Canada Oil and Gas Land Regulations (C.R.C., c. 1518)

• 58. (1) A lessee who is the holder of a licence may

  • (a) carry out exploratory work and drill wells in the Canada lands included in his lease; and

  • (b) produce, mine, quarry or extract any oil or gas or any minerals or substances that are produced mined, quarried or extracted in association with any oil or gas from the Canada lands included in his lease.

• (2) Where a lessee is authorized to carry out work or operations under these Regulations, that work or those operations may be performed by any person employed or hired by the lessee.

• 59. (1) Subject to subsection (2), a lease area shall be composed of quadrilateral blocks of sections not larger than five sections by three sections or four sections by four sections.

• (2) Where leases are granted for not more than two-fifths of the number of sections in the permit area held by the applicant, the lease areas may be composed of quadrilateral blocks of sections not larger than six sections by three sections.

• (3) The lease areas within a permit area shall

  • (a) corner one another;

  • (b) be separated from one another by at least one section; or

  • (c) be a combination of the blocks referred to in paragraphs (a) and (b).

• (4) Except in the case of

  • (a) sections that are reduced pursuant to subsection 17(1), and

  • (b) Canada lands referred to in subsection 17(3),

  no oil and gas lease shall be granted for less than one section.

• (5) Except as provided in subsection (2), nothing in these Regulations shall be construed so as to prevent a permittee from leasing a total of one-half of the number of sections in the permit area.

• (6) Subsections (1) and (3) do not apply to an oil and gas lease granted pursuant to section 57.

• 60. (1) Subject to subsection (2), where an oil and gas lease is granted pursuant to section 54, the Canada land within the permit areas, but not included in the lease, shall be surrendered to Her Majesty.

• (2) Where an oil and gas lease is granted pursuant to section 54, the Chief may allow the permittee to retain under permit those sections of the permit area that are not

  • (a) included in the oil and gas lease, or

  • (b) contiguous to the lease area.

61. Subject to subsection 35(2), every oil and gas lease shall be granted for a term of 21 years.

62. An oil and gas lease shall, upon application by the lessee, be renewed for successive terms of 21 years if

• (a) the area under the oil and gas lease is, in the opinion of the Minister, capable of producing oil or gas; and

• (b) the lessee has complied with the terms of the oil and gas lease and with the provisions of these Regulations in force at the date on which the oil and gas lease was granted.