Frontier Lands Petroleum Royalty Regulations

7 (1) An interest holder in relation to a project may apply to the Minister, in the prescribed form, for the certification of an abandonment and restoration royalty trust for that interest holder’s interest in the project.

(2) The Minister shall certify the abandonment and restoration royalty trust if

• (a) the trust indenture includes the mandatory clauses set out in the prescribed form;

• (b) the trust is managed by a trustee that is dealing at arm’s length with the interest holder and that is a corporation resident in Canada that is licensed or otherwise authorized under the laws of Canada or of a province to carry on in Canada the business of offering to the public its services as trustee;

• (c) the trust is restricted to holding property described in any of paragraphs (a), (b) and (f) of the definition qualified investment in section 204 of the Income Tax Act;

• (d) the trust is established for the sole purpose of holding funds to be used by the interest holder for abandonment and restoration for the project; and

• (e) the trust indenture includes a mandatory clause providing that the ownership of the trust cannot be transferred to another person.

(3) An abandonment and restoration royalty trust certification expires on the earlier of the date on which

• (a) the interest holder terminates the trust;

• (b) the interest holder sells its entire interest in the project;

• (c) the interest holder becomes insolvent or commits an act of bankruptcy; or

• (d) all abandonment and restoration is completed.