Oil & Gas Law
Our firm has a lengthy history of representing mineral owners, farmers, and other landowners affected by the oil and gas industry. We also have many small business clients who own, operate or are otherwise involved in oil and gas production.
Oil companies who wish to enter land to develop oil and gas resources must reach an agreement with the owners and occupants of those lands. If an agreement cannot be reached, the Surface Rights Board will make orders granting Right of Entry to those oil companies prescribing the terms and conditions to be imposed upon that entry and fixing the compensation payable to the landowners. Some oilfield operations are not governed by surface rights legislation, such as entry for larger pipelines and seismic operations. A surface rights agreement should provide for fair compensation to the landowner and occupant, and should also contain provisions to protect the landowner's rights. These include provisions to limit the rights granted under the agreement to only those matters actually required by the oil company, to help define the oil company's responsibility for environmental protection, to provide for appropriate compensation and responsibility in respect to any future damages that might arise, and to confirm the oil company's legal obligation to reclaim the lands and pay appropriate compensation upon surrender of the surface rights.
Ownership of mineral rights is extremely complex. Title to mineral parcels is frequently divided among multiple owners as a result of the passage of this ownership from older to younger generations, and in some cases titles have become fractionalized as a result of sales or other transactions dating back to the early 1950's. Land titles legislation restricts the minimum fractional size which a mineral title may take. In Saskatchewan, the current minimum interest for new mineral titles is an undivided 1/20th interest, and in Manitoba an undivided 1/16th interest. To add to this complexity, many interests in minerals are not held under any land titles at all, but instead are held in the form of various trust and similar certificates dating back to transactions which took place many decades ago. We assist our clients in identifying and understanding the interests which they own in mines and minerals, and options available to attempt to streamline and consolidate that ownership.
Petroleum & Natural Gas Leases
An oil company which wishes to develop minerals and drill for oil and gas must obtain a petroleum and natural gas lease from the freehold owners of those minerals. Like mineral ownership, the Petroleum and Natural Gas lease is extremely complex. The oil industry today in almost all cases uses a standard form of lease which it has developed known as CAPL Lease. This lease form requires many amendments to ensure the interests of the mineral owner are adequately protected. The petroleum and natural gas lease must contain provisions to ensure, among other things, that no expenses are charged to the mineral owner, that suspended wells do not improperly extend the term of the lease, that the minerals cannot be unitized or pooled with other mineral interests without proper procedure, that offset obligations are properly defined, and a myriad of other critical concerns.
Over the years we have represented hundreds of mineral owners, assisting them in finding suitable oil and gas companies to lease their minerals, negotiating appropriate compensation and ensuring that the leases they grant address all of the concerns necessary to protect their interests.
Participation Agreements & Joint VenturesMany of our clients participate in the drilling and development of oil wells through a series of different types of agreements. These include participation agreements, joint ventures, partnerships, farmin agreements, farmout agreements and similar arrangements. We assist our clients in identifying the tax and legal implications of these types of arrangements.