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B.C. Reg. 10/82 |
Filed January 11, 1982 |
| This archived regulation consolidation is current to December 3, 2004 and includes changes enacted and in force by that date. For the most current information, click here. |
Petroleum and Natural Gas Act
[includes amendments up to B.C. Reg. 111/2002]
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Contents |
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1 In this regulation:
"Act" means the Petroleum and Natural Gas Act;
"Crown reserve" means petroleum and natural gas rights reserved to her Majesty by the Act;
"drilling licence" means a title to a parcel of Crown reserve petroleum and natural gas rights granted under this regulation conferring a right to explore for petroleum and natural gas;
"earning well" means
(a) a well drilled within the area covered by a drilling licence and includes a well redrilled in the area covered by a permit, drilling licence or lease previously issued and no longer valid, or
(b) a well drilled in a spacing area if the spacing area is located, in whole or in part, within the area covered by a drilling licence.
[am. B.C. Reg. 55/94, s. 1.]
2 (1) Any person may apply to have a drilling licence offered for disposition by public tender.
(2) No disposition shall be made under subsection (1) until 2 weeks have elapsed after publication in the Gazette.
(3) An application under subsection (1) must be delivered to the director with
(a) a written description and map outline of the area sought for inclusion in the drilling licence, and
(b) the name and approximate depth of the geological formation of the area to be tested by drilling.
(4) On receipt of an application, the minister may choose to
(a) accept the application, subject to the changes the minister directs be made, or
(b) refuse the application.
(5) The publication in the Gazette must contain a written description of the area and conditions of the intended disposition.
(6) Every tender shall be accompanied by
(a) the price offered by the tenderer for the drilling licence,
(b) an issuing fee of $500, and
(c) the rental for the first year of drilling licence calculated at the rate of $3.50 a hectare.
(7) A drilling licence must be issued to a person whose tender is accepted by the minister.
(8) The maximum number of
(a) units,
(b) quarter sections in the Peace River block, or
(c) units and quarter sections in the Peace River block combined,
must not exceed 144 in an application under this section.
[am. B.C. Regs. 91/92, s. 1; 55/94, s. 2; 354/98, s. (a).]
3 (1) The minister shall set the form of drilling licence.
(2) A drilling licence shall only contain those conditions set out in the publication referred to in section 2 (2) but, subject to section 111 of the Act, no person shall produce petroleum and natural gas under the authority of a drilling licence.
(3) Subject to an extension under subsection (5), (5.1), (5.3) or (7), a drilling licence subsists for the period set out in Schedule 2 opposite the geographic area in which the land is situated.
(3.1) The annual rent for a drilling licence is $3.50 a hectare payable before the anniversary date of the drilling licence.
(3.2) If a licensee fails to pay the rental required under this or any other section, the licence expires 60 days after the rental was due unless, on or before the 60 days have elapsed, the rental due is paid plus
(a) $100, if the rental is paid up to 10 days after it was due, or
(b) $500, if the rental is paid from 11 to 60 days after it was due.
(4) A drilling licence commences on the date it is issued.
(5) A drilling licence must be extended once, for a period of one year, if the application
(a) is made before the end of the term, and
(b) is accompanied by an extension fee of $500 and rental of $7 a hectare.
(5.1) The minister may extend a drilling licence for the period set out in subsection (5.2) if
(a) an application is made before the end of the term and is accompanied by rental of $3.50 per hectare per year, and
(b) drilling of a well within the location of the licence has been delayed pending completion of
(i) an environmental or socioeconomic study,
(ii) a public hearing, or
(iii) an investigation.
(5.2) An extension under subsection (5.1) must be for the lesser of
(a) the number of years nearest to the period of delay, or
(b) 3 years.
(5.3) The minister may extend a drilling licence for a period of one year if
(a) the drilling licence has previously been extended under subsection (5),
(b) the application for the extension is made during the term of a current extension of the licence under
(i) subsection (5),
(ii) subsection (5.1), or
(iii) this subsection,
(c) the application for the extension is accompanied by rental of $3.50 for each hectare, and
(d) the drilling licence is included in a scheme approved under section 100 of the Act for the development or production of natural gas from a stratum or strata that mainly contain coal.
(5.4) An extension under subsection (5.3) must not
(a) apply to a depth below the deepest zone that is included in the scheme referred to in subsection (5.3) (d),
(b) be given if 5 extensions under subsection (5.3) have been given previously for the same drilling licence, or
(c) include land that is not included in the scheme referred to in subsection (5.3) (d).
(6) A licensee may assign or sublet all or a portion of the licensee’s interest in a drilling licence but may not assign or sublet that interest on the basis of all or a portion of any area in the location.
(7) The expiry date of a drilling licence is extended to the date the drilling of a well within the area covered by the drilling licence is completed if
(a) the drilling licence would otherwise expire before the drilling of the well is completed,
(b) drilling of the well has reached at least 150 metres on the date the extension is granted, and
(c) drilling of the well is being continuously and diligently conducted.
(8) If an expiry date is extended under subsection (7), no additional well may be commenced within the area covered by the drilling licence except as provided under subsection (9).
(9) If the expiry date of a drilling licence is extended under subsection (7) and drilling of the well must be discontinued for mechanical reasons, a new well may be commenced in its place during the period of the extension under subsection (7).
[am. B.C. Regs. 62/92; 91/92, s. 2; 55/94, s. 3; 111/2002.]
4 (1) Subject to the Act, petroleum and natural gas on a Crown reserve may only be taken under authority of a lease issued under this regulation.
(2) A licensee may terminate
(a) the licensee's drilling licence, or a portion of it, at any time provided that spacing areas are not split,
(b) a portion of the licensee's drilling licence if an application is made for a lease based on an earning well that is a gas well or a petroleum well, or
(c) a portion of the licensee's drilling licence if an application is made for a lease and the portion is included in a utilization agreement entered into by the minister under section 114 of the Act.
(3) A lease issued on the basis of an earning well only extends to the base of the deepest zone that has been drilled into and evaluated for the well named in the lease application.
(3.1) A lease issued on application under subsection (2) (c) must only include a zone if that zone is specified as a unitized zone in the unitization agreement to which the application applies.
(4) Where a lease is issued following application under subsection (2) (b), the number of units or quarter sections shall not exceed the number set out in Schedule 1, and no entitlement shall be deferred for a later application, but zones within the units or quarter sections not included in the lease continue as part of the drilling licence.
(5) With the exception of those leases issued following application under subsection (2) (b), if a licensee drills earning wells on a drilling licence the licensee may, before the drilling licence expires, apply for a lease for each earning well drilled.
(6) The maximum number of units or quarter sections which a licensee is entitled to lease for each earning well shall be determined in accordance with Schedule 1.
(7) Repealed. [B.C. Reg. 55/94, s. 4 (c).]
(8) Whole gas spacing areas within the location of the drilling licence may not be split in any lease application except where, in the opinion of the minister, a petroleum well is located in the area of the proposed lease.
[am. B.C. Regs. 216/91; 55/94, s. 4.]
4.1 (1) The director must, on the written application of the licensees, approve the grouping of 2 drilling licences as one drilling licence if
(a) a licensee has drilled an earning well that is a gas well or a petroleum well within the area covered by one of the drilling licences to be grouped,
(b) the director receives the application before the earliest expiry date of the drilling licences being grouped, and
(c) the distance between the locations of the drilling licences being grouped does not exceed 4 kilometres.
(2) Drilling licences grouped under this section must be treated as one drilling licence for the purposes of a lease application under section 4.
(3) This section does not apply to an application to group a drilling licence that has previously been grouped.
[en. B.C. Reg. 55/94, s. 5; am. B.C. Reg. 354/98, s. (b).]
5 (1) Notwithstanding section 4, no lease will be issued under this regulation unless application for it is received by the director within 60 days from the date of expiry of the drilling licence.
(2) Subject to subsection (1), no person shall be issued with a lease after expiry of a drilling licence unless, in addition to the amounts set out in the Act, the person pays
(a) $100, if the application for lease is received by the director on or before 10 days after its expiry, or
(b) $500, if the application is received by the director after 10 days but within 60 days after its expiry.
(3) Subject to this regulation, Part 6 of the Act applies to leases issued under this regulation.
[am. B.C. Regs. 55/94, s. 6; 354/98, s. (a).]
[en. B.C. Reg. 55/94, s. 7.]
Earnings per Well
(section 4 (4) and (6))
|
Column 1 |
Column 2 |
|
Length of Well Bore |
Earn |
|
Metres |
Units or Quarter Sections |
|
less than 1001 |
8 |
|
1 001 to 1 300 |
12 |
|
1 301 to 1 500 |
16 |
|
1 501 to 1 800 |
20 |
|
1 801 to 2 100 |
24 |
|
2 101 to 2 400 |
28 |
|
2 401 to 2 600 |
32 |
|
2 601 to 2 800 |
36 |
|
2 801 to 3 000 |
40 |
|
3 001 to 3 200 |
44 |
|
3 201 to 3 400 |
48 |
|
3 401 to 3 600 |
52 |
|
3 601 to 3 800 |
56 |
|
3 801 to 4 000 |
60 |
|
4 001 to 4 200 |
64 |
|
4 201 to 4 400 |
68 |
|
over 4 400 |
72 |
Schedule 2
[en. B.C. Reg. 55/94, s. 7.]
Term of Drilling Licence
(section 3 (3))
| Column 1 | Column 2 |
Areas | ||
| Area 2 | ||
(a) | Those units contained within the following described Blocks and Groups: | 3 years |
| (b) |
Those units contained within the following described Blocks and Groups: | |
| (c) | All of Vancouver Island | |
| Area 2 | ||
(a) | Those units contained within the following described Groups: | 4 years |
| (b) | All of the Queen Charlotte Islands | |
Area 3 | All land and land covered by fresh water in the Province of British Columbia excluding those areas described in Areas 1 and 2 above. | 5 years |
Note: When a drilling licence is located in more than one area, the term is the longer of the terms for the 2 areas.
[Provisions of the Petroleum and Natural Gas Act, R.S.B.C. 1996, c. 361, relevant to the enactment of this regulation: section 133 (2) (e)]
Copyright (c) 2004: Queen's Printer, Victoria, British Columbia, Canada