Crown Disposition Regulation

Crown Disposition Regulation, M.R. 108/94 The Oil and Gas Act , C.C.S.M. c. O34 Regulation 108/94 Registered June 6, 1994 bilingual version (HTML) Table of Contents Section PART 1 DISPOSITIONS SALE OF DISPOSITIONS 1 Definition 2 Public sale of disposition 3 Notice of public sale 4 Offer to purchase disposition 5 Private sale of lease 6 Acceptance of offer to purchase 7 Delegation EXPLORATION RESERVATION 8 Form of exploration reservation 9 Annual rent 10 Extension of term 11 Conversion to lease LEASE 12 Form of lease 13 Annual rent 14 Application to renew lease 15 Application to extend lease 16 Division of a lease area 17 Compensatory royalty re offset area 18 Deferral of offset area drilling PART 2 REGISTRATION OF TRANSFERS AND INSTRUMENTS TRANSFERS 19 Form of transfer 20 Application to register 21 Transfer of part of a lease area INSTRUMENTS 22 Registration 23 Discharge of registration 24 Security given under the Bank Act 25 Discharge of registration 26 Cancellation of registration 27 Repeal 28 Coming into force Schedule A Fees and Rentals B Exploration Reservation C Oil and Gas Lease D Transfer of Disposition E Transfer of Undivided Interest in a Disposition F Transfer of Part of a Lease Area G Notice of Instrument H Discharge of Instrument PART 1 DISPOSITIONS SALE OF DISPOSITIONS Definition 1 In this regulation, "Act" means The Oil and Gas Act . Minister may hold public sale of disposition 2(1) The minister may at any time hold a public sale of a disposition by sealed tender. Application for public sale of disposition 2(2) Any person may make application to the minister to hold a public sale of a disposition by sealed tender. Content of application 2(3) An application to have a disposition offered by public sale must be submitted to the registrar and must include (a) the name of the applicant; (b) the type of disposition being requested; (c) the area and any formation that would be included in the disposition; and (d) any condition to which the applicant requests the disposition be made subject. Registrar to give notice of public sale 3(1) The registrar shall give notice of a public sale in accordance with the directions of the minister. Notice to be given to government departments 3(2) Before giving notice of a public sale, the registrar shall forward a list of proposed dispositions and the areas covered to government departments that could, in the opinion of the registrar, be affected by the granting of a disposition. Content of offer to purchase disposition 4(1) An offer to purchase a disposition shall include (a) the name or names of persons to be shown as the holders, and the percentage interest of each person; (b) the application fee set out in Schedule A; (c) the rental for the first year of the term of the disposition as set out in Schedule A; (d) any bonus offered. Offer to be in accordance with notice 4(2) No offer to purchase a disposition may be considered unless it is in accordance with the terms and conditions set out in the notice of public sale. Minister's discretion 4(3) The minister may refuse any or all offers to purchase a disposition. Private sale of lease to complete interest in spacing unit 5(1) Notwithstanding sections 2 and 3, the minister may, on receiving an offer to purchase a lease, issue a lease for an area that is less than a spacing unit in size where, in the opinion of the minister, the lease is required to complete the applicant's interest in the spacing unit for purposes of subsection 91(2) of the Act. Content of offer to purchase lease 5(2) An offer to purchase a lease under this section shall include (a) the application fee set out in Schedule A; (b) the rental for the first year of the term of the lease as set out in Schedule A; and (c) a bonus amount determined by the minister. Acceptance of offer to purchase 6 A person is entitled to be the holder of a disposition when the person's offer to purchase is accepted by the minister. Delegation of minister's power 7 The minister's power to issue a disposition under clauses 35(a), (b) and (c) of the Act is delegated to the director. EXPLORATION RESERVATION Form of exploration reservation 8 An exploration reservation shall be in the form set out in Schedule B, or in such other form as may be determined from time to time by the minister, and may include such terms and conditions as the minister considers necessary or advisable. Annual rent 9 The annual rent for an exploration reservation is set out in Schedule A. Extension of term 10 An application under subsection 43(3) of the Act for extension of the term of an exploration reservation must be submitted in writing to the director before the expiry of the term of the exploration reservation and must include the annual rent payable for the extension term set out in Schedule A. Conversion to lease 11(1) An application under subsection 45(1) of the Act may be made in writing to the registrar before the expiry of the term of the exploration reservation and must include (a) a description of the requested lease area selected in accordance with subsection (2); (b) the name or names of the persons to be shown as the holders of the lease and the percentage interest of each person; and (c) the annual rent set out in Schedule A. Maximum size of lease area 11(2) The maximum number of quarter sections which the holder may include in an application under subsection (1) shall be determined in accordance with the following formula: L =8 + (D −500)/60 (rounded to nearest whole number with 0.5 and greater rounded up) where: L is the maximum number of quarter sections for which a holder is entitled to apply to lease, such number not to be less than 8; and D is the total depth or measured length, in metres, of a well or wells drilled within the reservation area by or on behalf of the holder of the reservation area during the term of the exploration reservation. LEASE Form of lease 12 A lease shall be in the form set out in Schedule C, or in such other form as may be determined from time to time by the minister, and may include such terms and conditions as the minister considers necessary or advisable. Annual rent 13 The annual rent for a lease is set out in Schedule A. Application to renew lease 14 An application under subsection 52(1) of the Act for renewal of a lease must be made to the registrar and must include (a) a description of the lease area the holder wishes to renew; (b) a list of all productive spacing units in the lease area indicating the productive formation in each spacing unit; and (c) the annual rent set out in Schedule A. Application by holder for one year extension of lease 15(1) An application under subsection 53(1) of the Act for an extension of the term of a lease must be made to the director before the expiry of the term of the lease and must include (a) a list of all productive spacing units in the lease area indicating the productive formation in each spacing unit; (b) a plan of development of the lease area which includes the holder's written commitment to drill the following minimum number of wells: (i) one well where the number of undrilled spacing units is four or less, (ii) one well for every four undrilled spacing units after the first four, and (iii) one well for any remaining undrilled spacing units; (c) the annual rent set out in Schedule A; and (d) the extension penalty set out in Schedule A. Effective date of renewal term 15(2) Where the holder of a lease for which the director has granted an extension fails to fulfill the commitment provided under clause (1)⁠(b), any renewal term of the lease is deemed to begin on the effective date of the extension. Application for division of a lease area 16 An application under section 55 of the Act for division of a lease area must be made to the registrar and must include (a) a description of the lease area of each of the parts that the holder is requesting to have issued as separate leases; and (b) the duplicate copy of the lease. Compensatory royalty in respect of offset area 17(1) The value of a compensatory royalty payable under subsection 58(2) of the Act shall be determined in accordance with the Crown Royalty and Incentives Regulation and shall be based on (a) the production from the most productive laterally adjoining spacing unit to the offset area, as determined by the registrar; (b) the Crown royalty calculated from the volumes determined in clause (a) at the new oil rate; and (c) the average selling price of production from wells in the area, as determined by the registrar. Calculation of compensatory royalty 17(2) A compensatory royalty determined under this section shall be calculated from the 91st day after notice is given under subsection 58(1) of the Act until the day (a) the registrar receives the lease from the holder for the purpose of surrendering the offset area; or (b) the holder commences the drilling of a well in the offset area. Deferral of offset area drilling 18 An application under subsection 58(3) of the Act to defer the drilling of a well in an offset area shall include (a) the plans of the holder to develop the area covered by the disposition; (b) technical or economic information justifying deferral of drilling; and (c) any other information that the director requires. PART 2 REGISTRATION OF TRANSFERS AND INSTRUMENTS TRANSFERS Form of transfer 19 A transfer document under subsection 70(1) of the Act shall be in the form set out in Schedule D or E or such other form as is acceptable to the registrar. Application to register transfer 20 An application under subsection 70(1) of the Act for registration of a transfer must be made to the registrar and must include (a) the transfer document; and (b) the duplicate copy of the disposition. Transfer of part of a lease area 21 An application under subsection 71(1) of the Act to transfer part of a lease area must be made to the registrar and must include (a) a transfer document in the form set out in Schedule F or such other form as is acceptable to the registrar; and (b) the duplicate copy of the lease. INSTRUMENTS Registration of instruments 22(1) A person intending to register an instrument against a disposition under section 73 of the Act must submit to the registrar (a) a notice of instrument in the form set out in Schedule G or such other form as is acceptable to the registrar; and (b) the fee set out in Schedule A. Certified copy of instrument 22(2) Where in clause (1)⁠(a) a copy of the instrument is not provided at the time of registration, the registrar may in writing request presentation of a certified copy of the instrument from the registrant. Cancellation of registration 22(3) Where the registrant fails to provide a certified copy of the instrument as requested in subsection (2) the registrar may cancel the registration. Discharge of registration 23 A person who registered an instrument against a disposition under section 73 of the Act may discharge the registration by submitting to the registrar a discharge of instrument in the form set out in Schedule H or such other form as may be acceptable to the registrar. Security given under the Bank Act 24 A bank intending to register an instrument under subsection 74(1) of the Act must submit to the registrar (a) a notice of instrument in the form set out in Schedule G or such other form as may be acceptable to the registrar; and (b) the fee set out in Schedule A. Discharge of registration 25 A bank that has registered an instrument against a disposition under subsection 74(1) of the Act may discharge that registration by submitting to the registrar a discharge of instrument in the form set out in Schedule H or such other form as may be acceptable to the registrar. Cancellation of registration 26 An application under section 75 of the Act by the holder of a disposition to cancel a registration against the disposition shall be made to the registrar and must include details pertinent to the holder's claim that the registration should be cancelled. Repeal 27 The Petroleum Crown Leasing Regulation , Manitoba Regulation 429/87 R, is repealed. Coming into force 28 This regulation comes into force on the day The Oil and Gas and Consequential Amendments Act , S.M. 1993, chapter 4, comes into force. SCHEDULE A (Sections 4, 5, 9 to 11, 13 to 15 and 21 to 26) Schedule of Fees and Rentals FEES 1. Application for an exploration reservation or lease: RENTALS 1. Annual rent for the initial term or an extension term of an exploration reservation (per hectare): SCHEDULE B Exploration Reservation SCHEDULE C Oil and Gas Lease SCHEDULE D Transfer of Disposition SCHEDULE E Transfer of Undivided Interest in a Disposition SCHEDULE F Transfer of Part of a Lease Area SCHEDULE G Notice of Instrument SCHEDULE H Discharge of Instrument