Trespass - Road Allowances | Trespass - General

Trespass - Road Allowances

Does my P&NG lease grant me the rights under the road allowance or do I only own 50 percent of the road allowance?
Do I own the road allowance in my Unit Agreement?
How do we get approval to drill, test or produce in a Road Allowance?
What is the amount of buffer when applying for approval to access minerals from an undisposed Crown road allowance?
Is a company in trespass if their well terminated in unsurveyed road?

Does my P&NG lease grant me the rights under the road allowance or do I only own 50 percent of the road allowance?

In general road allowances are undisposed Crown land. Your P&NG lease or license does not include the rights to any road allowance that lies adjacent to the sections of land contained in your agreement. You can drill through a road allowance to reach mineral rights you do have but you cannot test or produce from any rights within the road allowance or terminate in the road allowance without prior consent from the department.

Do I own the road allowance in my Unit Agreement?

By policy only, road allowances within units are treated as part of the unit. Tract factors have already been negotiated for the unitized area and allow for the allocation of production and costs. The department allows you to access the road allowance to test or produce your unitized zones without permission. If it is not a unitized zone you will be entering, you would need to request prior approval from the department.

How do we get approval to drill, test or produce in a Road Allowance?

In order to use undisposed Crown land you must first request permission from the Well Administration and Undisposed Rights area of the department of Energy [Phone: 780-427-7425 or Fax: 780-422-0382]. Information Letter 2003-05 outlines the process. You will need to indemnify the Crown as well.

In order to help you determine when prior approval is required, click on the link to the illustrations that outline some of the common road allowance scenarios.

What is the amount of buffer when applying for approval to access minerals from an undisposed Crown road allowance?

What is being referred to as a "buffer" is merely a suggested distance criteria.  The Crown felt it was reasonable for a company to make application when planning to drill within a 40 metre distance from a road allowance. The "buffer" is not applicable to vertical wells.

The Crown suggested this distance to alleviate, for both industry and the Crown, the large number of unnecessary applications being submitted - some as much as 80-100 metresfrom the road allowance. 

Is a company in trespass if their well terminated in unsurveyed road?

Yes. There are theoretical roads that are statutory road allowances. Statutory road allowances are owned by the Crown whether they are surveyed or unsurveyed.

Trespass - General

If I drill a well up to 15 m past my leased rights, into undisposed Crown, is the well in trespass?
I hold the rights from below the base of the Belly River zone to the basement. The rights from surface to the base of the Belly River are undisposed Crown. Can I drill through the undisposed Crown rights to get to my leased rights?
The term of my lease has expired and I have not yet received final approval of my lease continuation. Can I put a well on production?
I hold the rights from surface to basement, except for the petroleum and natural gas in the Viking zone. What activities are permitted in the excepted rights?
The term of my lease has expired and I have not yet received final approval of my lease continuation. Can I put a well on production?
If my well produces over expiry of the term of my lease and I have not yet received confirmation of my continuation application, will I be in trespass?
I have purchased a lease from Company A. I have been informed by the Department of a trespass that occurred while Company A held the lease. Why is my company being charged with the trespass? Who is responsible for the trespass?
I think my company may have inadvertently trespassed into Crown undisposed rights in one of our wells. What do I do now?
I was just ready to drill a well on a section of land when I discovered that there was a small portion of undisposed Crown land within that section. Do I have to post this land for public sale or can I request a direct purchase?
Why do I have to shut my well in if the department informs me of a trespass? Can I continue to produce while the department determines the course of action to deal with the trespass?
A few months ago we were advised we were in trespass and told that the well information would have to be made public. Why?
If a trespass occurred before the $50,000.00 trespass penalty was instituted, are we still subject to the penalty?
Will the department waive the trespass penalty when a company has drilled a little bit over the 15m allowable?
Under what circumstances would the Crown waive the trespass penalty?
Will the department be lienient on a trespass if a company self-declares the trespass?
Does the Crown use the "Total Depth" or "True Vertical Depth" to calculate overhole trespass?
Can a company test for gas holding just the oil spacing?
A company has applied for a Section 16 continuation on a P&NG Lease expiring May 20, 2005. The qualifying well rig released April 29, 2005. They have not received a response from the Crown yet confirming their application. Can they proceed with completion operations on their well before they receive the Crown’s confirmation?· If a company has a producing well at time of expiry and expects to receive a section 15 continuation, can they continue working?
If a company has a producing well at time of expiry and expects to receive a section 15 continuation, can they continue working?
Can a company leave a recorder down the well after lease expiry?
Does the Crown use the "total depth" or "true vertical depth" to calculate trespass?
Can a company appeal the Crown’s decision?
What technical data do I need to send to the department upon self-declaring a trespass?

If I drill a well up to 15 m past my leased rights, into undisposed Crown, is the well in trespass?

A company is allowed to drill a maximum of 15 m beyond the rights the agreement holds, in accordance with the Energy Resources Conservation Board (ERCB) Guide 56. This is to allow for the setting of logging tools, so that information can be obtained down to the base of the leased zones. You are not allowed to produce from the overhole portion of the wellbore.

I hold the rights from below the base of the Belly River zone to the basement. The rights from surface to the base of the Belly River are undisposed Crown. Can I drill through the undisposed Crown rights to get to my leased rights?

You are allowed to drill through the undisposed Crown rights to get to your leased rights. Logging and taking samples as required by the ERCB is permitted. You can not test, terminate in or produce from the undisposed Crown rights.

I hold the rights from surface to basement, except for the petroleum and natural gas in the Viking zone. What activities are permitted in the excepted rights?

You are allowed to drill through the excepted rights to get to your lease. Logging and taking samples as required by the ERCB is permitted. You can not test, terminate or produce from the excepted rights.

You need to know how the excepted rights are defined in comparison to your leased rights. Trespass can occur by misinterpreting a Deeper Rights Reversion Zone Designation (DRRZD) or a Zone Designation (ZD). Information Letter 98-14 outlines how to interpret a DRRZD versus a ZD.

The term of my lease has expired and I have not yet received final approval of my lease continuation. Can I put a well on production?

No. You can not commence any activities after the expiry of the term of your lease until you receive confirmation of lease continuation. You are not guaranteed continuation of these rights based on your application. Any activities such as drilling, testing or placing a well on production after expiry may result in trespass.

If my well produces over expiry of the term of my lease and I have not yet received confirmation of my continuation application, will I be in trespass?

No. If you are producing over expiry, you will be granted continuation to the base of your producing zone. However, a company must be very sure of their circumstances before continuing to work. Such things as a company thinking they have regular spacing, when they actually have reduced spacing, has led a company into trespass.

I have purchased a lease from Company A. I have been informed by the Department of a trespass that occurred while Company A held the lease. Why is my company being charged with the trespass? Who is responsible for the trespass?

The current lease holder is responsible for the trespass. When a company purchases a lease from another company, that purchaser assumes all liability that goes along with the rights. (Buyer beware.)

I think my company may have inadvertently trespassed into Crown undisposed rights in one of our wells. What do I do now?

As soon as you become aware of the trespass and if you are still producing from the undisposed rights you should immediately shut-in the well. You then need to contact the Manager of Well Administration and Undisposed Rights area, Grace Matias
[Phone: 780-422-9395 or Fax: 780-422-0382] to advise of the circumstances. She will request information from you and then determine how you should proceed.

In cases of trespass, you are not allowed to profit from any production and will be required to compensate the department for the production, though in some cases you are allowed to deduct costs. You cannot re-commence production until you obtain the rights legally, usually through the public sales process. All information acquired through trespass must also be made public through the ERCB. The department will also ask you to examine your business practices to ensure that there will not be any re-occurrences.

I was just ready to drill a well on a section of land when I discovered that there was a small portion of undisposed Crown land within that section. Do I have to post this land for public sale or can I request a direct purchase?

Private sales of rights are used in very restrictive circumstances only. If the undisposed Crown land is less than 50% of the spacing unit, you should contact the department, P&NG Sales [Phone: 780-427-7425 or Fax: 780-422-1123] to discuss a direct purchase. Information Letters 97-14 and 2001-9 will provide you with the information you need regarding direct purchases.

Why do I have to shut my well in if the department informs me of a trespass? Can I continue to produce while the department determines the course of action to deal with the trespass?

Trespass means you are obtaining production from rights you do not legally hold. Since you may not profit from this action, you will be required to repay the Crown on any production. By shutting in the well, you are prevented from continuing to profit from an illegal action. You must immediately shut-in the well and you can not start producing again until you have legally obtained the rights.

A few months ago we were advised we were in trespass and told that the well information would have to be made public. Why?

Information you have the right to obtain through a P & NG lease or licence provides you with a competitive advantage when you participate at a sale. Information you obtained in trespass provides you with an unfair advantage, as you should not be in possession of the information. In order to maintain the integrity of the sales process all information obtained in trespass must be made public. Any postings will be withdrawn from the sale until we are confident that all information you obtained in trespass has been made public. This is done by forwarding it to the ERCB, along with a letter advising them to make the information public immediately.

If a trespass occurred before the $50,000.00 trespass penalty was instituted, are we still subject to the penalty?

No. The penalty is applied when a trespass is occurred on or after September 1, 2004.

Will the department waive the trespass penalty when a company has drilled a little bit over the 15m allowable?

We are very firm on the 15m. This is the amount allowable, for the purpose of setting logging tools and casing only, under the ERCB’s Guide 56. When a company drills past the 15m, into undisposed rights, it could provide them with an unfair advantage at the land sale. It could also be a safety issue. It is expected that a company know where the base of their rights are and then add 15m.

Under what circumstances would the crown waive the trespass penalty?

The Crown may waive the penalty in exceptional circumstances where our technical staff agree that a company was unable to identify the base of their agreement due to complex geology. A company is always given the opportunity to provide data to substantiate their actions. The department normally requests data such as wells logs (strip/wireline) and daily drilling reports for review.

Will the department be lienient on a trespass if a company self-declares the trespass?

No, There is no difference to the department’s processes whether a company self-declares a trespass or whether the department identifies the trespass. However, the Energy Resources Conservation Board does make allowances when a company self-declares.

Does the crown use the "total depth" or "true vertical depth" to calculate overhole trespass?

All references to overhole are in the Energy Resources Conservation Board's regulations/guides. The ERCB uses the term "Total Depth" (Guides 56 & 59). This is also what the department of Energy refer to as the "measured depth". The total depth, not the true vertical depth is what is used for reporting and what the ERCB looks at.

Can a company test for gas holding just the oil spacing?

A company can test, but must be in accordance with the testing criteria outlined in ERCB Guide 60. The Board considers testing as production. A company would be in contravention of the ERCB's Oil and Gas Conservation Regulation if they produced without common ownership of a spacing unit.

In addition, the DOE may ask for compensation for the unauthorized taking of production.

A company has applied for a Section 16 continuation on a P&NG Lease expiring May 20, 2005. The qualifying well rig released April 29, 2005. They have not received a response from the Crown yet confirming their application. Can they proceed with Completion operations on their well before they receive the Crown’s confirmation?

If a "qualifying" well is drilled pursuant to Section 16 of the Regulation, a company can continue to work on the spacing unit where the qualifying well is located. A company cannot spud any other wells in another spacing unit and must select the spacing unit as one of the five allowable sections for continuation to avoid trespass.

If a company has a producing well at time of expiry and expects to receive a section 15 continuation, can they continue working?

Yes, BUT only on the spacing unit. A company must be very careful to ensure they know what rights will be continued and know whether they have regular or reduced spacing.

Can a company leave a recorder down the well after lease expiry?

The recorder should be removed by midnight on expiry unless the well is a "qualifying" well under "Section 16".

Does the crown use the "total depth" or "true vertical depth" to calculate trespass?

All references to overhole are in the Energy Resources Conservation Board's regulations/guides. The ERCB uses the term "Total Depth" (Guides 56 & 59). This is also what the department of Energy refer to as the "measured depth". The total depth, not the true vertical depth is what is used for reporting and what the ERCB looks at.

Can a company appeal the crown’s decision?

A company is always given the opportunity to provide data to substantiate their actions. The department normally requests data such as wells logs (strip/wireline) and daily drilling reports for review.

What technical data do I need to send to the department upon self-declaring a trespass?

Letter identifying well(s) in Trespass.

Strip logs
Wireline logs
Completion Report, if well tested in over hole
Flow Test Data, if well tested in over hole
Directional Survey, if it is a directional or horizontal well
Drilling Prognosis as prepared for well site geologist
Geologist’s morning report
Daily Drilling Reports
and any other pertinent information that may be useful