Indian Oil and Gas Regulations, 1995 (SOR/94-753)

Well Licence

11 Before commencing any drilling operations under a permit or lease, an operator shall submit to the band council and to the Executive Director a copy of a well licence or other equivalent document issued by the provincial authority responsible for issuing well licences.

12 An operator shall notify the band council and the Executive Director before spudding a well.

13 An operator shall

• (a) in accordance with good oilfield practice, test all prospective oil and gas zones that are penetrated and that yield wireline log evidence that indicates the presence of hydrocarbons in significant quantities; and

• (b) notify the band council and the Executive Director sufficiently in advance of those tests to allow the band council and the Executive Director to be present when the tests are being carried out.

• 14 (1) Unless otherwise specified in a permit or lease, a permittee or lessee who is engaged in drilling, workover or recompletion operations shall submit a weekly report to the band council and to the Executive Director that summarizes the operations and that describes any significant results obtained from the operations during the week.

• (2) Every permittee or lessee shall submit field prints of wireline logs and drillstem results, including pressure data, to the Executive Director within seven days after the field prints are produced.

• (3) After the rig release, completion, recompletion or abandonment of a well or the suspension for a period of six months of the operation of a well, the permittee or lessee shall submit to the band council and to the Executive Director

  • (a) within 30 days, a copy of all final information that is normally submitted to provincial authorities in respect of operations on non-Indian lands, including

    • (i) the results of all drillstem tests,

    • (ii) core analyses,

    • (iii) fluid analyses,

    • (iv) data from all wireline logs run at the wellsite, and

    • (v) other diagnostic data; and

  • (b) within 60 days, a final well history report.

• (4) All wireline log data and results of drillstem tests, including pressure data that are submitted pursuant to subsection (3), shall be in both paper and magnetic digital form if the information was originally obtained in magnetic digital form.

• (5) The Executive Director may, in consultation with the band council, in writing, direct a permittee or lessee to supply, within a reasonable time, any information that is in addition to the information submitted pursuant to subsections (2) to (4) and that is relevant to the operation.

Permit Rights

15 Subject to subsection 27(1), a permittee

• (a) may drill for oil and gas within the permit area, if the permittee has first obtained a well licence referred to in section 11; and

• (b) has the exclusive right to select one or more leases pursuant to section 20 on relinquishment of the permit area or a portion thereof.

16 The initial term of a permit shall be

• (a) the term, if any, that is specified in the call for tenders pursuant to which the permit is granted;

• (b) where the permit is granted consequent to a call for proposals or to direct negotiations, the term specified in the permit; or

• (c) in any other case, one year.

• 17 (1) Before the end of the initial term of a permit, or of any extension thereof, the permittee may apply to the Executive Director for an extension or a further extension of the term of the permit in respect of all or part of the permit area.

• (2) A permittee who makes an application under subsection (1) shall send a copy of the application to the band council.

• (3) An application made under subsection (1) shall contain

  • (a) a summary of the exploratory work that has been completed;

  • (b) an estimate of the costs that have been incurred in evaluating the permit area to the date of the application; and

  • (c) an outline of the operations that are proposed for the extension period specified in the application.

• (4) Where a permittee who is applying for an extension of a permit pursuant to subsection (1) has complied with the requirements of the permit and these Regulations and has provided an outline of the operations for the extension period, the Executive Director may, with the approval of the band council, grant an extension of the permit for a term not exceeding one year.

• (5) Subsection (4) does not apply in respect of a permit the provisions of which provide for an extension of the permit, in which case an extension of such a permit shall be in accordance with those provisions.

Permit Fee

18 Except as otherwise specified in the permit, the fee for a permit shall be paid in advance in the amount of

• (a) for the initial term, $2.50 per year per hectare of the permit area; and

• (b) for each extension of the term, $5.00 per year per hectare of the permit area.

Discoveries

19 Where oil or gas is discovered in a permit area in a commercial quantity, the permittee shall apply, pursuant to section 20, for one or more leases in the permit area that contains the discovery well, before the earlier of

• (a) the day that is 90 days after the day of the discovery, and

• (b) the commencement of the drilling of any other well in the permit area within 8 km of the discovery well.

Conversion of Permits to Leases

• 20 (1) Where, before the end of the term of a permit, or of any extension thereof, a permittee applies to the Executive Director for the conversion of the permit to one or more leases and sends a copy of the application to the band council, the Executive Director shall, in consultation with the band council, grant the leases applied for if the permittee has

  • (a) complied with the terms and conditions of the permit, these Regulations and any direction given under these Regulations; and

  • (b) paid the first year’s lease rental and the lease fee set out in Schedule II for each lease applied for.

• (2) The aggregate area of a lease granted pursuant to subsection (1) shall not exceed

  • (a) any portion of the permit area that is specified for lease entitlement in

    • (i) where permit was granted consequent to a call for tenders, the call for tenders, or

    • (ii) where the permit was granted consequent to a call for proposals or direct negotiations, the permit; or

  • (b) if no area is specified for lease entitlement as described in paragraph (a), one half of the original permit area.

• (3) The area of a lease granted under subsection (1) shall

  • (a) be in the form of a square or rectangle;

  • (b) have an area that is not less than one quarter-section and not more than six sections;

  • (c) have a length that is not longer than twice its width; and

  • (d) be separated from any other lease area by a distance of not less than 1.6 km, except where the lease areas are diagonally situated so as to have a common corner.

• (4) The boundaries of the area of a lease granted under subsection (1) shall conform to the boundaries of

  • (a) sections, legal subdivisions, lots or aliquot parts of lots; or

  • (b) if the lease is for an unsurveyed area, projected sections, legal subdivisions lots or aliquot parts of lots.

• (5) Notwithstanding subsections (3) and (4), the Executive Director may grant a lease in respect of an area that does not meet the requirements set out in those subsections if

  • (a) the shape and boundaries of an Indian reserve are such that a lease area selected cannot meet those requirements;

  • (b) a call for tenders consequent to which the permit was granted provides for a lease area that does not meet those requirements; or

  • (c) the permit expressly provides for a lease area that does not meet those requirements.

• (6) Notwithstanding subsection (3), if a deposit of crude bitumen is identified, the Executive Director may, on application by a permittee and with the approval of the band council, grant a lease with an area larger than that set out in that subsection if the aggregate area of all leases applied for does not exceed the limit set out in subsection (2).