Tenure FAQ- Wells

A.  ROAD ALLOWANCES

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

A.  ROAD ALLOWANCES

Does my P&NG lease grant me the rights under the road allowance or do I only own 50 per cent 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 Crown Equity of the department of Energy
[Phone: 780-427-7749 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 metres from 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.

B.  WELLS

Who owns an abandoned wellbore?
Do I keep the rights to my wellbore even though my lease is cancelled and the well is not abandoned?
What approval is required from the department to use a vested Crown well? 
Why did I get a notice from the Energy Resources Conservation Board (ERCB) to abandon my well?
My lease is nearing expiry and I will be allowing it to expire. I have a water disposal well on the lease. Should I retain my P&NG Lease in order to keep my well?
How do I get approval to re-enter an abandoned well?
Do we need approval from the department to inject or dispose into undisposed Crown rights?
I have received an abandonment request but I own the shallow rights and want to use the well to produce from these rights. Is there anything I have to do or can I just proceed to use the well?
You granted me authorization to use a vested well and within the approval letter I was given two months to obtain a well licence. I am not going to make this deadline. What should I do?
If you receive two competing applications for use of a vested wellbore, how do you decide which one to authorize?
Do I require prior approval to drill a well and conduct operations (such as disposal/injection,water source, observation) in a zone where only one of the substances leased, either the Crown P&NG or Oil Sands rights?

B.  WELLS

Who owns an abandoned wellbore?

Normally the well licensee owns an abandoned wellbore unless the well has vested to the Crown. If the agreement that the well was drilled on, or the section of the land the well was drilled on, remains in an active agreement, then the well has not vested to the Crown, and you own the wellbore. If the agreement is cancelled or the section of land has been deleted from the active agreement, then the wellbore vests to the Crown pursuant to section 32 of the Mines and Minerals Act.

Do I keep the rights to my wellbore even though my lease is cancelled and the well is not abandoned?

As soon as your agreement was cancelled the well vested in the Crown. If the wellbore is classified at the time of cancellation as an injection or disposal well, the well still vests but you are automatically given authorization to use the wellbore for that purpose.

What approval is required from the deparment to use a vested Crown well?

When an agreement or portion of an agreement is cancelled, the well vests immediately to the Crown under Section 32 of the Mines and Minerals Act. The following table will help you determine which form or letter you need to submit based on the well status.

Why did I get a notice from the ERCB to abandon my well?

When Tenure cancels an agreement or deletes a section of land from an agreement that contains a well, the lessee would be advised that the wellbore can no longer be used. The well licensee is also advised. At the same time, Tenure advises the ERCB of this fact. Since you no longer hold an active agreement the wellbore vests to the Crown and the ERCB would then advise you of your options. One of them is to abandon the wellbore.

My lease is nearing expiry and I will be allowing it to expire. I have a water disposal well on the lease. Should I retain my P&NG Lease in order to keep my well?

When a lease is cancelled and it contains either a injection or a disposal well, you are automatically given authorization to use the wellbore for that purpose. You retain the rights to the wellbore as long as you continue to use it for those purposes. You will only need to abandon the well when you cease to use it for injection or disposal. Neither purpose requires you to retain your P & NG lease. 

How do I get approval to re-enter an abandoned well?

Who you should apply to for approval to re-enter an abandoned well depends on whether the well has vested to the Crown or not. If the P&NG Agreement has been cancelled, or the section that the well was drilled on has been deleted from the Agreement, then the well has vested in the Crown. You would need to contact the Department of Energy, Crown Equity [Fax: 780-422-0382] for permission to use the well. Information Letter 97-26 outlines the process, and there is a Re-entry Application Form to assist you in making this application. You must tell us what you wish to use the well for and you must indemnify the Crown. There is no cost to acquire the use of a well that has vested. If the well has not vested to the Crown you would then need to contact the well licensee.

Do we need approval from the department to inject or dispose into undisposed Crown rights?

Any use of Crown undisposed land requires prior approval from the department. You would be required to submit technical data, such as submit geological or engineering data, to the Crown to demonstrate that the proposed zone for disposal/injection is non-hydrocarbon bearing. If you intend to use a vested well, permission is also required to use the wellbore. You would also need to follow the Regulations of the ERCB.

I have received an abandonment request but I own the shallow rights and want to use the well to produce from these rights. Is there anything I have to do or can I just proceed to use the well?

One option on the abandonment form is to allow you to use the wellbore for another agreement than that which it was drilled on. You must fill out the form and fax it to the department. The department will then ensure that the well is linked to your existing document.

You granted me authorization to use a vested well and within the approval letter I was given two months to obtain a well licence. I am not going to make this deadline. What should I do?

If you can't meet the conditions set out in your approval letter you need to advise us of this prior to expiry, letting us know the circumstances. As there is no extension section in the Mines and Minerals Act for these type of approvals, you will need to re-apply and then we will grant you a new approval.

If you receive two competing applications for use of a vested wellbore, how do you decide which one to authorize?

If we received two applications almost at the same time, then both companies would be contacted to determine who holds the surface lease. The approval would then be granted to the holder of the surface lease, for without that lease, the wellbore can't be accessed. If neither hold the surface lease we would not grant authorization to either party until the situation was resolved.

Do I require prior approval to drill a well and conduct operations (such as disposal/injection, water source, observation) in a zone where only one of the substances is leased, either the Crown P&NG or Oil Sands rights?

No prior approval is required if the zone is leased as to one of the substances in which you wish to conduct operations. Note: Prior approval is required if the Crown rights are entirely undisposed. To request approval please complete and submit the form on our website.