Alberta Energy:

When should I come up for a meeting with you, and when should I just mail or courier my application?
How soon will I get a reply to my continuation application?
How far in advance of expiry can I submit an application?
Can I fax my application?
How can I be sure that you have received my application?
What happens to my application after I have submitted it?
If you don't consider that our agreement is productive, we'd like to know right away so that we can drill a well to prove it up before expiry. How can we get a rush answer on our application?
We have reviewed our expiring agreement, and have decided not to apply for continuation. Should we notify you that we are not applying?
What happens if my application is late, or if I omit some of the lands or rights in the agreement from my application?
Should I enclose the rent for the agreement with my application?
I have an agreement that is about to expire; I have drilled a shallow well on it and I have farmed out the deeper rights to ABC Oil and Gas. Can we each submit our own application for continuation?

A. CONTINUATION MAKING AN APPLICATION

When should I come up for a meeting with you, and when should I just mail or courier my application?

We try to keep the number of meetings to a minimum, because they are very time-consuming compared to the normal review of an application. However, if your application is very complicated, or of particular importance to your company, or even if it simply involves a very large amount of data, then you are welcome to come to Edmonton and present your application in person. You can usually expect to receive a reply within five business days after the meeting.

Meetings are also important learning tools if you are unfamiliar with the continuation process. You can see firsthand how the geologist looks at the information you submit, and what other information might be needed.

How soon will I get a reply to my continuation application?

It takes approximately two months for us to respond to an application. This can be reduced if you request an Advance Ruling, or it can take longer if you fail to submit all the relevant information with your initial application.

How far in advance of expiry can I submit an application?

You may apply for continuation up to a year before expiry or, if you need to make plans for more than one drilling season, at any time during the primary term of the lease or the intermediate term of the licence. You will need to ask for the Minister's consent to apply more than a year before expiry, but consent will not be withheld if you have a valid need to apply early.

Can I fax my application?

Yes, you can fax it to us at 780-422-1123. If you are sending us an application without any supporting data then please do not mail the original to us as well - that just adds to our workload and delays our response to you. If you are sending us a package of information, and are faxing the form to us to ensure that you don't miss the expiry date, be sure to check the appropriate box in Part 1 of the form.

How can I be sure that you have received my application?

If you require confirmation that an application has been received in the Department, you must submit the application in a traceable manner - eg: the application may be delivered to the Department of Energy Office in Calgary and a copy stamped for your records. The office is located on the third floor of Monenco Place, 801 - 6th Avenue South West in Calgary, phone 403-297-6324. When you fax an application, keep the record sheet from your fax in case you need to confirm the date fax was sent

Telephone enquiries asking us to confirm receipt of an application, disrupt the application review process and cause delays, and should be avoided except in case of emergency.

What happens to my application after I have submitted it?

All applications go through the same basic process:

Administrative review- your application is attached to the appropriate file and is reviewed:
- to determine whether a geological review is necessary;
- to determine whether any essential information has not been included (such as confidential well data);
- to ensure you are applying for lands and rights within your lease;
- to ensure that you are eligible to apply (ie: you are either the designated representative, or you have been authorized to apply by the designated representative)
Geological review- if necessary, the file and application are forwarded to our Geology team. A geologist determines the extent of productivity or potential productivity, based on the information provided with the application, in accordance with the Department's current policies. Refer to the "Technical Guidelines for Continuation" for more information on the technical review of an application.
Preparation of response- the file and application are returned to Continuations. An administrator reviews the application and the geologist's advice, ensures that current administrative business rules have been complied with, and prepares a letter to the applicant and/or the designated representative. This letter may be an offer, if we disagree with your application, or it may be a confirmation of continuation if we are continuing the agreement in accordance with your application.
Request for review of decision- if we have disagreed with your application, the letter that we send you gives you one month to ask for a review of the decision, or until the expiry date of the agreement, whichever is the greater. If you submit a request for review during that time, the original application is re-examined together with the new information to determine whether there are grounds for a different decision.
Final confirmation of continuation or expiry- if the agreement has already expired, the Department's letter addressing the request for review, is final. If the agreement has not yet expired, you have until midnight on the expiry date to conduct further operations to prove that the agreement is productive and to submit an application.

If you don't consider that our agreement is productive, we'd like to know right away so that we can drill a well to prove it up before expiry. How can we get a rush answer on our application?

The only guaranteed way of getting an answer in time is to apply for an Advance Ruling. To do this, you must apply at least two months before expiry, and you must tell us that you want an Advance Ruling by checking Box 4 in Part 1 of the Application Form. We will then guarantee you a response within one month of receiving your application.

If you have less than two months left before the agreement expires, and you still need an answer urgently, we will try to respond as quickly as possible but we cannot guarantee a response before expiry. This type of request disrupts our workflow and displaces other requests that may have been received earlier, and we discourage them unless they are absolutely necessary.

We have reviewed our expiring agreement, and have decided not to apply for continuation. Should we notify you that we are not applying?

We would prefer that you didn't notify us. If we don't receive an application we assume that you are allowing the agreement to expire; we review it to ensure that you have not overlooked any producing wells, units, gas storage agreements, payment of offset compensation, or wells drilled through the expiry of the agreement. Receiving a letter from you just adds another layer of administration to the process.

What happens if my application is late, or if I omit some of the lands or rights in the agreement from my application?

An application for continuation must be received in the Department (either the Edmonton or the Calgary office) on or before the expiry date in order to be considered a valid application. If it is submitted even one day late it will not be accepted. The only exception to this rule is when the expiry date falls on a weekend or a statutory holiday, in which case the application may be submitted on the first working day after the expiry date.

If you omit some of the lands or rights from your application, then you have not submitted an application with respect to those lands or rights.

Once the agreement has expired, continuation pursuant to Section 15(1)(a), (b), (c) or (d) may be available, but you no longer have any right to continuation pursuant to Section 15(1)(e). The only spacing units that will be eligible for continuation will be those that contain a producing/productive well (i.e a good gas test) or a well that was drilling at expiry and those that are subject to a unit, a gas storage agreement or a payment of offset compensation. A late application fee of $5,000.00 will be required to continue any lands or rights not applied for, except where lands are subject to a unit, there is no fee.

Should I enclose the rent for the agreement with my application?

It is not necessary to enclose the rent with your continuation application. When we have reviewed your application and determined how much rent is required for the lands that will be continued, we will include a request for the payment of the rent in our letter to you. This is much simpler for us, administratively, than refunding part of your rental payment if some of the lands in your application are not continued.

I have an agreement that is about to expire; I have drilled a shallow well on it and I have farmed out the deeper rights to ABC Oil and Gas. Can we each submit our own application for continuation?

The Department will only accept one application per agreement. This means that you and ABC will have to decide which of you will make the application, and ensure that it addresses all lands and zones that are of importance to you both.

If you make the application, all correspondence will be sent to you (assuming you are the designated representative for the agreement). If you authorize ABC to make the application, any interim correspondence (such as an offer of continuation pursuant to Section 17) will be sent to them but the final letter conveying the continuation decision will be sent to you, with a copy to them.

If ABC is willing for you to see their data, then you can simply submit it with your application. However, if they are not prepared to share it with you, they can submit it separately provided that they enclose an authorization form, authorizing us to use their data in support of your application. You must also authorize us to use that data (Box 3 in Part 3) of the Continuation Application Form. Only when we have written authorization from both you and the other company will we use their data to support your application.

We will not share any of ABC's information with you, nor will we share your data with them.

B. CONTINUATION APPLICATION FORM

Where can I get a copy of the Continuation Application Form?

The form and the accompanying Guide are available on our web site:

Continuation Guides and Forms

C. SUBMITTING DATA

I want to to apply for continuation based on a producing well. What information should I submit with the application?

To continue a single spacing unit on the basis of a producing well located in that spacing unit, you need to send a copy of the well log, indicating the formation tops, all tested and perforated intervals, along with recent production data, if there is any available.

If you want to continue lands outside the drilled spacing unit, you will have to supply mapping to show that it is productive. You should include cross-section s to support the mapping, a geological discussion of the pool, and any other supporting data you may have.

The Department and the Energy Resources Conservation Board (ERCB) are both part of the Energy Ministry, so why do I have to submit confidential data to you when I've already submitted it to the ERCB?

Although both organizations are part of the same ministry, we have different mandates. The ERCB is charged with the regulation of drilling and production, and with the collection and dissemination of information, while the Department manages the province's land tenure system.

If your continuation application is based on work that was conducted recently, (drilling, completion, re-entry, etc), you should ensure that the information is submitted promptly to the ERCB so that their records can be updated. We verify all well data against ERCB data, so if their records are not current, our response to your application may be delayed.

Will you return my technical data when you're finished with it?

If you submit seismic data and ask for it to be returned, (check Box 6 in Part 3 of the application Form). We will send it back to you after your continuation is resolved. Otherwise, we keep all technical material that is submitted to us in support of an application.

Will you allow anyone else to look at my data?

No, we don't share your information with anyone else, and we have rigorous procedures in place to ensure that it is not accidentally used in support of anyone else's application. We will not even use some of your previously submitted data in support of a current application, unless you specifically indicate on your application form that you wish us to do so. (Check Box 3 in Part 3).

Why can't agreements be continued on the basis of ERCB G-Orders, without technical data?

The Energy Resources Conservation Board (ERCB) issues G-Orders to define geological pools. Once issued, they may be enlarged on the basis of later discoveries, but they are never reduced to reflect the effects of drainage and depletion. Consequently, a G-Order may represent the current size and configuration of a pool very well, or it may be badly out of date and show a pool outline that is much larger than the pool actually is today. You may use a G-Order as part of the suite of data you submit to us, but you will also be required to submit other information to support it.

I applied for continuation of an agreement and you didn't approve all of the lands I requested. I don't have any more information, but I have been contacted by XYZ Oil and Gas, and they are willing to submit some of their data to support my application. Can we arrange for them to provide you with their information?

We won't accept a Request for Review from anyone other that yourself, on your application, due to its confidential nature. However, you can submit a Request for Review and arrange for us to look at someone else's data by following the same process as outlined in the previous question.

Can we refer to technical data we previously submitted on another application from our company?

Yes, the DOE will only cross-reference geological data upon request. You must check Box 3, Part 3 (Options) of the Continuation Application form and specify the agreement number and the date of the previously submitted application/data. Please re-submit an updated copy of the geological discussion to capture any changes that may have occurred since the previous submission.

D. SECTION 15: INDEFINITE CONTINUATION

If my agreement is continued under Section 15, will it be reviewed periodically for productivity, or will it remain continued until I surrender it?

It will not be reviewed at set intervals, but we will look at it if something occurs to suggest that it is no longer productive. If that should happen, you will receive a notice pursuant to Section 18.

E. SECTION 16: CONTINUATION DUE TO RECENT OR CURRENT DRILLING

If we are drilling a well over expiry do we need to apply for continuation?

Yes. You need to apply for continuation, pursuant to Section 16 otherwise you will be in trespass.

Under the Section 16 Regulations how much land can we apply to continue without submitting technical data?

Without technical data, you may apply for:

up to five Sections of land in a single agreement, or in any number of agreements provided the five Sections being selected will be evaluated by the qualifying well and touch or corner the Section containing the qualifying well or
multiple agreements which comprise the one Section containing the qualifying well.

When do we need to submit technical data for a Section 16 continuation?

If you apply for one or more agreement(s) for more than five Sections, using the same qualifying well. In this case, all lands or agreements using the same qualifying well must be submitted on one application form as no qualifying well can be used more than once.

Can we pick 5 Sections and map the balance of the lands from a qualifying well?

You can not "pick and map" from the same qualifying well (i.e. select up to 5 Sections of land and also map additional lands with the technical data). However, you may submit mapping for Section 15 or 17 continuation, in addition to the lands being applied for pursuant to Section 16.

If we apply with mapping and our mapping proves less than 5 Sections, do we have an option to pick 5 Sections?

Yes. In the Department's response to your application, they will give you the choice to either submit additional data to support your original application, or select up to 5 Section s of land provided the Section s being selected will be evaluated by the qualifying well and meet the distance criteria.

When do we need a letter of authorization from a well licensee?

You need authorization from the well licensee if:

the lease that the well is drilled on, is not being applied for and
the applicant is not the same party as the well licensee.

Does the qualifying well have to evaluate the rights in the lease?

Yes. If your well is licenced to the Viking zone and the expiring lease only contains rights below the Mannville zone, a Section 16 continuation will not be granted. Should any portion of the Section contain rights that will be evaluated by the well, the whole Section will be continued.

If we re-enter an existing well, will it qualify for continuation under Section 16?

You will qualify for a Section 16 continuation if you get a new Rig Release Date, since the length of continuation pursuant to a Section 16 is based on a RR date.

We drilled a well on our expiring agreement, but the well was D&A and we don't want to continue the agreement even though it is eligible for continuation pursuant to Section 16. Should we notify you that we wouldn't be submitting an application?

If all of the activity associated with the well was completed and the rig released before the expiry, then you may allow the agreement to expire and you should not notify us that you are not applying for continuation.

However, if the rig was released after the expiry date, then you may not allow the agreement to expire. In this situation you must apply for continuation and pay the rent for the current year. If you fail to do so, we will consider the activities that you conducted after the expiry date of the agreement to be in trespass.

F. SECTION 17: CONTINUATION FOR ONE YEAR FOR POTENTIALLY PRODUCTIVE RIGHTS

Do I have to drill a new well on the Section 17 lands in order to get them continued pursuant to Section 15?

Not necessarily. A well that is drilled off the location may evaluate the Section 17 lands, and provide enough new information to prove them productive and thereby continue them. The critical element in applying for continuation at the end of a Section 17 period is that you must have some new data that was not submitted at the expiry of the primary or intermediate term of the agreement. You must prove the lands productive in order to keep them as you can not be granted a second Section 17 continuation.

Should I include the acceptance fee with my application for continuation pursuant to Section 17?

No. Do not enclose the fee with your continuation application. When we have reviewed your application and determined the amount that is required for the lands that will be continued pursuant to Section 17, we will include a request for the payment of the fee in our letter to you. This is much simpler for us, administratively, than refunding part of your payment if some of the lands in your application are not continued.

G. SECTION 18: NOTICES OF NON-PRODUCTIVITY

Why did I get a Section 18 notice served on my agreement?

The Section 18 notice doesn't mean that we have proof that your agreement is no longer productive. It means that something has changed since the agreement was continued, so that we believe it may no longer be capable of producing in paying quantity from the deepest productive zone. For instance, a well on or near the agreement may have ceased producing or been abandoned; a unit to which the agreement was subject may have terminated; you may have recently ceased paying offset compensation due to the abandonment of an offsetting freehold well. Or it may simply be that we are reviewing the area and we are unable to verify the productivity of the agreement with the information we have at our disposal.

Do I have to drill a well to satisfy a Section 18 notice?

Not necessarily. A Section 18 notice means that the Department believes your agreement may no longer be productive, but any one of a number of things could have led us to that conclusion. Sometimes satisfying a Section 18 notice is as simple as sending us some technical data that we hadn't previously seen.

When we are looking at lands for posting, we sometimes spot agreements that are continued under Section 15 yet these do not seem to meet the criteria for continuation. Is there any way we can get these lands reviewed, so that maybe they can be freed up for us to post?

There is a process for this, but it doesn't produce immediate results. Even if we agree with you that the lands are no longer productive, you will have to wait more than a year for them to become available.

First you should acquire a search of the lands/leases to ensure that lands have not been continued within the past year; are not in the primary term; under existing Section 18 notice; within a designated Oil Sands area; there is no productive well on the spacing unit; the rights are not unitized; subject to a gas storage agreement; there is no adjacent producing freehold well for which offset compensation is being paid, or there are no nearby productive wells from which a pool could be mapped on to the agreement. If none of these factors is in evidence, then you can proceed with step two.

Send Continuations a request to review the lands confirming that a search for the above criteria was done. We call this a "third party review". The normal response time is 4 to 6 months. The fact that you are prepared to post the land if it becomes available is not taken into consideration at any time during this process.

Once we have completed the review, we will advise you whether or not we are serving a Section 18 notice. If we are satisfied that the lands are still productive, we will not be able to give you reasons why we are not serving a notice since that could breach the confidentiality of someone else's data. If we do serve a notice, we do not advise the lessee that the notice is a result of a third party review.

The notice is for one year, and it gives the lessee an opportunity to prove that the lands are still productive, so it is possible that the lands will be further continued at the end of the year.

H. GENERAL

Can we continue to work on a well after expiry?

Upon agreement expiry all drilling operations have to cease, except for:

a well(s) that is physically producing, and
a new 'qualifying' well drilled under Section 16 of the P&NG Tenure Regulation. In this instance, an operator can continue to drill and proceed with testing/completion operations, but only on the (one section) spacing unit of the qualifying well. For such work to continue, the qualifying well must evaluate the rights held in the agreement and be located on lands in the Section 16 application. The department responds to applications under Section 16 within one month from the date of receipt.

How can I tell what options are open to me after the expiry of the primary/intermediate term of an agreement, or the expiry of some other form of continuation?

Type of Expiry or Extension	Section 15	Section 16	Section 16(8)	Section 17	Section 18(6)
Primary/intermediate term expiry	x	x		x
Section 16 expiry	x	x	x
Section 16(8) expiry	x	x	x
Section 17 expiry	x	x
Section 18 expiry	x	x			x
Section 18(6) expiry	x	x			x

I want to call you with a question about my application, but I don't have an agreement number, only a land description. Will that do?

The agreement number is the key piece of information that allows us to access information about an agreement. If you call us without having the number as a reference we may not be able to find the information you need. You should call our Searches Branch at 403-297-6324 to get the agreement number before you call us with your enquiry. There is also some private sector companies that offer search services.

Section 15 of the Petroleum and Natural Gas Tenure Regulation talks about the production of petroleum and natural gas "in paying quantity". Where can I find a definition of "paying quantity"?

The Petroleum and Natural Gas Tenure Regulation does not contain a definition of paying quantity. It would be impractical and inequitable to define this phrase in terms of exact quantities or measurements, and extremely difficult to formulate definitions flexible enough to be applied to wells, zones and undrilled spacing units (the CAPL definition of paying quantity, for instance, is very long and complex and still relates only to wells). An economical paying quantity in one area of the province may not be economical in another area. Any definitions would have to be abstract, and they might be more restrictive than beneficial.

There is a document called "Technical Guidelines for Continuations" which is available for download from our web site. This guide explains how the phrase in paying quantity is interpreted by the Department.

If I drill a well, and subsequently surrender the agreement or allow it to expire or be cancelled, do I still own the well?

No, the well vests in the Crown (becomes the property of the Crown) when there is no longer an active agreement covering the spacing unit for the well, although you retain the liability for abandoning it as long as the well licence remains in your name.

Some of our correspondence on old agreements refers to Sections of the Mines and Minerals Act that no longer exist. What are the current equivalents?

P & NG Tenure Regulation	Mines & Minerals Act past
15(1)(a) Spacing Unit for productive well	95(1)(a)	99(1)(a)	119(1)(a)	126
15(1)(b) Unit Agreement	95(1)(b)	99(1)(b)	119(1)(b)	128
15(1)(c) Offset Compensation	95(1)(c)	99(1)(c)	119(1)(c)	129
15(1)(d) Gas Storage Agreement
15(1)(e) Deemed productive (Mapping)	95(1)(d)	99(1)(d)	119(1)(d)	127 (Rental Reduction)
16 New Well	96	100	120	130
17 1 Year Beyond Primary Expiry	97	102	122
18 1 year notice	98	103 (1 year)	104 (6 months)

When the department gives one month to respond to a notice or offer, what is meant by one month?

For petroleum and natural gas tenure purposes, when the department specifies one or more months by which to respond or take action, the department means a calendar month. The expiry date falls on the corresponding date in the expiry month. For example, if an offer letter is dated March 15, the one month response period expires on April 15. Therefore, a response or action after April 15 is late. However, if the expiry date does not occur in the expiry month, then the last day of the one month response period is the last day of the following month. For example, if a letter is dated March 31, the last day of the one month response period is April 30. If a letter is dated January 30, the one response period is February 28 (or February 29 in a leap year.)

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On this page

A. CONTINUATION MAKING AN APPLICATION

B. CONTINUATION APPLICATION FORM

C. SUBMITTING DATA

D. SECTION 15: INDEFINITE CONTINUATION

E. SECTION 16: CONTINUATION DUE TO RECENT OR CURRENT DRILLING

F. SECTION 17: CONTINUATION FOR ONE YEAR FOR POTENTIALLY PRODUCTIVE RIGHTS

G. SECTION 18: NOTICES OF NON-PRODUCTIVITY

H. GENERAL

A. CONTINUATION MAKING AN APPLICATION

B. CONTINUATION APPLICATION FORM

C. SUBMITTING DATA

D. SECTION 15: INDEFINITE CONTINUATION

E. SECTION 16: CONTINUATION DUE TO RECENT OR CURRENT DRILLING

F. SECTION 17: CONTINUATION FOR ONE YEAR FOR POTENTIALLY PRODUCTIVE RIGHTS

G. SECTION 18: NOTICES OF NON-PRODUCTIVITY

H. GENERAL