Indian Oil and Gas Regulations (SOR/2019-196)

Marginal note:Exception

105 Section 103 does not apply to a disposal rights agreement that was entered into before these Regulations came into force.

Pooling, Production Allocation and Unit Agreements

Marginal note:Single spacing unit production

• 106 (1) If a well is producing from First Nation lands, the Minister must determine the percentage of production from the well to be allocated to each contract in the spacing unit from which the well is producing, based on the area of the First Nation lands that are subject to each contract, in proportion to the area of the spacing unit.

• Marginal note:Notice to holder and council

  (2) The Minister must send each holder and the council a notice indicating the percentage of the production that is allocated to each contract.

Marginal note:Multiple spacing unit production

• 107 (1) If a well is producing from more than one spacing unit and the lands from which it is producing are not entirely First Nation lands or are not subject to a single contract, the Minister must determine the percentage of production from the well to be allocated to the First Nation lands and to each contract, based on the criteria used by the provincial authority in making such allocations.

• Marginal note:Notice to holder and council

  (2) The Minister must send each holder and the council a notice indicating the percentage of the production that is allocated to the First Nation lands and to each contract.

Marginal note:Unit agreement

• 108 (1) The Minister may, with the prior approval of the council, enter into a unit agreement.

• Marginal note:Allocation of production

  (2) The calculation of royalties payable under a contract that is subject to a unit agreement must be based on the production allocated to each tract as specified in the agreement.

Surrender, Default and Cancellation

Marginal note:Surrender of subsurface rights or interests

• 109 (1) A subsurface contract holder may surrender their rights or interests under the contract, in whole or in part, by sending the Minister a notice of surrender in the prescribed form.

• Marginal note:Partial surrender of subsurface rights or interests

  (2) In a partial surrender of subsurface rights or interests,

  • (a) all the rights and interests in a spacing unit must be surrendered; and

  • (b) the rent for subsequent years is reduced in proportion to the reduction of the lands that are subject to the contract, to a minimum of $100.

• Marginal note:Notice to council

  (3) When rights or interests under a subsurface contract are surrendered, the Minister must send the council a copy of the notice of surrender and, in the case of a partial surrender, a copy of the amended contract.

Marginal note:Surrender of surface rights or interests

• 110 (1) A surface contract holder may surrender their rights or interests under the contract, in whole or in part, by applying in the prescribed form for the Minister’s approval.

• Marginal note:Copy to council

  (2) The Minister must send the council a copy of the application.

• Marginal note:Approval

  (3) The Minister must approve the surrender if

  • (a) the holder is not in default under the contract, these Regulations or an order given under the Act;

  • (b) the Minister and the council have inspected the contract area to be surrendered and the Minister has confirmed that the remediation and reclamation of the surface in that area are satisfactory; and

  • (c) in the case of a partial surrender, the boundaries of the remaining contract area continue to meet the requirements of these Regulations and the partial surrender approval application fee set out in Schedule 1 has been paid.

• Marginal note:Adjusted rent

  (4) If the surrender of rights or interests under a surface contract is partial, the rent for subsequent years is reduced in proportion to the reduction of the lands that are subject to the contract. However, the rent must be no less than the rent payable for 1.6 hectares.

• Marginal note:Notice to council

  (5) If the surrender of rights or interests under a surface contract is approved, the Minister must send the council a notice to that effect and, in the case of a partial surrender, a copy of the amended contract.

Marginal note:Non-compliance notice

• 111 (1) If a holder fails to comply with their contract, the Act or these Regulations, the Minister may send them a notice that identifies the non-compliance and warns that the contract will be cancelled if the holder is in default.

• Marginal note:Response to notice

  (2) Within 30 days after the day on which the notice is received, the holder must remedy the non-compliance identified in the notice or, if the non-compliance does not relate to money owed under the Act, submit to the Minister a plan that shows how and when it will be remedied and why the proposed deadline is justified in the circumstances. Subsequently, the holder must remedy the non-compliance in accordance with the plan.

• Marginal note:Deficient plan

  (3) If the plan does not meet the requirements of subsection (2), the Minister must send the holder a notice to that effect that identifies its deficiencies.

• Marginal note:Amended plan

  (4) A holder that receives a notice sent under subsection (3) must

  • (a) within 30 days after the day on which the notice is received, submit to the Minister an amended plan that corrects the deficiencies identified in the notice; and

  • (b) remedy the non-compliance identified in the notice sent under subsection (1) in accordance with that plan.

• Marginal note:Default

  (5) A holder that receives a notice sent under subsection (1) is in default if they do not comply with the requirements of subsection (2) or, if applicable, subsection (4).

• Marginal note:Cancellation for default

  (6) The Minister must cancel the contract of a holder that is in default.

• Marginal note:Non-payment of compensatory royalty

  (7) If a contract is to be cancelled for non-payment of a compensatory royalty, the Minister must cancel the rights or interests conferred by the contract down to the base of the offset zone in the spacing unit to which the offset notice applies, except for any rights or interests in a spacing unit referred to in any of paragraphs 63(1)(a) to (e).

• Marginal note:Cancellation notice

  (8) When a contract is cancelled, the Minister must send the holder a notice indicating that their contract is cancelled, the reason for the cancellation and its effective date.

• Marginal note:Notice to council

  (9) The Minister must send the council a copy of every notice sent under this section.

Marginal note:Continuing liability

112 When a contract ends, any liabilities for outstanding amounts that are owed under the contract, any liabilities for damages caused by operations carried out under the contract and any obligations respecting abandonment, remediation or reclamation survive the end of the contract.

Administrative Monetary Penalties

Marginal note:Designated provisions

113 The provisions set out in Schedule 6 are designated as provisions whose contravention is a violation that may be proceeded with under sections 22 to 28 of the Act.

Transitional Provisions

Marginal note:Executive Director

114 The powers, duties and functions of the Executive Director under the Indian Oil and Gas Regulations, 1995 are to be exercised or performed by the Minister and any reference to the Executive Director in a contract granted under those Regulations is deemed to be a reference to the Minister.

Marginal note:Permits

115 Sections 15, 16 and 18 to 21 of the Indian Oil and Gas Regulations, 1995 continue to apply to permits granted under those Regulations.

Repeal

116 The Indian Oil and Gas Regulations, 1995Footnote ¹ are repealed.

• Return to footnote ¹SOR/94-753

Coming into Force

Marginal note:S.C. 2009, c. 7

Footnote ^*117 These Regulations come into force on the day on which An Act to amend the Indian Oil and Gas Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

• Return to footnote ^*[Note: Regulations in force August 1, 2019, see SI/2019-39.]