordance with the regulations.

Crown may be party to unit agreement

133         Where the Crown is an owner of a tract, the minister may on behalf of the Crown enter into a unit agreement in respect of the tract.

UNIT ORDERS

Application by working interest owner

134         Where the working interest owners in two or more spacing units are not able to conclude a unit agreement, any of the working interest owners may, in accordance with the regulations, make application to the minister to make a unit order in respect of the spacing units.

Minister may make unit order

135(1)      Subject to the approval of the Lieutenant Governor in Council, the minister may make a unit order where the minister is satisfied that, in respect of the proposed unit area, a unit operation

(a) will result in more efficient production of oil and gas; or

(b) is necessary or advisable to prevent waste or to protect correlative rights.

Provisions of unit order

135(2)      In a unit order made under subsection (1), the minister shall provide a plan of unit operation that

(a) fixes the date on which the unit operation becomes effective;

(b) includes a legal description of each unit tract in the unit area;

(c) determines, or provides a method for determining, the credits and charges to be made in any financial adjustment required among the working interest owners, including the cost of the capital investment made by the working interest owners in the unit area before the effective date of the unit operation;

(d) provides a method for allocating to each unit tract a share of the oil and gas recovered from the unit area;

(e) allocates to each working interest owner a share of the operating costs of the unit operation and of the capital costs to be expended in the unit area;

(f) establishes an operating committee composed of working interest owners or their representatives and

(i) specifies a period of time within which the committee must appoint a working interest owner as the unit operator,

(ii) establishes the voting interest of each member of the operating committee, and

(iii) specifies the method of voting on a motion brought before the committee and the voting interest required to carry a motion;

(g) provides for termination of the unit operation, including the manner in which the unit operation may be terminated and circumstances in which the unit operation is deemed to be terminated; and

(h) includes such further provisions as the minister considers necessary or advisable for the purpose of subsection (1).

Owner's share of the cost of unit operation

135(3)      The liability of each working interest owner to pay a share of the costs of a unit operation allocated under clause (1)(e) is at all times several and not joint and in no event is a working interest owner liable, directly or indirectly, for more than the amount of the costs allocated to the working interest owner under the unit order.

Minister may appoint unit operator

136         Where an operating committee fails to appoint a unit operator within the period of time specified in the unit order, the minister may appoint a unit operator for the unit operation.

Right of unit operator to recover costs

137         Where a working interest owner fails to pay the share of the costs allocated to the working interest owner in accordance with a unit order, the unit operator

(a) may, to the extent necessary to recover the costs, appropriate and sell the share of oil and gas production allocated to the working interest owner under the unit order, and shall pay

(i) in the case of Crown oil and gas rights, any royalty payable to the Crown, and

(ii) in the case of oil and gas rights subject to a lease from a freehold owner of the oil and gas rights, the royalty payable under the lease to the lessor, and any tax payable to the Crown under The Oil and Gas Production Tax Act; and

(b) has a lien on the interest of the working interest owner in the equipment that belongs to the unit operation to secure payment of the share of the costs.

Application to amend unit order

138(1)      A working interest owner or unit operator may, in accordance with the regulations, make application to the minister to make an order to amend a unit order

(a) to remedy a deficiency in the order;

(b) to meet changing conditions;

(c) to add a spacing unit to the unit area; or

(d) to join two or more unit areas into one unit area.

Order to amend unit order

138(2)      Subject to the approval of the Lieutenant Governor in Council and to subsections (3) and (4), the minister may make an order to amend a unit order.

Amendment not to affect allocations

138(3)      In an order made under subsection (2), the minister shall not amend the provisions of the unit order respecting the allocation of

(a) oil and gas production; or

(b) the costs of the unit operation.

Allocation if spacing unit added or unit areas joined

138(4)      Where a unit order is amended to add a spacing unit to a unit area, or to join unit areas, the minister shall, for the purpose of allocating oil and gas production and the costs of the unit operation, deem the previously established unit area to be a unit tract within the unit area as amended, and shall allocate the share of production and costs allocated to the previously established unit area among the unit tracts in the previously established unit area in the same proportions as are specified in the unit order before the amendment is made.

Unit operator is agent of owners

139         Notwithstanding any provision in a unit agreement to the contrary, a unit operator acting under a unit agreement or unit order acts for and on behalf of the working interest owners in the unit area with respect to powers and duties of working interest owners under this Act.

Unit operator deemed to be licensee and permittee

140(1)      Where a well licence, flow line licence, battery operating permit or salt water disposal permit has been issued under this Act in respect of a well or oil and gas facility that is later the subject of a unit order or unit agreement, the unit operator is, subject to his or her filing any prescribed performance security, deemed for the purposes of this Act to be the transferee of the licence or permit from the day on which the unit operation becomes effective.

New unit operator deemed to be licensee and permittee

140(2)      A unit operator appointed to replace another unit operator is, subject to the new unit operator filing any prescribed performance security, deemed for the purposes of this Act to be, from the day of the appointment, the transferee of any licence or permit that is in the name of the previous unit operator and that relates to the unit operation.

Transfer of disposition not required

141         The holder of a disposition in a unit area is not required to transfer the disposition to the unit operator.

Effect of unit order and unit agreement

142         A unit agreement or a unit order is an operating arrangement and does not transfer title to the unit operator or vest in an owner of a unit tract in the unit area an interest in the other unit tracts in the unit area.

Unit operation satisfies lease obligation

143         A unit operation conducted under a unit agreement or unit order is for all purposes deemed to be conducted for the production of oil and gas from each unit tract in the unit area in satisfaction of the obligations of the working interest owner of the unit tract under a lease applicable to the unit tract.

Allocated production deemed from unit tract

144         The portion of oil and gas production from a unit area that is allocated to a unit tract under a unit agreement or unit order is for all purposes deemed to be oil and gas production from the unit tract.

PART 12

FLOW LINES AND PIPELINES

FLOW LINES

Director may designate flow line

145         The director may designate a pipe or system of pipes as a flow line for the purpose of this Act.

No construction of flow line without approval

146(1)      No person shall

(a) construct a flow line without the prior written approval of an inspector; or

(b) operate a flow line without a flow line licence.

Application for flow line licence

146(2)      A person may, in accordance with the regulations, make application to an inspector for a flow line licence, and shall include with the application any prescribed performance security.

No approval until application made for licence

146(3)      An inspector shall not approve the construction of a flow line under subsection (1) before an application for a flow line licence is made under subsection (2).

Powers of inspector on application

146(4)      Where an application is made under subsection (2), an inspector may, after construction of the flow line is completed, issue a flow line licence in accordance with the regulations on such terms and conditions as the inspector considers necessary or advisable.

Applicant must have surface rights

146(5)      An inspector shall not approve the construction of a flow line under subsection (1), or issue a flow line licence under subsection (4), unless the inspector is satisfied that the applicant has the necessary surface rights.

Inspector to approve modification to flow line

146(6)      The holder of a flow line licence shall not make a modification to the flow line without the approval of an inspector obtained by application made in accordance with the regulations.

Notice re abandonment of flow line

147(1)      An inspector who is of the opinion that a flow line or a part of a flow line is no longer required or is a hazard or potential hazard to public safety or the environment may give notice thereof to the holder of the flow line licence and, where such a notice is given, the holder shall within 30 days of receiving the notice

(a) abandon the flow line, or the part of it designated in the notice, in accordance with the regulations; or

(b) show cause acceptable to the inspector for not abandoning the flow line or the part of it designated in the notice.

Inspector's powers on show cause

147(2)      Where the holder of a flow line licence shows cause under clause (1)(b), the inspector may approve the continued use or the suspension of operation of the flow line or the part of it designated in the notice given under subsection (1), subject to such terms and conditions as the inspector considers necessary or advisable.

PIPELINES

Definitions

148         In sections 149 to 158,

"licensee" means the holder of a pipeline operating licence issued under subsection 152(3) and, in sections 154 to 158, includes the holder of a flow line licence; and (« titulaire de permis d'exploitation »)

"permittee" means the holder of a pipeline construction permit issued under section 149. (« titulaire de permis de construction »)

PIPELINE CONSTRUCTION

Pipeline construction permit required

149(1)      No person shall begin the construction of a pipeline without a pipeline construction permit authorizing the construction.

Application for construction permit

149(2)      A person may, in accordance with the regulations, make application to the minister for a pipeline construction permit, and shall include with the application any prescribed performance security.

Consideration of application by minister

149(3)      On receipt of an application under subsection (2), the minister shall give notice of the application in accordance with the regulations, and shall not approve the application unless the minister

(a) considers any representations and recommendations received as a result of giving notice of the application; and

(b) is satisfied that the application complies with this Act, and that the proposed construction is consistent with the principles of sustainable development.

Minister may issue construction permit

149(4)      The minister may, in accordance with the regulations, issue a pipeline construction permit on such terms and conditions as the minister considers necessary or advisable.

Minister to fix route of pipeline

149(5)      Where the minister issues a pipeline construction permit under subsection (4), the minister shall, in accordance with the regulations, fix the route of the pipeline.

Modification of pipeline requires approval

150(1)      A licensee shall not make a modification to the pipeline without the approval of the minister obtained by application made in accordance with the regulations.

Repair or maintenance not included

150(2)      Subsection (1) does not apply in respect of a modification made for the repair or maintenance of a pipeline.

ACCESS TO LAND

When permittee may enter land

151(1)      A person who has made application under subsection 149(2) for a pipeline construction permit may, with the authorization of the minister made in accordance with the regulations, enter upon the route of the pipeline, as proposed in the application, for the purpose of surveys, examinations or other activities on the land required to evaluate the proposed route.

Construction or relocation only after consent or order

151(2)      A permittee may not commence construction or relocation of a pipeline before

(a) concluding an agreement with the owner and any lawful occupant of the land on which the pipeline is to be constructed or relocated; or

(b) obtaining an order granting the necessary rights under The Surface Rights Act.

Application of Surface Rights Act

151(3)      Compensation for, and terms and conditions respecting, entry upon land under this section, and the use of the land for the purpose of constructing and operating a pipeline shall be determined under The Surface Rights Act.

PIPELINE OPERATION

Pipeline operating licence required

152(1)      No person shall operate a pipeline without a pipeline operating licence.

Application for pipeline operating licence

152(2)      A person may, in accordance with the regulations, make application to the minister for a pipeline operating licence, and shall include with the application any prescribed performance security.

Issuance of pipeline operating licence

152(3)      Where the minister is satisfied that an applicant for a pipeline operating permit has complied with this Act and the terms and conditions of the pipeline construction permit, the minister may, in accordance with the regulations, issue a pipeline operating licence to the applicant.

Reports and information to the director

152(4)      A licensee shall, in respect of the operation of the pipeline, provide reports and other information to the director in accordance with the regulations.

Licensee subject to prohibitions

152(5)      A licensee shall not, except with the prior written consent of the minister or to comply with a shut down order made under this Act,

(a) suspend the operation of the pipeline except in an emergency, for repairs or maintenance, or in the ordinary course of operating the pipeline;

(b) discontinue use of the pipeline; or

(c) where the use of the pipeline has been discontinued, resume operation of the pipeline.

Notice re abandonment of pipeline

152(6)      Where the minister is of the opinion that a pipeline, or any part of a pipeline, is no longer required or presents a hazard or potential hazard to public safety or the environment, the minister may give notice thereof to the licensee and, where such a notice is given, the licensee shall within 30 days of receiving the notice

(a) abandon the pipeline, or the part of it designated in the notice, in accordance with this Act; or

(b) show cause acceptable to the minister for not abandoning the pipeline or the part of it designated in the notice.

Minister's powers on show cause

152(7)      Where the licensee shows cause under clause (6)(b), the minister may approve the continued use or the suspension of operation of the pipeline or the part of it designated in the notice given under subsection (6), subject to such terms and conditions as the minister considers necessary or advisable.

COMMON CARRIERS

Definition

153(1)      In this section, "common carrier" means a licensee who is declared under subsection (5) to be a common carrier.

Common carrier must carry oil and gas supplied

153(2)      Subject to the regulations and any terms and conditions set by the minister under subsection (5), a common carrier shall carry all the oil and gas or refined petroleum products supplied to the pipeline.

Application to declare common carrier

153(3)      A person may, in accordance with the regulations, make application to the minister for an order declaring a licensee to be a common carrier.

Consideration of application by minister

153(4)      On receipt of an application under subsection (3), the minister shall give notice of the application in accordance with the regulations, and shall not make an order under subsection (5) unless the minister

(a) considers any representations and recommendations received as a result of giving notice of the application; and

(b) is satisfied that the application complies with this Act, and that the proposal is consistent with the principles of sustainable development.

Order declaring or revoking common carrier

153(5)      The minister may make an order declaring a licensee to be a common carrier or revoking such a declaration, subject to the regulations and such terms and conditions as the minister considers necessary or advisable.

When licensee may reduce products carried

153(6)      Subject to subsection (7), where, in the opinion of a common carrier, the pipeline operated by the common carrier cannot carry all the oil and gas or refined petroleum products supplied to it, the licensee

(a) where no plan has been approved under subsection (7) or order made under subsection (8), may in an equitable manner; or

(b) where a plan has been approved under subsection (7), or an order made under subsection (8), shall in accordance with the approved plan or order;

reduce the amount of oil and gas or refined petroleum products accepted from suppliers.

Minister may require plan respecting reductions

153(7)      The minister may require a common carrier to submit for approval by the minister a plan outlining the manner in which the licensee would, when clause (6)(a) applies, reduce the amount of oil and gas or refined petroleum products accepted from suppliers.

Minister may determine reduction

153(8)      Where, in the opinion of the minister, a plan submitted by a common carrier under subsection (7) is not equitable, the minister may by order determine the manner in which any reduction by the common carrier shall be made.

GENERAL

Public safety and the environment

154          A permittee or licensee shall locate, construct, maintain and operate a flow line or pipeline so as not to endanger the health or safety of people, to minimize any adverse impact on the environment, and in accordance with the regulations.

Constructing pipeline or flow line over highway

155         No person shall construct a pipeline or flow line across or within a prescribed distance of

(a) a highway without the prior written consent of the member of the Executive Council charged with administration of The Highways and Transportation Act; or

(b) a road or highway under the jurisdiction of a municipality or local government district without the prior written consent of the municipality or local government district.

S.M. 2000, c. 35, s. 65.

Relocation of pipeline or flow line

156(1)      The Crown or any person may, in accordance with the regulations, make application for an order relocating all or part of a pipeline or flow line, and where the minister is satisfied that relocation of the pipeline or flow line, or any part of it, is in the public interest, the minister may by order

(a) direct the permittee or licensee to relocate the pipeline or flow line, or any part of it; and

(b) amend any term or condition in a pipeline construction permit, pipeline operating licence or flow line licence issued in respect of the pipeline or flow line, as the minister considers necessary or advisable.

Allocation of costs

156(2)      Where an order is made under subsection (1), the minister may allocate some or all of the costs of the relocation to the licensee, the permittee or the person who made application for the order, in such amounts or proportions as the minister considers fair and just.

Surface improvement or work on right of way

157(1)      No person shall place or construct an improvement or work, other than an improvement or work that is ancillary to the pipeline or flow line, on the right of way of a pipeline or flow line, whether on the surface or underground, without the prior written consent of the licensee or permittee.

Copy of consent to director

157(2)      On the request of the director, a permittee or licensee shall provide a copy to the director of any consent given by the licensee or permittee under subsection (1).

Order to remove or modify improvement or work

157(3)      Where an improvement or work is placed or constructed on or under the right of way of a pipeline or flow line in contravention of this section, the minister may by order direct the removal or a modification of the improvement or work at the expense of the owner of the improvement or work.

Transfer of permit or licence

158         Subject to subsection 100(3), a licence or permit issued under this Part may be transferred in accordance with the regulations.

PART 13

STORAGE RESERVOIRS

Definitions

159         In this Part,

"designated storage area" means an area of land designated under a storage permit for the development and operation of a storage reservoir; (« zone de stockage désignée »)

"storage permit" means a permit issued under section 162. (« licence de stockage »)

STORAGE PERMIT

No storage reservoir without storage permit

160(1)      No person shall develop or operate a storage reservoir unless the person is the holder of a storage permit issued under this Part in respect of the storage reservoir.

Effect of storage permit

160(2)      A storage permit conveys the exclusive right to develop and operate a storage reservoir within the designated storage area.

Application of Public Utilities Board Act

161         The development and operation of a storage reservoir is subject to The Public Utilities Board Act.

Application to the minister

162(1)      A person may, in accordance with the regulations, make application to the minister for a storage permit, and shall include with the application any prescribed performance security.

Consideration of application by minister

162(2)      On receipt of an application under subsection (1), the minister shall give notice of the application in accordance with the regulations, and shall not approve the application unless the minister

(a) considers any representations and recommendations received as a result of giving notice of the application; and

(b) is satisfied that the application complies with this Act, and that the proposed development and operation is consistent with the principles of sustainable development.

Minister may issue storage permit

162(3)      Subject to the regulations and the approval of the Lieutenant Governor in Council, the minister may issue a storage permit subject to such terms and conditions as the minister considers necessary or advisable.

Minister must approve transfer of storage permit

163         A storage permit issued under this Part is not transferable in whole or in part without the prior written approval of the minister.

Holder of permit to report to director

164         A holder of a storage permit shall, in accordance with the regulations, provide information to the director respecting the development and operation of the storage reservoir.

COMPENSATION

Subsurface operation in designated storage area

165         Except as may be permitted under a storage permit, no person shall undertake a subsurface operation within a designated storage area without the prior written approval of the minister.

Compensation for adverse effect on access

166(1)      Where the development or operation of a storage reservoir has or might have an adverse effect on access to or recovery of oil and gas or minerals from the designated storage area, the holder of the storage permit shall make just and equitable compensation to the owner of the oil and gas or minerals.

Application to minister

166(2)      Where the amount of compensation payable under subsection (1) cannot be determined by agreement, the owner of the oil and gas or minerals or the holder of the storage permit may make application to the minister for determination of the amount of compensation and the minister may by order determine the amount of compensation.

Compensation payable to Crown

166(3)      Where the Crown is the owner of oil and gas or minerals in a designated storage area, the compensation payable pursuant to subsection (1) shall be determined in accordance with the regulations.

PART 14

PERFORMANCE SECURITY

No licence or permit without performance security

167(1)      A licence or permit shall not be issued or transferred under this Act unless the applicant for, or the transferee of, the licence or permit provides any performance security required under this Act.

Refund where licence or permit not issued

167(2)      Subject to this Part, where an applicant for a licence or permit provides a performance security in respect of the issue or transfer of a licence or permit that is not issued or transferred, the director shall refund the performance security to the applicant.

PERFORMANCE DEPOSIT

Use of performance deposit

168(1)      Where the holder of a licence or permit for which a performance deposit is required under this Act is not in compliance with this Act, the minister may use all or a part of the performance deposit of the holder to defray costs arising in relation to

(a) the drilling, completion, operation, suspension of operation, or abandonment of a well;

(b) the construction, operation, suspension of operation, or abandonment of an oil and gas facility;

(c) rehabilitating the site on which a well or oil and gas facility has been established or where geophysical operations have been conducted; or

(d) any adverse impact on property or the environment resulting or that might result, in the opinion of the minister, from a well, oil and gas facility, or geophysical operation.

Performance deposit to be maintained

168(2)      Where all or part of the performance deposit provided by the holder of a permit or licence is expended by the minister under subsection (1), the holder shall, on receiving notice from the director, restore the performance deposit to the prescribed amount.

Refund respecting geophysical operation

169(1)      Where the director is satisfied that the holder of a geophysical licence has completed the geophysical operation and has complied with this Act, the director shall refund, in accordance with section 170, the performance deposit provided in respect of the geophysical licence.

Refund on abandonment or transfer

169(2)      Where the holder of a licence or permit in respect of a well or oil and gas facility

(a) transfers the licence or permit in accordance with this Act; or

(b) abandons the well or oil and gas facility, or a part of the oil and gas facility, rehabilitates the affected land in compliance with this Act and The Surface Rights Act, and obtains a Certificate of Abandonment under this Part;

the portion of any performance deposit that was provided in respect of the licence or permit and that is in excess of the prescribed amount shall be refunded in accordance with section 170.

Persons entitled to refund

170(1)      Where a performance deposit is refundable under this Part, the director shall refund the performance deposit to the person from whom it was received unless the person provides other directions in writing.

Where person cannot be found

170(2)      Where a person from whom a performance deposit was received is not at the address for service provided pursuant to section 208, and the director is otherwise unable to locate the person or any other person named by the person to receive the refund, the director shall pay the performance deposit into the Abandonment Fund Reserve Account.

ABANDONMENT

Certificate of Abandonment

171(1)      Where a licence or permit issued in respect of a well or oil and gas facility is cancelled, or the well or oil and gas facility is abandoned, the holder of the licence or permit may, in accordance with the regulations, make application to an inspector for a Certificate of Abandonment in respect of the well or oil and gas facility.

Inspector may issue Certificate of Abandonment

171(2)      On receipt of an application under subsection (1), an inspector may, in accordance with the regulations, issue a Certificate of Abandonment to the applicant in respect of the well or oil and gas facility.

Effect of Certificate on performance deposit

171(3)      A performance deposit is not required for a well or oil and gas facility for which a Certificate of Abandonment is issued under this section.

Liability for rehabilitation

171(4)      Notwithstanding the issuance of a Certificate of Abandonment under this section, the holder of a licence or permit in respect of an abandoned well or oil and gas facility is liable for the costs of any repair or rehabilitation required, within six years from the day of the issuance of the Certificate of Abandonment of the site, in respect of

(a) the site of the abandoned well or oil and gas facility, as a result of the operation or abandonment of the well or oil and gas facility; and

(b) any land or ground water contaminated or property damaged as a result of the activities of the operator at the site of the abandoned well or oil and gas facility.

No waiver of The Surface Rights Act

171(5)      The issuance of a Certificate of Abandonment under this section does not affect any application of The Surface Rights Act to the holder of a licence or permit in respect of, or to the operation or abandonment of, the well or oil and gas facility.

ABANDONMENT FUND

Prescribed non-refundable levy

172(1)      The Lieutenant Governor in Council may prescribe a performance security in the form of a non-refundable levy

(a) on each licence or permit issued and for which a performance security is required under this Act; or

(b) payable annually in respect of a well or oil and gas facility that, in the opinion of the director, is inactive or not being used for the purpose for which it was drilled or constructed.

Payment of levy

172(2)      The applicant for or holder of a licence or permit shall, in accordance with the regulations, pay the levy prescribed under subsection (1).

Abandonment Fund Reserve Account

172(3)      The Minister of Finance shall deposit amounts paid under this section or under subsection 170(2), 184(4) or 184(7), and interest earned on those amounts, in an account to be known as the "Abandonment Fund Reserve Account" established under the Consolidated Fund.

Authority to pay

172(4)      The minister may

(a) authorize the director to enter into agreements for and on behalf of the government for the purpose of subsection 182(1) (seizure);

(b) make an expenditure from the Abandonment Fund Reserve Account for the purpose of subsection 184(4) (cost of seizure);

(c) make an expenditure from the Abandonment Fund Reserve Account for the rehabilitation of the site of a spill or an abandoned well or oil and gas facility; or

(d) make an expenditure from the Abandonment Fund Reserve Account to defray costs arising in relation to any adverse impact on property or the environment resulting or that might result, in the opinion of the minister, from a well, oil and gas facility, or geophysical operation.

Expenditure commitment not to lapse

172(5)      Notwithstanding any Act of the Legislature to the contrary, an expenditure commitment under subsection (4) does not lapse at the close of the fiscal year in which the commitment is made.

Recovery of expenditure from reserve account

172(6)      An expenditure made from the Abandonment Fund Reserve Account in respect of a geophysical operation, well or oil and gas facility

(a) is a debt due to the Crown by the holder of the licence or permit, as the case may be, issued in respect of the geophysical operation, well or oil and gas facility; and

(b) is recoverable under Part 17.

PART 15

ENFORCEMENT

Definitions

173         In this Part,

"shut down notice" means a notice under section 176 or 180; (« avis de suspension des travaux »)

"shut down order" means an order under section 176 or 180, or a notification under section 177. (« arrêté de suspension des travaux » ou « ordre de suspension des travaux »)

Notice of non-compliance

174         Where an inspector has reasonable grounds to believe that the operator of a well or oil and gas facility is not in compliance with this Act or an order, licence or permit issued under this Act in respect of the well or oil and gas facility, the inspector may serve notice of the non-compliance on the operator and may in the notice order the operator to remedy the non-compliance within a period of time specified in the notice.

S.M. 1996, c. 27, s. 21.

SHUT DOWN

Application of sections 176 to 179

175         Sections 176 to 179 do not apply to the holder of a pipeline construction permit, pipeline operating licence, storage permit or gas plant permit issued under this Act.

Shut down notice re well or oil and gas facility

176(1)      Where the operator of a well or oil and gas facility fails to comply with a notice of non-compliance given under section 174, the director may, on expiration of the time provided for remedy in the notice of non-compliance, serve notice on the operator that the director may issue a shut down order in respect of the well or oil and gas facility if the non-compliance is not remedied in accordance with the shut down notice.

Content of shut down notice

176(2)      In a shut down notice under subsection (1), the director shall

(a) set out the manner in which the operator is not in compliance with this Act or a licence or permit issued under this Act, and the remedy required for the operator to comply with this Act, licence or permit; and

(b) specify a period of time of not less than 10 days from the day the shut down notice is served on the operator for the operator to remedy the non-compliance.

Shut down order

176(3)      Where the operator of a well or oil and gas facility fails to comply with a shut down notice, the director may serve on the operator a shut down order directing the operator to shut down the operations of the well or oil and gas facility, and setting out the remedy required for the operator to comply with this Act.

Emergency shut down of well or facility

177(1)      Notwithstanding sections 174 and 176, where an inspector considers that the operation of a well or oil and gas facility is an imminent threat to life, health, the environment or property, the inspector may take such action as the inspector considers necessary or advisable, and where the operator is not available, the inspector may shut down the well or oil and gas facility in the name of the director.

Inspector to notify operator and director

177(2)      Where an inspector shuts down a well or oil and gas facility under subsection (1), the inspector shall as soon as practicable notify the director and the operator of the emergency, the action taken and the remedy required to deal with the emergency.

Notification constitutes shut down order

177(3)      For the purpose of this Act, notification by an inspector to an operator under subsection (2) is deemed to be a shut down order.

Shut down of geophysical operations

177(4)      Where an inspector has reasonable grounds to believe that a geophysical operation is not in compliance with this Act or a term or condition of the geophysical licence, the inspector may take such action as the inspector considers necessary or advisable including issuing, subject to the approval of the director, a shut down order to the operator of the geophysical operation.

Authorization to resume operation

178         The operator of a well, oil and gas facility, or geophysical operation in respect of which a shut down order is issued under section 176 or 177 shall not resume operations until the non-compliance is remedied in accordance with the shut down order and the director serves the operator with a notice of cancellation of the shut down order.

Appeal of shut down order to minister

179(1)      An operator to whom a shut down order is issued under section 176 or 177 may, in accordance with the regulations, appeal the shut down order to the minister.

Powers of the minister on appeal

179(2)      In an appeal under subsection (1), the minister may confirm, revoke or vary the shut down order, subject to such terms and conditions as the minister considers necessary or advisable.

Appeal does not stay shut down order

179(3)      A shut down order remains in force while an appeal under this section is pending.

Definitions

180(1)      In this section,

"licensee" means the holder of a pipeline operating licence issued under this Act.

"permittee" means the holder of a pipeline construction permit, storage permit or gas plant permit issued under this Act;

Shut down notice re pipeline, storage reservoir

180(2)      Where a licensee or permittee fails to comply with a notice of non-compliance given under section 174, the minister may, on expiration of the time provided for remedy in the notice of non-compliance, serve notice on the licensee or permittee that the minister may issue a shut down order in respect of the pipeline or storage reservoir if the non-compliance is not remedied in accordance with the shut down notice.

Content of shut down notice

180(3)      In a shut down notice issued under subsection (2), the minister shall

(a) set out the manner in which the licensee or permittee is not in compliance with this Act or the licence or permit, and the remedy required for the licensee or permittee to comply with this Act or the licence or permit; and

(b) specify a period of time of not less than 10 days from the day the shut down notice is served on the licensee or permittee for the licensee or permittee to remedy the non-compliance.

Shut down order

180(4)      Where a licensee or permittee fails to comply with a shut down notice, the minister may serve on the licensee or permittee a shut down order directing the licensee or permittee to shut down the construction or operation of the pipeline, storage reservoir or gas plant.

Emergency shut down of pipeline, storage reservoir

180(5)      Notwithstanding the other provisions of this section, where an inspector considers that the operation of a pipeline, storage reservoir or gas plant is an imminent threat to life, health, the environment or property, the inspector may take such action as the inspector considers necessary or advisable, including issuing a shut down order to the operator of the pipeline, storage reservoir or gas plant in the name of the minister.

Director to notify minister

180(6)      Where an inspector takes remedial action or issues a shut down order under subsection (5), the director shall as soon as practicable notify the minister.

Authorization to resume operations

180(7)      Where a shut down order is issued under this section, the licensee or permittee shall not resume operations under the licence or permit until the non-compliance is remedied in accordance with the shut down order and the minister serves the licensee or permittee with a notice of cancellation of the shut down order.

Shut down order suspends rights

181(1)      The rights granted under this Act to an operator, licensee or permittee are suspended from the time a shut down order is served on the operator, licensee or permittee.

Removal of equipment after shut down order

181(2)      Where a shut down order is made in respect of a well or oil and gas facility, no person shall remove equipment from the site of the well or oil and gas facility without the prior written approval of the director.

SEIZURE

Seizure on failure to comply

182(1)      Where the operator of a well or oil and gas facility fails to comply with a shut down order, the minister may by order, on the expiration of the time specified in the shut down order, authorize the director, after the director gives notice of not less than 30 days to the operator, to seize and take over the management and control of the well or oil and gas facility for such period of time, and to take such steps and employ such persons and equipment, as the director considers necessary or advisable for one or more of the following purposes:

(a) to carry out the remedial measures set out in the shut down notice;

(b) subject to this section, to dispose of oil and gas from the well or oil and gas facility;

(c) to cause the well or oil and gas facility to be sold, in accordance with the regulations;

(d) to repair, partially plug, or abandon a well;

(e) to sell the equipment used to operate the well or oil and gas facility;

(f) to clean up and rehabilitate the site of the well or oil and gas facility and any other land or ground water contaminated by activities related to the well or oil and gas facility, and take action under subsection 119(2) in respect of any spill.

Director to supervise seized well or facility

182(2)      Where the director takes over management and control of a well or an oil and gas facility under subsection (1), the officers, employees, contractors or agents of the operator of the well or oil and gas facility shall, for as long as the director continues to manage and control the well or oil and gas facility, act under the general supervision of the director or an inspector acting on behalf of the director.

Payment of royalty

182(3)      Where the director disposes of oil and gas under clause (1)(b), the director shall, in accordance with the regulations, pay a royalty to the royalty owner.

Surface rights vest in Crown

183(1)      Where a well or oil and gas facility is seized under subsection 182(1), any surface rights held by the operator of the well or oil and gas facility are forfeited to and vested in the Crown.

Crown not subject to penalty

183(2)      Notwithstanding subsection (1), the Crown is not liable for any penalty, debt or other obligation incurred by the operator before the seizure.

Holder responsible for costs and expenses

184(1)      The holder of a licence or permit issued under this Act in respect of a well or oil and gas facility that is the subject of an order made under subsection 182(1) is liable to the Crown for the costs and expenses relating to proceedings or actions taken by the director under the order.

Recovery by Crown

184(2)      Subject to subsection (3), the Crown may recover costs and expenses for which the holder of a licence or permit is liable under subsection (1)

(a) after payment of any royalty under subsection 182(3), out of the proceeds realized from disposal of oil and gas under clause 182(1)(b);

(b) out of any proceeds realized from the sale of the well or oil and gas facility under clause 182(1)(c) or from the sale of equipment under clause 182(1)(e); or

(c) out of any performance deposit provided under Part 14 by the holder of the licence or permit.

Priority of purchase money security interest

184(3)      The rights of the Crown under subsection (2) are subject to the rights of a holder of a purchaser money security interest, as defined in The Personal Property Security Act, whose security interest in respect of any part of a well or oil and gas facility is perfected under that Act before the well or oil and gas facility is seized under subsection 182(1).

Costs are recoverable and a debt to Crown

184(4)      Where, after the recovery of a cost or expense under subsection (2), any cost or expense referred to in subsection (1) remains unpaid, the Crown may recover the cost or expense from the Abandonment Fund Reserve Account and the amount recovered is a debt of the holder of the licence or permit to the Crown.

Recovered money to be paid into fund

184(5)      A debt to the Crown under subsection (4) shall upon collection be paid into the Abandonment Fund Reserve Account.

Surplus proceeds

184(6)      Where any proceeds obtained under clause 182(1)(b), (c) or (e) remain after costs and expenses are recovered under subsection (2), the director shall pay out the remaining proceeds in the following order:

(a) to satisfy any liability of the holder of the licence or permit to the Crown under this Act or The Oil and Gas Production Tax Act in respect of the well or oil and gas facility;

(b) to satisfy a payment of money required under an order of the Court of Queen's Bench relating to the operation of the well or oil and gas facility;

(c) subject to subsection (7), to the holder of a licence or permit in respect of the well or oil and gas facility or to any person that the holder in writing directs that the proceeds be paid.

Where person cannot be found

184(7)      Where the holder of a licence or permit to whom proceeds are payable after the payment of costs and expenses under subsection (2) is not at the address for service provided under section 208, and the director is otherwise unable to locate the holder or any other person named by the holder to receive the proceeds, the director shall pay the proceeds into the Abandonment Fund Reserve Account.

Application for review of seizure order

185(1)      The operator of a well or oil and gas facility affected by an order of seizure made under subsection 182(1) may, within 15 days of the date of the order and in accordance with the regulations, make application to the minister for a review of the order.

Application does not stay seizure order

185(2)      An application under subsection (1) does not stay implementation of the order of seizure that is the subject of the review.

Review powers of minister

185(3)      On a review of an order of seizure under subsection (1), the minister may set aside, confirm or vary the order as the minister considers necessary or advisable.

Application for accounting

186         The operator of a well or oil and gas facility that is the subject of an order of seizure under subsection 182(1) may make application to the director for an accounting of the proceeds obtained and costs and expenses incurred under subsections 182(1) and 182(3), and the disposition of the proceeds under subsection 184(6), and the director shall provide an accounting to the operator as soon as is practicable.

Appeal of seizure order to Queen's Bench

187(1)      The holder of a licence or permit in respect of a well or oil and gas facility that is the subject of an order of seizure made under section 182 may appeal the order by making application to the Court of Queen's Bench within 30 days from the day the order is made, and a judge on hearing the appeal may confirm the order or direct the minister to vary or rescind the order, and may give such further directions in respect of the order of seizure, and the actions taken or to be taken under the order of seizure, as the judge considers fair and just.

Appeal does not stay seizure order

187(2)      An application to appeal under subsection (1) does not stay implementation of the order of seizure that is the subject of the application to appeal.

PART 16

ROYALTIES

Royalties reserved to Crown

188(1)      A royalty determined under this Act is reserved to the Crown in respect of any substance obtained or taken under a lease issued or agreement entered into under Part 4.

Subsection (1) is implied term and condition

188(2)      Subsection (1) constitutes a term and condition of a lease issued under Part 4 or an agreement made under section 67 (helium and oil shale) whether or not the text or substance of subsection (1) is set out in the lease or agreement.

L.G. in C. regulations

189(1)      The Lieutenant Governor in Council may make regulations respecting

(a) a method or methods for determining a royalty;

(b) the value of a royalty; or

(c) the manner of payment of a royalty.

Method may be varied by order

189(2)      Notwithstanding any regulation made under clause (1)(a), the Lieutenant Governor in Council may by order vary or waive the application of a method for determining a royalty under this Act.

Crown is owner of royalty

190         The Crown is the owner of its royalty in respect of oil and gas until the royalty is disposed of by or on behalf of the Crown.

Minister may recalculate Crown's royalty

191          The minister may recalculate a royalty of the Crown in respect of oil and gas, and any interest payable in respect of the royalty where, in the opinion of the minister, the royalty is incorrect owing to an error

(a) in calculation or in the application of this Act; or

(b) in any information required under this Act and used in the calculation of the royalty;

and the Crown is entitled to a royalty in the amount calculated by the minister.

PART 17

COLLECTION

Charges are recoverable as debt to Crown

192(1)      The amount of a royalty, levy, rent, fee or other charge payable by a person under this Act or The Oil and Gas Production Tax Act, together with interest payable in respect of the charge, is a debt due by the person to the Crown and is recoverable as such in a court of competent jurisdiction in the name of the Crown.

Deduction of debt owing to Crown

192(2)      Where a person entitled to a payment of money from the Crown under this Act, including a refund under subsection 193(2), is indebted to the Crown under this Act, the minister may apply all or part of the payment to the amount owing in satisfaction of the debt.

Interest on debt

193(1)      A debt to the Crown under this Act bears interest at the rate prescribed.

Interest on refund

193(2)      Where the minister refunds an amount received in overpayment of a royalty, levy, rent, fee or other charge the minister may add to the amount of the refund an amount for interest, at the rate prescribed under subsection (1).

Crown has lien for debt due

194(1)      The amount of a debt due from a person to the Crown under this Act binds any disposition, well or oil and gas facility owned by the person, and the Crown has a lien on the disposition, well or oil and gas facility in respect of the debt.

Priority of Crown's claim

194(2)      The claim of the Crown for a debt due under this Act has priority over any other charge or claim against a disposition, well or oil and gas facility in respect of which the debt is payable.

Minister may issue certificate of default

195(1)      Where default is made in payment of a royalty, levy, rent, fee or other charge payable under this Act and notice is served in accordance with section 209 on the person in default demanding immediate payment of the charge, the minister may, not sooner than 30 days after the notice is served on the person, issue a certificate stating the amount due and payable, including any interest, and the name of the person in default.

Filing of certificate in Queen's Bench

195(2)      A certificate issued under subsection (1) may be filed in the Court of Queen's Bench and when so filed becomes an order of the court and may be enforced as an order of the court.

Costs of filing recoverable

195(3)      The cost of filing a certificate under subsection (2) is recoverable in like manner as if the amount of the costs were included in the amount entered on the certificate.

PART 18

RECORDS AND REPORTS CONFIDENTIAL INFORMATION

RECORDS AND REPORTS

Operator and holder to keep information

196(1)      An operator or the holder of a licence or permit issued under this Act shall take samples, conduct tests, make surveys, keep records, reports, plans, maps, statements, and other information in accordance with the regulations.

Holder of well licence to provide data

196(2)      The holder of a well licence shall, in accordance with the regulations, provide the director with samples or data obtained by the holder in respect of the well or pool.

Holder of well licence to obtain information

196(3)      Subject to the regulations, the holder of a well licence shall, on the written request of the director, conduct such surveys and obtain such information about the well or the pool as the director considers necessary or advisable.

Purchaser, transporter to provide information

196(4)      A person who transports or processes oil and gas, or who intends within a prescribed period to purchase oil and gas, shall submit to the director any record, report or other information required under a regulation or requested by the director in writing.

Information to be produced on request

197         The director or an inspector may, at any reasonable time request a person who is required under this Act to keep records, reports or other information to produce some or all of the information and the person shall

(a) produce the information within the time specified in the request; and

(b) allow the director or inspector to take possession of the information for such time as is required to make a copy of it.

CONFIDENTIAL INFORMATION

Information is confidential

198(1)      Unless otherwise provided in this Act, a record, report, sample or other information required to be submitted under this Act shall be held on a confidential basis in such manner and for such period of time as may be prescribed by regulation.

Information with application

198(2)      Unless otherwise ordered by the minister, information that is provided in support of an application made under this Act is not confidential information under this Act.

Exception by written authorization

198(3)      Notwithstanding subsection (1), the director may allow a person access to a record, report, sample or other information submitted under this Act where the person submitting the information or sample authorizes the director in writing to allow access to the person requesting access.

PART 19

OFFENCES AND PENALTIES

Offences

199(1)      A person is guilty of an offence under this Act who

(a) conducts a geophysical operation or operates a well or oil and gas facility other than in accordance with this Act;

(b) obstructs or hinders, or attempts to obstruct or hinder, an inspector or other officer of the department in the exercise of a power or the performance of a duty under this Act;

(c) without lawful authority, tampers or interferes with a geophysical operation, well or oil and gas facility;

(d) fails to comply with an order made under this Act or a notice of non-compliance or shut down notice given under Part 15;

(e) as the holder of a licence or permit issued under this Act, fails to comply with the terms and conditions of the licence or permit;

(f) makes or signs a false or misleading statement or supplies false or misleading information to the minister, the director, an inspector or other officer of the department with respect to a matter or thing for which the statement or information is required under this Act;

(g) without lawful authority, tampers with, discards, destroys, removes or otherwise reduces the value of samples; or

(h) contravenes or fails to comply with a provision of this Act or the regulations.

Penalties

199(2)      Subject to subsection (3), a person who is guilty of an offence under subsection (l) is liable, on summary conviction,

(a) if an individual, to a fine of not more than $10,000; and

(b) if a corporation, to a fine of not more than $100,000.

Continuing offence

199(3)      Where in respect of clause (1)(d) or (e), a contravention or failure to comply continues for more than one day, the person is guilty of a separate offence for each day it continues.

Penalties for continuing offence

199(4)      In the case of a continuing offence under subsection (3), a person who is guilty of the offence is liable, for each day during which the offence continues,

(a) if an individual, to a fine of not more than $400; and

(b) if a corporation, to a fine of not more than $2,000.

Default of payment of fine

199(5)      In default of payment of a fine under subsection (2) or (4)

(a) by an individual, the individual is liable to imprisonment for a term not exceeding six months; and

(b) by a corporation, section 10 (recovery of penalties) of The Summary Convictions Act applies to the corporation.

Order to comply

199(6)      Where a person is convicted of an offence under subsection (1), the court may, in addition to any other penalty it may impose, order the person to comply with the provision of this Act that the person has contravened.

Corporate officers and directors

200(1)      Where a corporation commits an offence under subsection 199(1), an officer, director, employee or agent of the corporation who directs, authorizes, assents to, acquiesces in or participates in the commission of the offence is a party to and is guilty of the offence and is liable on summary conviction to the punishment provided for the offence, whether or not the corporation is prosecuted or convicted.

Liability of corporation not affected

200(2)      Nothing in subsection (1) affects the liability of a corporation that is convicted of an offence under subsection 199(1).

Constructive corporate acts

200(3)      In construing and enforcing this Act, an act, omission, neglect or failure of an officer, director, employee or agent of a corporation acting within the scope of responsibility or employment of the officer, director, employee or agent is an act, omission, neglect or failure of the corporation.

Further prosecution or civil action after conviction

201         The conviction of a person for an offence under this Act does not operate as a bar to further prosecution for a continued failure of the person to comply with this Act or to prosecution in a civil action for damages at the suit of a person who suffers damage, loss or injury as a consequence of the offence.

Three year limitation on prosecution

202         Notwithstanding any other Act of the Legislature, a prosecution in respect of an offence under this Act may not be instituted more than three years after the date on which the offence is committed.

Laying information

203         Any individual who has reasonable grounds to believe that a person has committed an offence under this Act may lay an information in respect of the alleged offence.

Director's certificate

204(1)      Subject to subsection (2), in a prosecution or other action or proceeding under this Act, a certificate purporting to be signed by the director certifying as to any matter of record in the director's office is admissible in evidence without proof of the director's appointment, authority or signature.

Reasonable notice to other party

204(2)      A party to a prosecution or other proceeding under this Act may not produce a certificate under subsection (1) in evidence against a person unless the party has, before commencement of the prosecution or other proceeding, given to the person reasonable notice of the intention of the party to produce the certificate as evidence, together with a copy of the certificate.

Cross-examination on certificate

204(3)      A person against whom a certificate under subsection (1) is produced in evidence in a prosecution or other proceeding under this Act, may, with leave of the court, require the attendance of the director or other officer of the department for purposes of cross-examination on the certificate.

Application for injunction

205         Where, contrary to this Act, a person obstructs the minister or an officer of the department in the exercise of a power or the performance of a duty under this Act, the minister may, without notice to the person, make application to a judge of the Court of Queen's Bench for an injunction against the person.

Remedies for enforcement

206          Where the minister has more than one remedy for the enforcement of a provision of this Act or for the payment of money payable under this Act, the minister may resort to one or more of the remedies from time to time as the minister considers appropriate, either concurrently or successively, until such time as the Act is complied with or the money, including costs and expenses, is paid or satisfied.

PART 20

GENERAL PROVISIONS

Corporation must be registered

207         No disposition, licence or permit shall be issued under this Act to a corporation unless the corporation is registered to transact business in Manitoba.

Applicant to provide address for service

208         A person who

(a) makes application for, or for the transfer of, a licence, permit or disposition;

(b) is a holder of, a licence, permit or disposition; or

(c) makes application to be registered, or is registered, as an oil and gas lease agent;

under this Act, shall provide to the registrar his or her address and, where the person is not a resident of Manitoba, the name and address of an agent who is a resident of Manitoba, for the purpose of serving documents on the person under this Act.

Service of notices and other documents

209(1)      Subject to the regulations, where a notice, order or other document is required by this Act to be given to or served on a person, service may be effected personally or, subject to confirmation of delivery by Canada Post, by delivery by mail to the address provided by the person under section 208.

Effective date of service by mail

209(2)      A document served by mail under subsection (1) is deemed to be served on the day that Canada Post confirms is the day on which the document is delivered to the address to which it is mailed.

Posting of document constitutes service

209(3)      Where service of a document under subsection (1) is not accepted or cannot for any reason be delivered pursuant to subsection (1) or (2), service of the document may be effected by posting it in an office of the branch for a period of not less than 15 days.

Service on agent

209(4)      Service on an agent whose name and address is provided by a person under section 208, constitutes service on the person that the agent represents.

Orders to be filed and served on persons affected

210(1)      Where the minister or director makes an order under this Act, the minister or director shall as soon as is practicable file a copy of the order with the registrar who shall serve a copy of the order on each person who is named in the order, or who made an application relating to the order or who made representations to the minister or director respecting the matter that is the subject of the order.

Effective date of order

210(2)      An order made under this Act is effective on and from the day it is made, unless the order provides for a later effective date.

Notification of acquisition of interest

211         A person who acquires an interest in a disposition or in the operation of a well or oil and gas facility shall, in accordance with the regulations, notify the registrar of the acquisition.

Right of entry not granted to land

212         A disposition, licence or permit issued under this Act does not convey a right of entry to the surface of the land to which the disposition, licence or permit relates.

Minister's power in ownership dispute

213(1)      Where a dispute arises as to the person entitled to receive a share of oil and gas produced from a spacing unit, the minister may by order direct that the operator of the spacing unit shall sell the share and out of the proceeds of the sale

(a) pay the costs and expenses allocated to production of the share of oil and gas in dispute; and

(b) pay any balance to the Minister of Finance to hold in trust until the dispute is resolved.

Money deemed paid according to arrangement

213(2)      Money paid to the Minister of Finance under subsection (1) is deemed, for the purpose of any contract or other arrangement relating to the share of the oil and gas, to be paid pursuant to the contract or arrangement.

Minister may authorize for missing royalty owner

214(1)      Subject to subsection (2), where the identity or whereabouts of a royalty owner in a tract or spacing unit cannot be ascertained, a person may, in accordance with the regulations, make application to the minister for an order authorizing, on behalf of the royalty owner, exploration for oil and gas in the tract or production of oil and gas from the spacing unit, and the minister may, if he or she is satisfied that the royalty owner cannot be identified or found, make such an order on such terms and conditions as the minister considers necessary or advisable, including the payment of consideration by the operator for the oil and gas rights.

Public notice of application

214(2)      Before making an order under subsection (1), the minister shall give such public notice of the application as the minister considers advisable or practicable.

Money payable to Minister of Finance

214(3)      Where the minister makes an order under subsection (1), the operator shall, in accordance with the regulations, pay any consideration required under the order and any royalty from the proceeds of the sale of the oil and gas to the Minister of Finance to be held in trust for the royalty owner.

Application to court re royalty

214(4)      Not later than five years after an order is made under subsection (1) because the identity of the royalty owner is not known, a person claiming to be the royalty owner of the tract or spacing unit in respect of which the order was made may make application to the Court of Queen's Bench for a declaration respecting the ownership of any consideration or royalty paid or payable in respect of the tract or spacing unit, and shall join the minister as a respondent party to the application.

Court to order money paid out

214(5)      Where the court makes a declaration of ownership under subsection (4), the court shall, subject to subsection (6), make an order directing the Minister of Finance to pay the money held in trust to the royalty owner.

Deduction for costs and services

214(6)      In an order made pursuant to an application under subsection (4), the court shall allow the Crown reasonable compensation for any costs incurred in respect of the application, and shall authorize the Minister of Finance to deduct the costs from the money held in trust.

Crown not liable for court costs

214(7)      The Crown is not liable for the costs of an applicant in respect of an application made under subsection (4).

Reversion of rights to the Crown

214(8)      Where the identity or whereabouts of the royalty owner is not determined, or an application is not made under subsection (4), within five years after the date of an order made under subsection (1), the title to or interest in the oil and gas rights in the tract or spacing unit revert to the Crown, and the operator may or, where oil and gas is being produced, shall make application for a lease of the oil and gas rights under Part 4.

Measurement of oil, gas or water

215         The measurement of oil, gas or water as required under this Act or The Oil and Gas Production Tax Act shall be done in accordance with the regulations.

Immunity for acts or omissions in good faith

216         No action or proceeding may be commenced against an officer, employee or agent of the department for any act done in good faith in the performance of a duty or in the exercise of a power under this Act, or for any neglect or default in the performance of the duty or the exercise of the power in good faith.

REGULATIONS

L.G. in C. regulations

217(1)      The Lieutenant Governor in Council may make regulations

(a) defining a word or expression used and not defined in this Act;

(b) enlarging or restricting the meaning of a word or expression used in this Act;

(c) respecting the delegation of powers and duties of the minister under this Act to specified officers of the department;

(d) respecting the form and content of applications that may be made under this Act;

(e) respecting the issuance, transfer or cancellation of licences, permits and certificates under this Act, including provision for terms and conditions applicable on the issuance or transfer of a licence, permit or certificate;

(f) prescribing fees and other charges required to be prescribed under this Act, or establishing a method for determining charges under this Act;

(g) respecting the disclosure and divestment of direct pecuniary interests under section 19;

(h) respecting performance deposits or levies payable as performance security under this Act and the management or use of the performance deposits or levies;

(i) respecting an approval or authorization of the minister, director or registrar or an inspector required under this Act, including any terms or conditions relating to the approval or authorization;

(j) respecting persons to whom documents are required to be given or served under this Act, and respecting the form and method of service of documents;

(k) prescribing rents payable under this Act;

(l) respecting assistance by government for the purpose of exploration for, and development and recovery of, oil and gas resources, and terms and conditions applicable in respect of the assistance;

(m) respecting the conduct of the business of the board;

(n) respecting offers to purchase dispositions, and forms and terms and conditions in respect of the issue, transfer, extension, renewal or termination of leases and exploration reservations;

(o) respecting the disposal of Crown oil and gas rights under section 66 (northern Manitoba);

(p) respecting the form and content of agreements relating to helium and oil shale under section 67;

(q) respecting the registration, term of registration, and discharge or cancellation of registration of

(i) dispositions,

(ii) transfers of dispositions or interests in dispositions,

(iii) assignments under the Bank Act (Canada),

(iv) instruments and orders,

(v) any person required to be registered under this Act, and

(vi) unit agreements, for the purpose of section 132;

(r) respecting the withdrawal of Crown oil and gas rights from eligibility for disposition;

(s) respecting royalties payable to the Crown under Part 16;

(t) respecting royalties payable under subsections 182(3) and 214(3);

(u) respecting consideration payable under subsection 214(3);

(v) prescribing rates of interest and the manner of calculating interest for the purposes of this Act;

(w) respecting the designation of areas within the province for the purpose of this Act;

(x) respecting the inspection of geophysical operations, wells and oil and gas facilities;

(y) respecting the prevention of waste in oil and gas operations;

(z) respecting measures to ensure the safety of geophysical operations or operations at wells or oil and gas facilities;

(aa) respecting the methods, guidelines and minimum standards to be used in respect of geophysical operations;

(bb) prescribing spacing units and the size and shape of spacing units, and respecting applications to vary spacing units or target areas under section 102;

(cc) prescribing target areas for wells and respecting penalties for completing wells outside target areas;

(dd) respecting the naming and registration of wells and batteries;

(ee) respecting the identifying, location, drilling, completing, recompleting, equipping, use, servicing, production, suspending the operation of, and abandoning of wells;

(ff) respecting the storage, handling, transportation, disposal and use of salt water, solid waste or liquid waste generated by drilling or completing a well or by operating a well or an oil and gas facility;

(gg) respecting the maximum permissible rate of production from wells or pools, including action to be taken when a licensee fails to comply with a maximum production rate, and the circumstances in which the minister may vary or remove a maximum permissible rate;

(hh) respecting disposal of salt water produced from a well;

(ii) respecting the pooling of separate interests in a spacing unit, including penalties for the purpose of subsection 126(5);

(jj) respecting the combination of separate interests into a unit operation;

(kk) respecting enhanced recovery;

(ll) respecting the designation, identification, location, design, equipping, construction, operation, maintenance and abandonment of oil and gas facilities, or any part of oil and gas facilities;

(mm) respecting equipment, and the installation of equipment, to prevent spills;

(nn) respecting the protection and rehabilitation of the environment;

(oo) respecting the duties of oil spill cooperatives under subsection 120(5);

(pp) respecting requirements for, and the making of, tests, logs, analyses and surveys and the taking of samples of any kind;

(qq) respecting the terms and conditions applicable to storage permits issued under Part 13, and the determination and payment of compensation payable to the Crown under section 166;

(rr) respecting the measurement of oil, gas, water or any other substance;

(ss) respecting the form and content of records, reports, plans, maps, samples, statements and other information required to be submitted under this Act;

(tt) respecting the confidentiality of records, reports, samples or other information required to be submitted under this Act, including prescribing periods of time for which the information is to be held on a confidential basis, and extensions of these periods;

(uu) respecting the shut down or seizure of a well or oil and gas facility under Part 15;

(vv) respecting the powers and duties of the director, registrar and inspectors;

(ww) respecting the conduct of inquiries under section 5;

(xx) respecting appeals to the minister under this Act;

(yy) prescribing anything that by this Act may be or is required to be prescribed;

(zz) respecting any other matter that is incidental or conducive to the attainment of the objects and purposes of this Act.

Adoption of code or standard by reference

217(2)      The Lieutenant Governor in Council may by regulation adopt by reference in whole or in part, with such changes as the Lieutenant Governor in Council considers necessary or advisable, a code or standard, or a regulation made by any other government in Canada or a recognized technical or professional organization, and may require compliance with the adopted code, standard or regulation.

S.M. 1995, c. 33, s. 16; S.M. 1996, c. 27, s. 21.

PART 21

TRANSITIONAL

Definition of "former Act"

218         In this Part, "former Act" means

(a) in sections 219 and 221, The Mines Act; and

(b) in sections 220 and 222, The Mines Act or The Pipe Line Act.

Crown oil and gas dispositions continued

219         A disposition issued under the former Act and in good standing immediately before the coming into force of this Act continues as a disposition issued under this Act and the provisions of this Act with respect to dispositions and the holders of dispositions apply to the disposition and to the holder of the disposition.

Licences and permits continued

220         A licence or a permit issued under the former Act and in good standing immediately before the coming into force of this Act continues as a licence or permit issued under this Act, and the provisions of this Act with respect to such a licence or permit apply to the licence or permit and to the licensee or permittee.

Approvals under former Act

221         Where an approval given under the former Act by the Lieutenant Governor in Council, the minister, The Oil and Natural Gas Conservation Board, the director or an inspector is in force immediately before the coming into force of this Act, the approval is deemed to have been given under this Act.

Orders by board or minister under former Act

222         An order made by the minister or The Oil and Natural Gas Conservation Board under the former Act is deemed to be an order made under this Act by the person who has the power or duty to make such an order under this Act.

Registration of oil and gas lease agent

223         A freehold oil and gas lease or an agreement to purchase an oil and gas interest, as that term is defined in section 76, entered into within 60 days of the coming into force of this Act continues to be valid and binding for the purpose of this Act notwithstanding any non-compliance with section 78 (registration as an oil and gas lease agent).

Lapse of registration under Real Property Act and Registry Act

224(1)      An instrument that is registered under The Real Property Act or The Registry Act against oil and gas rights held by the Crown lapses and has no force or effect one year after this Act comes into force.

Notice to be given within six months

224(2)      The registrar shall, in respect of an instrument referred to in subsection (1), not later than six months after this Act comes into force give notice to the person who registered the instrument, at the address for service provided in the instrument, of the following:

(a) the content of subsection (1); and

(b) the provisions of this Act respecting the registration of instruments.

District registrar and assurance fund not liable

224(3)      The district registrar, under The Real Property Act, and the assurance fund referred to in section 181 of that Act, are not liable to pay compensation to any person for any loss occasioned by the lapse of an instrument under this section.

S.M. 2013, c. 11, s. 76.

PART 22

CONSEQUENTIAL AMENDMENTS

225 to 239  

NOTE: These sections contained consequential amendments to other Acts, which amendments are now included in those Acts.

PART 23

REPEALS, CITATION AND COMING INTO FORCE

The Mines Act

C.C.S.M. c. M160 repealed

240         The Mines Act, R.S.M. 1987, Cap. M160, is repealed.

The Pipe Line Act

C.C.S.M. c. P70 repealed

241         The Pipe Line Act, R.S.M. 1987, Cap. P70, is repealed.

C.C.S.M. reference

242         This Act may be referred to as "The Oil and Gas Act" and cited as chapter O34 of the Continuing Consolidation of the Statutes of Manitoba.

Coming into force

243         This Act comes into force on a day fixed by proclamation.

NOTE:  S.M. 1993, c. 4 came into force by proclamation on July 1, 1994.