Alberta Regulation 189/2010

Municipal Government Act

DETERMINATION OF POPULATION AMENDMENT REGULATION

Filed: November 16, 2010

For information only: Made by the Minister of Municipal Affairs (M.O. L:249/10)

on November 8, 2010 pursuant to

section 604 of the Municipal Government Act.

1 The Determination of Population Regulation (AR

63/2001) is amended by this Regulation.

Section 7 is amended by striking out "January 31, 2011"

and substituting "January 31, 2013".

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Alberta Regulation 190/2010

Municipal Government Act

MAJOR CITIES INVESTMENT AMENDMENT REGULATION

Filed: November 22, 2010

For information only: Made by the Minister of Municipal Affairs (M.O. L:237/10)

on November 15, 2010 pursuant to

section 250 of the Municipal Government Act.

1 The Major Cities Investment Regulation (AR 249/2000) is

amended by this Regulation.

Section 2 is amended

(

a) in clauses (

c) and (

d) by striking out "if the securities

are rated by at least one of the rating agencies listed in

section 3 with a rating that is equivalent to the ratings set out

section 4,";

(

b) in clause (

f) by striking out "if the debt placements are

rated by at least one of the rating agencies listed in

section 3

with a rating that is equivalent to the ratings set out in

section

4,".

3 Sections 3 and 4 are repealed.

4 The Investment Regulation (AR 66/2000) is amended in

section 2(1)(a)(ii) by striking out "the municipality is a

municipality as defined in the Major Cities Investment Regulation

(AR 249/2000) or".

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Alberta Regulation 191/2010

Municipal Government Act

MUNICIPAL FINANCE CLARIFICATION REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 404/2010)

on November 24, 2010 pursuant to

section 603 of the Municipal Government Act.

Table of Contents

Definitions

2 Annual budget

3 Total expenditures

4 Accumulated surplus

5 Expiry

6 Coming into force

Definitions

1 In this Regulation,

(a) "accounting standards" means the generally accepted

accounting principles for municipal governments

recommended from time to time by the Canadian Institute of

Chartered Accountants, including any recommendations of

the Public Sector Accounting Board;

(b) "Act" means the Municipal Government Act;

(c) "amortization" and "tangible capital assets" have the same

meaning as in the Public Sector Accounting Handbook,

published by the Canadian Institute of Chartered

Accountants, as amended from time to time;

(d) "annual budget" means a combined operating budget and

capital budget for the calendar year determined on a basis

consistent with accounting standards and the requirements of

Part 8 of the Act.

Annual budget

2(1) For the 2009 and subsequent calendar years, a municipality may

adopt an annual budget in a format that is consistent with its financial

statements.

(2) For the purposes of sections 247 and 248 of the Act, the adoption

of an annual budget is equivalent to the adoption of an operating

budget under

section 242 of the Act and a capital budget under

section

245 of the Act.

Total expenditures

3 For the purposes of sections 243(3) and 244(1) of the Act, the total

expenditures referred to in those sections do not include any

amortization on tangible capital assets, unless the amortization

(

a) is an amount required to provide for amortization of the

tangible capital assets of a municipality's municipal public

utilities as defined in

section 28 of the Act, and

(

b) relates to at least one year of the 3-year period referred to in

section 244(1) of the Act.

Accumulated surplus

4(1) For the 2009 and subsequent calendar years, the accumulated

surplus net of equity in tangible capital assets as shown on a

municipality's audited annual financial statements must not be less

than zero.

(2) If for any given year a municipality has an accumulated surplus net

of equity in tangible capital assets that is less than zero in

contravention of subsection (1), the Minister may, if the Minister

considers it necessary to do so, establish that municipality's annual

budget for the next calendar year, and that annual budget

(

a) is for all purposes the municipality's annual budget for that

calendar year, and

(

b) may not be amended or replaced by council.

Expiry

5 This Regulation is made in accordance with

section 603(1) of the

Act and is subject to repeal in accordance with

section 603(2) of the

Act.

Coming into force

6 This Regulation comes into force on December 18, 2010.

Alberta Regulation 192/2010

Municipal Government Act

CALGARY INTERNATIONAL AIRPORT VICINITY PROTECTION

AREA AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 405/2010)

on November 24, 2010 pursuant to

section 693 of the Municipal Government Act.

1 The Calgary International Airport Vicinity Protection

Area Regulation (AR 177/2009) is amended by this

Regulation.

Schedule 3 is amended by adding the following after

section 3:

Cultural hall a permitted use

3.1 Despite any other provision of this Regulation, development

for a cultural hall is permitted within the NEF 35-40 and NEF 40+

Areas on Lot 6, Block 2, Plan 7911468 (subject to compliance with

the exterior acoustic insulation requirements of the Alberta Building

Code).

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Alberta Regulation 193/2010

Municipal Government Act

SUBDIVISION AND DEVELOPMENT AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 406/2010)

on November 24, 2010 pursuant to

section 694 of the Municipal Government Act.

1 The Subdivision and Development Regulation

(AR 43/2002) is amended by this Regulation.

2 The following is added after

section 18:

Approval by council not part of development

permit application

18.1 A development authority may not require, as a condition of a

completed development permit application, the submission to and

approval by council of a report regarding the development.

Alberta Regulation 194/2010

Marketing of Agricultural Products Act

ALBERTA PORK PRODUCERS' PLAN AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 408/2010)

on November 24, 2010 pursuant to

section 23 of the Marketing of Agricultural

Products Act.

1 The Alberta Pork Producers' Plan Regulation

(AR 219/2001) is amended by this Regulation.

Section 23 is amended by striking out "6" and

substituting "2".

Section 28 is repealed and the following is substituted:

Term of office

28 Subject to

section 43.1, the term of office of a Director or a

delegate is 3 years.

Section 29 is amended by striking out "3 consecutive terms"

wherever it occurs and substituting "2 consecutive terms".

Section 42(2) is amended by striking out "At each" and

substituting "Subject to

section 43.1, at each".

Section 43(1)(

b) is amended by striking out "first, 2nd, 3rd,

4th, 5th and 6th" and substituting "first and 2nd".

7 The following is added after

section 43:

Election of candidates from 2010 to 2012

43.1(1) The Corporation must hold elections during the district

annual meetings for the years 2010, 2011 and 2012 as follows:

(

a) District No. 3 is to elect 2 Directors and 2 delegates at the

2010 district annual meeting and every 3rd year thereafter;

(

b) District No. 2 is to elect 2 Directors and 2 delegates at the

2011 district annual meeting and every 3rd year thereafter;

(

c) District No. 1 is to elect 2 Directors and 2 delegates at the

2012 district annual meeting and every 3rd year thereafter.

(2) All districts must participate in the election of 2 Directors at

large at the 2012 district annual meeting and every 3rd year

thereafter.

Transitional provisions re terms of office

43.2(1) The unexpired term of office of a Director or a delegate of

District No. 3 elected prior to or in 2009 expires on the day before

the annual general meeting in 2010.

(2) The unexpired term of office of a Director or a delegate of

District No. 2 elected prior to or in 2009 expires on the day before

the annual general meeting in 2011.

(3) The unexpired term of office of a Director or a delegate of

District No. 1 elected prior to or in 2009 expires on the day before

the annual general meeting in 2012.

(4) The unexpired term of office of a Director at large elected prior

to or in 2009 expires on the day before the annual general meeting in

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Alberta Regulation 195/2010

Soil Conservation Act

SOIL CONSERVATION NOTICE AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 409/2010)

on November 24, 2010 pursuant to

section 25 of the Soil Conservation Act.

1 The Soil Conservation Notice Regulation (AR 272/98) is

amended by this Regulation.

Section 2 is amended

(

a) in clause (

a) by adding "and address" after "the name";

(

b) by adding the following after clause (a):

(a.1) the name and address of the owner of the property that

is the subject of the notice, if different from the person

referred to in clause (a);

(

c) in clause (

b) by adding ", or the global positioning

system coordinates, set out as latitude and longitude," after

"the legal description".

Section 5 is amended by striking out "November 30, 2010"

and substituting "November 30, 2020".

4 The

Schedule is repealed and the following is

substituted:

Schedule

Notice

(Under

section 4 of the Soil Conservation Act)

To (name of landholder) of (address of landholder) , Alberta.

You are hereby notified that part or the entire field, as designated by

the legal land description: ______ quarter(

s) of

Section ______

Township ______ Range ______ West of the ______ Meridian or by

the approximate location as expressed by the GPS latitude and

longitude coordinates:

as indicated on the accompanying diagram, is deteriorating due to

and you are hereby directed to take measures to prevent this

deterioration on or before the _________ hour _____ day of

_______________, ____.

The following Remedial measures are required:

Section

NW NE

SW SE

Approximate Location on Property

Name and address of land owner (if different than landholder above):

Date:

Soil Conservation Officer:

Municipality:

Address:

Phone:

If this notice is not complied with, action may be taken in accordance

with the provisions of the Soil Conservation Act.

You have the right to appeal this notice under

section 7 of the Soil

Conservation Act.

(See appeal procedure requirements on reverse side.)

Summary of Appeal Procedure

7(1) Where a notice is served on a person under

section 4, that person

may appeal the notice to the appeal committee appointed for the

municipality in which the land is located by serving on the local

authority for the municipality a notice of appeal.

(2) A notice of appeal is not effective unless it is served on the local

authority

(

a) within the period of time specified in the notice given under

section 4 for the commencement of the remedial measures set

out in the notice, or

(

b) before any remedial measures are commenced under

section

whichever is the later.

(3) Notwithstanding subsection (2), where

(

a) a notice is served on a person under

section 4 and the notice

requires that the remedial measures set out in the notice be

carried out within 72 hours or a shorter period of time after

the notice is served on the person, and

(

b) the remedial measures referred to in that notice were

commenced under

section 6,

that person may not later than 72 hours after the notice is served on the

person serve a notice of appeal on the local authority.

8 A notice of appeal must be in writing and shall

(

a) set out

(

i) the name of the appellant,

(ii) an address for service on the appellant,

(iii) the legal description of the land in respect of which the

appeal is being taken, and

(iv) the grounds of the appeal,

and

(

b) be accompanied with a deposit in the amount of $50.

For more details on the appeal procedures, consult the Soil

Conservation Act. A copy will be available for viewing at your local

Agricultural Service Board office or may be purchased from Alberta

Queens's Printer, either from the website (http://www.qp.alberta.ca) or

by contacting the Alberta Queen's Printer office at 780-427-4952.

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Alberta Regulation 196/2010

Mines and Minerals Act

OIL SANDS TENURE REGULATION, 2010

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 413/2010)

on November 24, 2010 pursuant to

section 5 of the Mines and Minerals Act.

Table of Contents

Interpretation

2 Designation as producing and non-producing

3 Minimum level of evaluation

Part 1

Oil Sands Agreements

4 Rights conveyed

5 Maximum area

6 Rental

7 Term of permit

8 Application for lease issued out of permit

9 Rules for issuing leases out of permits

10 Notice of refusal to issue lease

11 Application for primary lease out of first term oil sands lease

12 Term of primary lease

Part 2

Continued Leases

13 Continuation of primary leases and deemed primary leases

14 Continuation of existing oil sands leases

15 Transfer of oil sands lease location

16 Authority to transfer continued lease

17 Liability to pay escalating rental

18 Determination of escalating rental

19 Timing of costs

20 Research costs

21 Exploration costs

22 Development costs

23 Documentation respecting costs

24 Maintenance of records

25 Upgrader credits

26 Change of designation to producing

27 Change of designation to non-producing

Part 3

Ministerial Notices and Directions

28 Notice respecting production

29 Obligation to comply

30 Other minerals in oil sands

Part 4

Transitional, Repeal, Expiry and

Coming into Force

31 Transitional

32 Repeal

33 Expiry

34 Coming into force

Schedules

Interpretation

1(1) In this Regulation,

(a) "Act" means the Mines and Minerals Act;

(b) "appropriate minimum level of evaluation" means

(

i) if

section 8(2) or 13(2) is applicable, the minimum level

of evaluation requested by the permittee under

section

8(2) or by the lessee under

section 13(2), or

(ii) if

section 9(1)(d), 13(3)(d), 14(4)(

c) or 15(

b) is

applicable, the minimum level of evaluation determined

or prescribed by the Minister under

section 9(1)(d),

13(3)(d), 14(4)(

c) or 15(b);

(c) "Board" means the Energy Resources Conservation Board;

(d) "continued lease" means a primary lease or deemed primary

lease that is continued under

section 13, an existing oil sands

lease that is continued under

section 14 or a lease that is

continued under

section 13 of the Oil Sands Tenure

Regulation (AR 50/2000);

(e) "crude bitumen" means a viscous mixture, mainly of

hydrocarbons heavier than pentanes, that may contain

sulphur compounds and that is obtained from oil sands;

(f) "deemed primary lease" includes

(

i) a second term oil sands lease, other than a second term

oil sands lease that is subject to a development plan

approved under

section 9 of the former Oil Sands

Regulation,

(ii) an oil sands lease issued out of a permit pursuant to the

former Oil Sands Regulation, and

(iii) an oil sands development lease issued pursuant to

section 13 of the former Oil Sands Regulation;

(g) "development" means all activities undertaken on the

location of a lease, following the date an oil sands well has

been drilled in every quarter

section or part of a quarter

section in the location of an oil sands agreement, that bring

the oil sands agreement up to the point of production,

including, without limitation, the drilling of development

wells on the location of the oil sands agreement, but before

the point of actual recovery of oil sands or crude bitumen

from the location of the oil sands agreement;

(h) "development well" means an oil sands well drilled on a

quarter

section or part of a quarter

section in the location of

an oil sands agreement, the drilling of which commences

following the date an oil sands well has been drilled in every

quarter

section or part of a quarter

section in the location of

that oil sands agreement;

(i) "escalating rental" means the amount calculated pursuant to

Part 2 that must be paid in respect of each term year of a

continued lease that is designated as non-producing;

(j) "evaluation well" means, in respect of the minimum level of

evaluation requirements under sections 3(1) and 9(2), a well

that is drilled and logged for the purposes of evaluating, in

their entirety, each of the oil sands zones granted pursuant to

an oil sands agreement, regardless of whether that well was

drilled for purposes of producing oil, gas or crude bitumen;

(k) "existing oil sands lease" means a first term oil sands lease,

second term oil sands lease or third term oil sands lease;

(l) "exploration" means all activities undertaken to identify the

existence of an oil sands deposit and to determine the

thickness and areal extent of an oil sands deposit, including,

without limitation, the drilling of exploration wells on the

location of an oil sands agreement, that commence prior to

the date an oil sands well has been drilled in every quarter

section or part of a quarter

section in the location of that oil

sands agreement;

(m) "exploration well" means each oil sands well drilled on the

location of an oil sands agreement, the drilling of which

commences before an oil sands well has been drilled in every

quarter

section in the location of that oil sands agreement;

(n) "feedstock bitumen" means crude bitumen that is inputted

into an upgrader for processing and measured at the inlet of

the upgrader;

(o) "first term oil sands lease" means a lease of oil sands rights

that is in force before March 8, 2000 and has been issued

pursuant to one of the following repealed regulations, but

does not include a lease issued on the renewal of a lease:

(

i) the Oil Sands Regulation, 1978 (AR 317/78);

(ii) the Oil Sands Regulations, 1969 (AR 298/69);

(iii) the Oil Sands Regulations, 1962 (AR 378/62);

(iv) the Bituminous Sands Regulations, 1962 (AR 342/62);

(

v) The Oil Sands Regulations (AR 144/61);

(vi) Regulations Governing Disposition of Bituminous Sands

Rights the Property of the Crown (AR 333/57);

(p) "former Oil Sands Regulation" means the Oil Sands

Regulation (AR 228/91) that was repealed by the Oil Sands

Tenure Regulation (AR 50/2000);

(q) "lease" means an agreement issued in the form of a lease that

grants rights in respect of oil sands;

(r) "lessee" means the holder of a lease according to the records

of the Department;

(s) "oil sands" has the meaning given to it in

section 1(1) of the

Act;

(t) "oil sands agreement" means a permit or a lease;

(u) "oil sands product" has the meaning given to it in

section

1(1)(

u) of the Oil Sands Royalty Regulation, 2009

(AR 223/2008);

(v) "oil sands well" means a well licensed by the Board for the

purpose of evaluating or producing from an oil sands zone or

zones;

(w) "oil sands zone" means a zone or formation that, in the

opinion of the Minister, potentially contains crude bitumen;

(x) "permit" means an agreement issued in the form of a permit

that grants rights in respect of oil sands;

(y) "permittee" means the holder of a permit according to the

records of the Department;

(z) "primary lease" means

(

i) a lease issued out of a permit in accordance with this

Regulation,

(ii) a lease issued as a result of an application under

section

11, or

(iii) any other lease that is issued under

section 16 of the Act

on or after March 8, 2000,

but does not include a deemed primary lease;

(aa) "producing", as it relates to the designation of a lease, means

a minimum level of production established by the Minister

pursuant to

section 13(4);

(bb) "second term oil sands lease" means a lease of oil sands

rights that, prior to March 8, 2000, was issued on the renewal

of a first term oil sands lease and is in force;

(cc) "surface mineable oil sands area" means

(

i) an area identified or defined as such by the Board, and

(ii) any amendment made from time to time to that area by

the Board, whether by addition to or substitution for the

lands within that area or otherwise;

(dd) "term year" means the first 12 consecutive months following

the commencement of the term of an oil sands agreement and

each consecutive 12-month period thereafter, ending on the

expiry date of the oil sands agreement;

(ee) "third term oil sands lease" means a lease of oil sands rights

that, prior to March 8, 2000, has been issued on the renewal

of a second term oil sands lease and is in force;

(ff) "upgrader" means a facility for upgrading that is located on

the surface of land in Alberta;

(gg) "upgrading" means any process whereby the American

Petroleum Institute gravity of feedstock bitumen is increased,

but does not include

(

i) any in situ process whereby the American Petroleum

Institute gravity of crude bitumen is increased prior to

its recovery, or

(ii) any process whereby the American Petroleum Institute

gravity of feedstock bitumen is increased solely through

the addition of diluent.

(2) For the purposes of this Regulation, a person is affiliated with

another person if, under subsection 1206(5) of the Income Tax

Regulations under the Income Tax Act (Canada), the person is

considered to be connected with the other person, but in making that

determination, paragraph 1206(5)(

a) shall be read as if it were replaced

by the following:

(

a) a person and another person (in this paragraph referred to as

"that other person") are connected with each other if

(

i) the person and that other person are not dealing at arm's

length,

(ii) the person has an equity percentage in that other person

that is not less than 10%, or

(iii) where the person is a corporation, the corporation and

that other person are linked by another person who has

an equity percentage in each of them of not less than

10%;

(3) For the purposes of subsection (2)(a)(i), persons are not dealing at

arm's length with each other if, under the Income Tax Act (Canada),

they would not be considered to be dealing at arm's length.

(4) For the purposes of this Regulation, other than subsection (2)(a)(i),

a transaction is, subject to subsection (5), a non-arm's length

transaction if

(

a) a party to the transaction is affiliated with any other party to

the transaction,

(

b) any party to the transaction is in a position to compel any

other party to the transaction to enter into the transaction, or

(

c) the consideration for any party under the transaction is in

whole or in part based on or tied to

(

i) any other contractual or other obligation with another

party to the transaction, or

(ii) any consideration under a contractual or other

obligation described in subclause (i),

but does not include any transaction to which the only parties

are the Crown and another party.

(5) Despite subsection (4), the Minister may, on application by a

lessee or on the Minister's own initiative, determine that a transaction

is an arm's length transaction or non-arm's length transaction.

(6) The Minister may revoke a determination made under subsection

(5) effective as of the date of any change in the circumstances relied on

by the Minister to make the determination or as of any later date.

(7) For the purposes of this Regulation, other than subsection (2)(a)(i),

a transaction is an arm's length transaction if it is not a non-arm's

length transaction under subsection (4) or so long as it is determined

by the Minister to be an arm's length transaction pursuant to a

subsisting determination under subsection (5).

Designation as producing and non-producing

2 A reference in this Regulation to a lease

(

a) that has been designated as producing includes a lease that is

deemed to have been designated as producing, and

(

b) that has been designated as non-producing includes a lease

that is deemed to have been designated as non-producing.

Minimum level of evaluation

3(1) In an application by a permittee pursuant to

section 8(1), or a

lessee pursuant to

section 13(1) ("the applicant"), the applicant may

meet the minimum level of evaluation required for issuance of a lease

pursuant to

section 9(1), or for continuation of a lease pursuant to

section 13(3), by evaluating each of the oil sands zones within the area

that is the subject of the application in accordance with subsection

(2) or (3) or in accordance with the requirements approved by the Minister

under subsection (8).

(2) For the purpose of this subsection, and subject to subsections (8),

(9), (10), (12), (13) and (14), the minimum level of evaluation in

respect of an application under subsection (1) consists of

(

a) the drilling of at least one evaluation well in each

section and

parts of sections referred to in the application,

(

b) the evaluation wells being located in a pattern that, in the

opinion of the Minister, is sufficiently even and uniform, and

(

c) obtaining data from the oil sands zone or zones from

evaluation wells from at least 25% of the sections or parts of

sections on which at least one evaluation well is located by

coring through each of the oil sands zones, in their entirety,

within the locations of those evaluation wells and submitting

that data to the Department.

(3) For the purpose of this subsection, and subject to subsections (8),

(9), (10), (12), (13) and (14), the minimum level of evaluation in

respect of an application under subsection (1) consists of

(

a) the drilling of evaluation wells in not less than 60% of the

sections and parts of sections referred to in the application,

(

b) the evaluation wells being located in a pattern that, in the

opinion of the Minister, is sufficiently even and uniform,

(

c) obtaining data from the oil sands zone or zones from

evaluation wells from at least 25% of the sections or parts of

sections in the application by coring through the oil sands

zone or zones, in their entirety, within the location of those

evaluation wells and submitting that data to the Department,

and

(

d) obtaining, from within each

section or part of a

section

referred to in the application in which an evaluation well was

not drilled, seismic data in accordance with subsection (6) or

electromagnetic data in accordance with subsection (7) and

submitting that data to the Department.

(4) An application by a permittee shall also be subject to the

requirements set forth in

section 9(2).

(5) For the purpose of this section, if

(

a) crude bitumen was produced from one or more oil sands

zones in the

section or part of a

section within the location of

the oil sands agreement and in which a substantial portion of

the perforated sections of the borehole of the producing oil

sands well is situate, and

(

b) the production referred to in clause (

a) was at a level equal to

or greater than the level and duration of production the

Minister has established pursuant to

section 13(4) for the

purpose of designating a lease as a continued lease,

the Minister shall, in respect of that producing well, waive the

requirement under subsections (2)(

a) and (3)(

a) for that well to be

drilled through the oil sands zones, and the Minister shall waive the

requirement under subsections (2)(

c) and (3)(

c) to core the oil sands

zone and deem the producing oil sands well as having satisfied the

requirements of an evaluation well.

(6) Seismic data referred to in subsection (3)(

d) must be obtained in

accordance with the following requirements:

(

a) there must be 3.2 kilometres of seismic line in each

section

referred to in subsection (3)(

d) and a length of seismic line in

each part of a

section that is in the same ratio to 3.2

kilometres that the part of the

section is in area to a section;

(

b) the seismic lines must have a fold and a station and group

interval adequate, in the opinion of the Minister, to image the

crude bitumen reservoir and the immediately underlying

strata;

(

c) the seismic lines must be tied to the evaluation wells in a

manner and to an extent that the Minister considers adequate.

(7) Electromagnetic data referred to in subsection (3)(

d) must be

obtained in accordance with the following requirements:

(

a) the

section or part of a

section from within which it is

obtained must be within an area that the Board has

determined to be a surface mineable oil sands area or must be

approved by the Minister as a site from within which

electromagnetic data may be obtained;

(

b) each

section or part of a

section from within which

electromagnetic data is obtained must be evaluated to the

base of the deepest part of the deepest oil sands zone in the

section or the part of a section.

(8) The Minister may prescribe a proposed minimum level of

evaluation that differs from that established under subsection (2) or

(3) by waiving or varying any of the requirements established under

subsection (2) or (3), or by imposing requirements that are in addition

to those requirements.

(9) If an applicant is of the opinion that the minimum level of

evaluation requirements established under subsection (2) or (3) cannot

reasonably be applied in respect of a portion of a given permit or lease,

as the case may be, and the applicant is of the opinion that an

alternative methodology is available that will satisfy the requirements

of subsection (2) or (3), the applicant may apply to the Minister for

approval of the applicant's proposed methodology for making such an

allocation.

(10) The Minister may approve an applicant's proposed methodology

for evaluation if

(

a) the application under subsection (9) is received by the

Minister before both

(

i) the last term year of the agreement that is subject to the

application, and

(ii) the evaluation wells required to be drilled under

subsection (2) or (3) and that form part of the

application under subsection (9) have commenced

drilling,

(

b) the application is accompanied by technical information

supporting the application, demonstrating, to the Minister's

satisfaction, why the requirements established under

subsection (2) or (3) cannot reasonably be applied in respect

of that portion of the given agreement,

(

c) the Minister is satisfied that the requirements established

under subsection (2) or (3) cannot reasonably be applied to

the portion of the given agreement, and

(

d) the Minister is satisfied that approving the methodology

proposed by the applicant will allow the portion of the given

agreement to be reasonably evaluated.

(11) Within 120 days of receiving an application under subsection (9),

the Minister shall provide to the applicant a written notice advising the

applicant of the Minister's determination.

(12) If an applicant is of the opinion that one or more oil sands zones

may be absent within a

section or part of a

section of an oil sands

agreement, the applicant may apply to the Minister to waive or vary

either or both of the drilling and coring requirements under subsections

(2) or (3).

(13) An application pursuant to subsection (12) must be supported by

technical information supporting the applicant's application.

(14) The Minister may approve an application made pursuant to

subsection (12) if the Minister is satisfied that one or more oil sands

zones are absent in the sections or parts of sections to which the

application relates.

(15) Within 120 days of receiving an application under subsection

(12), the Minister shall provide to the applicant a written notice

advising the applicant of the Minister's determination.

Part 1

Oil Sands Agreements

Rights conveyed

4 An oil sands agreement conveys the exclusive right to drill for, win,

work, recover and remove oil sands that are the property of the Crown

(

a) within the location of the agreement, or

(

b) if the agreement relates to one or more specified zones, in the

specified zone or zones within the location,

Maximum area

5 The maximum area of the location of an oil sands agreement issued

under this Regulation is 9216 hectares, but the boundaries of the area

are in the discretion of the Minister.

Rental

6 The annual rental for a term year of an oil sands agreement is

(

a) the amount payable at the rate prescribed in the Mines and

Minerals Administration Regulation (AR 262/97), and

(

b) any escalating rental payable under

Part 2.

Term of permit

7 The term of a permit is 5 years.

Application for lease issued out of permit

8(1) A permittee may, during the term of the permit, apply for one or

more primary leases of oil sands rights in the location of the permit as

follows:

(

a) application for a single primary lease, if the location of that

lease comprises the entire location of the permit;

(

b) application for a single primary lease, if the location of that

lease does not include the entire location of the permit, but

where each

section or part of a

section in the lease being

applied for adjoins or corners with at least one other

section

or part of a

section within the lease being applied for;

(

c) applications for 2 or more primary leases, if the

amalgamation of the locations of those leases does not

include the entire location of the permit and if, for each lease

being applied for, each

section or part of a

section adjoins or

corners with at least one other

section or part of a

section

within the lease being applied for;

(

d) applications for 2 or more primary leases, if the

amalgamation of the locations of those leases comprises the

entire location of the permit and if, for each lease being

applied for, each

section or part of a

section adjoins or

corners with at least one other

section or part of a

section

within the lease being applied for.

(2) The permittee must set out in each application the minimum levels

of evaluation established under

section 3 that the permittee wishes to

have applied in respect of the oil sands in the sections or parts of

sections to which the application pertains.

(3) Each application must be accompanied by one or more technical

reports containing the information and data that the Minister considers

necessary to determine whether the appropriate minimum level of

evaluation in respect of that application has been met.

(4) If a permittee is relying on a producing well described in

section

3(5) to satisfy the minimum level of evaluation requirements

established under

section 3(2) or (3), the permittee must provide all

production data in respect of that well that arose during the term of the

oil sands agreement to the time the application is made.

(5) If the Minister approves an application for a primary lease under

subsection (1) after the term of the permit has expired, the term of the

permit is deemed to be continued and the commencement date of the

resulting primary lease is deemed to be the expiry date of the permit

from which it arose.

(6) Any application received by the Minister under

section 8(1) of the

Oil Sands Tenure Regulation (AR 50/2000) to have a primary lease of

oil sands rights issued in the location of a permit for which the

Minister has not made a decision on or before November 30, 2010

shall be considered to be an application received by the Minister under

subsection (1).

Rules for issuing leases out of permits

9(1) The following rules apply in respect of the issuance of a primary

lease out of a permit:

(

a) the Minister shall refuse to issue a primary lease out of a

permit if

(

i) in the application for issuance of the primary lease the

permittee has not indicated the sections and parts of

sections to which the application pertains, or

(ii) the application is not accompanied by a technical report

containing the information and data that the Minister

considers necessary to determine whether the

appropriate minimum level of evaluation has been met;

(

b) a primary lease shall not be issued out of a permit unless the

Minister is satisfied with the configuration of the primary

lease or leases and of the sections and parts of sections that

may be contained in the location of the primary lease or

leases that results from the application of clause (e);

(

c) if the sections or parts of sections referred to in clause (a)(

i) do not corner or are not laterally adjoining, those sections or

parts of sections may be issued out of a permit only as the

location of separate primary leases, and will be ascribed or

attributed to those locations by the Minister for the purpose

of clause (

e) and

section 3;

(

d) if no minimum level of evaluation is requested under

section

8(2), or when such a request is made and the Minister

disagrees in whole or in part with the request, the Minister

shall, subject to

section 3(8), (9), (10), (12), (13) and (14),

determine whether either minimum level of evaluation or the

alternate methodology minimum level of evaluation, as the

case may be, can be satisfied in respect of the oil sands in the

sections and parts of sections to which the application

pertains;

(

e) a primary lease may be issued by the Minister out of a permit

if, and to the extent that, the permittee has, in the opinion of

the Minister, attained the appropriate minimum level of

evaluation in the sections and parts of sections approved for

or attributed or ascribed to the location of the primary lease

by the Minister under this section.

(2) In determining the extent or degree to which the appropriate

minimum level of evaluation has been attained in respect of an

application by a permittee under

section 8(1), the Minister may refuse

to take into consideration, for the purpose of subsection (1)(e), any of

the following that did not occur during the term of the permit:

(

a) the date on which the drilling of any evaluation well was

completed;

(

b) any coring through oil sands zones and obtaining data from

such coring;

(

c) any well referred to in

section 3(5) that did not produce crude

bitumen at a level equal to or greater than the level of

production the Minister has established under

section 13(4)

for the purpose of designating a lease as a continued lease;

(

d) any well referred to in

section 3(5) that did not produce

between the start of the term of the permit and the date the

application under

section 8 is made to the Minister;

(

e) the acquiring, processing or reprocessing of seismic data or

electromagnetic data.

Notice of refusal to issue lease

10(1) If the Minister refuses to issue a primary lease out of a permit

pursuant to

section 9, the Minister shall forthwith give to the applicant

a written notice advising the applicant of the reasons for the refusal

and specifying the period of time within which the permittee is entitled

to respond to the notice.

(2) If

(

a) the permittee does not respond to a notice given by the

Minister under subsection (1) within the period of time

specified in the notice, or

(

b) the Minister disagrees with a response given by a permittee,

the Minister's decision to refuse to issue a primary lease out of a

permit is final.

(3) If, prior to December 1, 2010, a permittee has not responded to a

notice provided by the Minister under

section 10(1) of the Oil Sands

Tenure Regulation (AR 50/2000), and the period of time specified in

the notice has not expired, that period of time will continue as if it

were provided in a notice from the Minister under subsection (1).

Application for primary lease out of first term oil sands lease

11(1) A lessee of a first term oil sands lease may,

(

a) within the last term year of the lease, or

(

b) with the consent of the Minister, at any time before the last

term year of the lease,

apply to the Minister for a primary lease of oil sands rights in the

location of the first term oil sands lease.

(2) If the Minister receives an application under subsection (1), the

Minister shall issue the primary lease with a term that begins at the end

of the term of the first term oil sands lease.

(3) An application received by the Minister under

section 11(1) of the

Oil Sands Tenure Regulation (AR 50/2000) to have primary lease of

oil sands rights issued in the location of a first term oil sands lease for

which the Minister has not made a decision on or before November 30,

2010 shall be considered to be an application received by the Minister

under subsection (1).

Term of primary lease

12(1) The term of a primary lease is 15 years.

(2) The term of a deemed primary lease that is an oil sands

development lease issued under

section 13 of the former Oil Sands

Regulation is extended from 10 years to 15 years.

(3) The term of any deemed primary lease other than an oil sands

development lease or a first term oil sands lease is not changed by this

Regulation.

Part 2

Continued Leases

Continuation of primary leases and deemed primary leases

13(1) A lessee of a primary lease or a deemed primary lease may

(

a) within the last term year of the lease, or

(

b) with the consent of the Minister, at any time before the last

term year of the lease,

apply to the Minister for approval of the continuation of the lease

pursuant to this section.

(2) A lessee may, in an application under subsection (1), request from

among the minimum levels of evaluation established under

section

3(2) or (3) the minimum level of evaluation that the lessee wishes to

have applied in respect of the oil sands in the sections or parts of

sections to which the application pertains.

(3) The following rules apply in respect of the continuation of a

primary lease or a deemed primary lease:

(

a) the Minister shall refuse to continue a primary lease or

deemed primary lease if

(

i) in the application for continuance of the primary lease

or deemed primary lease the lessee has not indicated the

sections and parts of sections to which the application

pertains, or

(ii) the application is not accompanied by a technical report

containing the information and data that the Minister

considers necessary to determine whether the

appropriate minimum level of evaluation has been met;

(

b) a primary lease or deemed primary lease shall not be

continued unless

(

i) the Minister has determined the sections and parts of

sections that may be continued pursuant to clause (e),

and

(ii) the Minister is satisfied with the configuration of the

continued lease or leases and of the sections and parts of

sections that may be continued in the location of that

lease or those leases that results from the application of

clause (e);

(

c) if the sections or part of sections referred to in clause (a)(

i) do not corner or are not laterally adjoining, those sections or

parts of sections may be issued out of a primary lease or

deemed primary lease only as the location of separate

continued leases, and will be ascribed or attributed to those

locations by the Minister for the purpose of clause (

e) and

section 3;

(

d) if no minimum level of evaluation is requested under

subsection (2), or when such a request is made and the

Minister disagrees in whole or in part with the request, the

Minister shall, subject to

section 3(8), (9), (10), (12),

(13) and (14), determine whether either minimum level of

evaluation set forth in

section 3(2) or (3) or the minimum

level of evaluation under

section 3(2) or (3) that was not

applied for, as the case may be, can be satisfied in respect of

the oil sands in the sections and parts of sections to which the

application pertains;

(

e) a continued lease may be issued by the Minister out of a

primary lease or a deemed primary lease

(

i) if, and to the extent that, the lessee has, in the opinion of

the Minister, attained the appropriate minimum level of

evaluation in the sections and parts of sections approved

for or attributed or ascribed to the location of the

continued lease by the Minister under this section, and

(ii) if the lessee has provided to the Minister all production

data in respect of those sections or parts of sections.

(4) The Minister may designate a continued lease as producing or

non-producing and may establish a minimum level of production,

including the duration of production, required for the designation of a

continued lease as producing for the purpose of subsection (5) and

section 26(2), which minimum level of production may differ among

geological zones or geographical areas, or both.

(5) Where the Minister has made a determination under subsection

(3)(e), the Minister shall, through a written notice to the lessee,

(

a) designate the sections and parts of sections of the primary

lease or deemed primary lease that are continued,

(

b) indicate the continued lease in which those sections and parts

of sections will be contained, and

(

c) indicate whether each continued lease is designated as

producing or non-producing.

(6) If the perforated portions of a borehole of a producing well

intersect 2 or more agreements, the production from the well shall be

allocated to each of those agreements

(

a) equally, if the Minister is of the opinion that the distribution

of the perforated portions is reasonably equal between or

among the agreements, or

(

b) in a manner that in the Minister's opinion best approximates

the recovery contributed from each agreement to the total

production of the well, considering any technical information

readily available to the Minister, including that submitted by

the lessee in support of an allocation.

(7) If a lessee of a primary lease or deemed primary lease does not

apply to continue the lease on or before its term expires, the lease

expires at the end of its term and any right of renewal is extinguished.

(8) An application received by the Minister under

section 13(1) of the

Oil Sands Tenure Regulation (AR 50/2000) to have a lease continued

for which the Minister has not made a decision on or before November

30, 2010 shall be considered to be an application received by the

Minister under subsection (1).

Continuation of existing oil sands leases

14(1) Second term oil sands leases that are subject to a development

plan approved under

section 9 of the former Oil Sands Regulation and

third term oil sand leases are, as of March 8, 2000,

(

a) continued leases, and

(

b) deemed to be designated as producing.

(2) For the purpose of subsection (3), if a development plan has been

altered following the approval under

section 9 of the former Oil Sands

Regulation, the revised development plan the Minister has most

recently consented to in writing is the development plan referred to in

that subsection.

(3) If the lessee of a lease continued under subsection (1) that is

subject to a development plan fails to comply with and meet the

milestones in the development plan or alters the development plan

without the prior written consent of the Minister, the Minister may

cancel any part or parts of the location of that lease then being held as

a result of the attribution of crude bitumen reserves to the development

plan.

(4) If a lease that is subject to a development plan is transferred,

(

a) the lease ceases, effective as of the date of registration of the

transfer, to be continued or to be designated as producing

pursuant to subsection (1),

(

b) effective as of the date of registration of the transfer, the

lease is a deemed primary lease and, except to the extent they

are inconsistent with this section, is subject to the provisions

of this Regulation that pertain to deemed primary leases,

(

c) the Minister shall, from among the minimum levels of

evaluation established under

section 3, determine if either of

the appropriate minimum level of evaluation criteria is met in

respect of the oil sands in the location of the lease,

(

d) if the appropriate minimum level of evaluation described in

clause (

c) has not been achieved, the Minister shall give a

notice in writing to the transferee stating that, within one year

from the date of the notice, the transferee must provide proof

satisfactory to the Minister that the appropriate minimum

level of evaluation has been achieved in the location of the

lease, and

(

e) if, at the end of the one-year period referred to in clause (d),

the transferee does not provide the proof required by clause

(d), the Minister shall cancel the lease.

(5) Subject to sections 15 and 16, if part of the location of a lease that

is subject to a development plan is transferred,

(

a) the lease issued for the part of the location ("the partial

location lease") ceases, effective as of the date of registration

of the transfer, to be continued or to be designated as

producing pursuant to subsection (1),

(

b) the partial location lease is deemed a primary lease and is

subject to the provisions of this Regulation that pertain to

deemed primary leases, and

(

c) the partial location lease is subject to all of the provisions and

requirements of this section.

Transfer of oil sands lease location

15 If part of the location of a lease situated within a surface mineable

oil sands area is transferred,

(

a) effective as of the date of registration of the transfer, the

partial location lease is a deemed primary lease and, except

to the extent that they are inconsistent with this section, is

subject to the provisions of this Regulation that pertain to

deemed primary leases,

(

b) the Minister shall, from among the minimum levels of

evaluation established under

section 3, determine if either of

the appropriate minimum level of evaluation criteria is met in

respect of the oil sands in the location of the partial location

lease,

(

c) if the appropriate minimum level of evaluation described in

clause (

b) has not been achieved, the Minister may give a

notice in writing to the transferee stating that, within one year

from the date of the notice, the transferee must provide proof

satisfactory to the Minister that the appropriate minimum

level of evaluation has been achieved in the location of the

partial location lease, and

(

d) if, at the end of the one-year period referred to in clause (c),

the transferee cannot provide the proof required by clause (c),

the Minister shall cancel the partial location lease.

Authority to transfer continued lease

16 Despite

section 14(4), 2 or more lessees holding 2 or more

continued leases, the locations of which are within the surface

mineable oil sands areas and are designated as producing under

section

13(4) or deemed to be designated as producing under

section 14(1)(b),

may transfer part of the location of those leases from one to the other

without creating a status for the agreements issued in respect of the

parts of the locations transferred that differs in any respect from the

status of the continued leases if, in the opinion of the Minister,

(

a) the potential reserves of oil sands held by the lessees under

the continued leases prior to the transfer of part of the

locations of those leases are approximately equivalent,

(

b) the transfers will result in the economic, orderly and efficient

development, and may result in an increase in the recovery,

of the potential reserves of oil sands held by the lessees under

the continued leases, and

(

c) if one or more of the continued leases are subject to a

development plan, the Minister is satisfied that

(

i) in each case of an agreement in respect of a partial

location being issued to a holder of a continued lease

that is subject to a development plan the agreement can

and will be consolidated into the continued lease, and

(ii) the consolidation of an agreement in respect of a partial

location into a continued lease will not affect the

milestones in the development plan that includes the

continued lease.

Liability to pay escalating rental

17(1) The lessee of a continued lease that is designated as

non-producing is liable to pay to the Crown an escalating rental

calculated under

section 18.

(2) Subject to section (3), escalating rental for a term year of a lease is

due and payable 30 days after the last day of that term year.

(3) If a lease that is subject to the payment of escalating rental is

cancelled during a term year of that lease, the escalating rental for that

term year will be calculated as the quotient of the number of days in

that term year during which the lease was subsisting prior to

cancellation divided by 365 and multiplied by the escalating rental for

that lease for that term year.

(4) Section 20 of the Mines and Minerals Administration Regulation

(AR 262/97) does not apply to escalating rental.

Determination of escalating rental

18(1) For the purposes of this section,

(a) "Area A" means those areas defined by the Board as the

Peace River Oil Sands Area and the Athabasca Oil Sands

Area, excepting from the Athabasca Oil Sands Area

(

i) the lands identified by the Board as surface mining

areas, and

(ii) that block of land that is between ranges 16 and 26

inclusive and townships 76 and 86 inclusive, west of the

4th Meridian;

(b) "Area B" means the area defined by the Board as the Cold

Lake Oil Sands Area, those lands identified by the Board as

the surface mining areas of the Athabasca Oil Sands Area

and that block of land that is between ranges 16 and 26

inclusive and townships 76 and 86 inclusive, west of the 4th

Meridian.

(2) Subject to sections 20 to 25, the escalating rental is,

(

a) in respect of each term year of the first 3-term year period of

a continued lease that is not designated as a producing lease,

an amount calculated at the rate set out in subsection (3) for

each hectare in the area of the location of the lease, and

(

b) in respect of each term year of each subsequent 3-term year

period of a continued lease that is not designated as a

producing lease, an amount for each hectare in the area of the

location of the lease that is the lesser of

(

i) an amount calculated at a rate that is double the amount

per hectare for the immediately preceding 3-term year

period of the continued lease, and

(ii) $96, where the hectare or part of the hectare is in Area

A or $224, where the hectare or part of the hectare is in

Area B,

minus the research costs, exploration costs and development costs that

qualify and are eligible for application in the calculation of escalating

rental under sections 20, 21, 22 and 23 and

Schedule 1.

(3) The rate referred to in subsection (2)(

a) is

(a) $3.00 per hectare, where the hectare or part of the hectare is

in Area A, and

(b) $7.00 per hectare, where the hectare or part of the hectare is

in Area B.

(4) The calculation of escalating rental payable in respect of a

continued lease

(

a) that has been designated under

section 26 as producing, and

(

b) that is then designated as non-producing under

section 27

is an amount calculated at, and based on, the rate per hectare that was

being paid during the period when the lease was non-producing that

preceded the effective date of the change of designation under

section

Timing of costs

19(1) When a reference is made in

section 20, 21 or 22 or in

Schedule

1 to a cost being incurred, the cost is deemed to be incurred

(

a) if the cost is paid not more than 90 days after the date of the

invoice pertaining to the cost, in the earlier of

(

i) the month in which the cost is actually paid, or

(ii) the month in which the cost is payable,

and

(

b) if the cost is paid more than 90 days after the date of the

invoice pertaining to such cost, in the month in which the

cost is paid.

(2) Despite subsection (1), if, in connection with research, exploration

or development related to the location of a continued lease,

(

a) services or materials have been supplied by the lessee or an

affiliate of the lessee, and

(

b) no invoice is furnished to the Minister respecting those

services or materials,

the cost of the services or materials is deemed to be incurred either in

the month the services were supplied with respect to the location of the

continued lease or in the month the materials were received on the

location of the continued lease, as the case may be.

(3) In the event that a cost that would have been deductible from the

calculation of escalating rental under the Oil Sands Tenure Regulation

(AR 50/2000) is no longer deductible in the calculation of escalating

rental pursuant to this Regulation, that cost will continue to be

deductible in the calculation of escalating rental in accordance with the

provisions of the Oil Sands Tenure Regulation (AR 50/2000).

Research costs

20(1) A project is not a research project for the purpose of this

Regulation unless the particulars of the project have been set out to the

satisfaction of the Minister in a corporate budgetary document that has

been accepted and approved by the Minister.

(2) In this section, the term of a research project is

(

a) the actual number of years that the project is in effect up to a

maximum of 5 years, and

(

b) if the research project is operated for more than 5 years, any

5 consecutive years of the project that is selected by the

lessee for the purposes of this section.

(3) Research costs described in

Schedule 1 may be subtracted from the

amount otherwise calculated under

section 18 as escalating rental,

subject to the following rules:

(

a) the lessee of the continued lease or leases in respect of which

the research costs will be applied pursuant to this

section

must identify the leases in the corporate budgetary document

accepted and approved by the Minister under subsection (1);

(

b) if the research costs pertain to research conducted off the

location of the continued lease, the lessee must provide the

Minister with written reasons satisfactory to the Minister

supporting the technical rationale for conducting the research

off the location;

(

c) research costs incurred in a year of the term of a research

project may be used as a deduction in calculating escalating

rental in any term year of a continued lease that falls in whole

or in part within the term of the research project or the 2

years next following the term of the research project;

(

d) if, in the opinion of the Minister, the research costs incurred

in a year of the term of a research project pertain to research

that has a direct connection and application to one or more

continued leases that are subject to a development plan

("total yearly development plan research costs"), the portion

of those research costs that may be available for allocation

among continued leases that have been acquired after March

8, 2000 shall not exceed an amount equal to the difference

between

(

i) the total yearly development plan research costs, and

(ii) the total of the escalating rentals that would have been

payable under

section 18 in respect of continued leases

subject to the development plan from the location of

which no production was obtained during that year of

the term of the research project, calculated in respect of

the term year or term years of those continued leases

that fall within that year of the term of the research

project and as if those continued leases had been

designated by the Minister under this Regulation as

non-producing;

(

e) subject to clause (f), the research costs applied to reduce the

escalating rental must be incurred after the lease is continued;

(

f) costs incurred on research conducted during the last 5 term

years of a primary lease or deemed primary lease that would,

in relation to that lease, have been research costs if that lease

had then been a continued lease may be used as a deduction

in calculating escalating rental of any of the first 10 term

years of the lease after it is continued under

section 13;

(g) 2 or more continued leases may be identified as being pooled

for allocation of research costs from a research project

(

i) in the corporate budgetary document accepted and

approved by the Minister under

section 20(1), and

(ii) before a reduction in escalating rental is made;

(

h) if the Minister approves the pooling, research costs incurred

in a year of the research project may be allocated

(

i) to any term year or term years of any of the leases so

pooled that fall in whole or in part within the term of the

research project or within the 2 years next following the

term of the research project, and

(ii) in the calculation of the escalating rental attributed to

those term years of the pooled leases;

(

i) no item or portion of research costs may be applied in the

calculation of escalating rental more than once.

Exploration costs

21 Exploration costs described in

Schedule 1 may be subtracted from

the amount otherwise calculated under

section 18 as escalating rental,

subject to the following rules:

(

a) exploration costs incurred in a term year of a continued lease

may be used as a deduction in calculating escalating rental

attributed to that term year of the continued lease;

(

b) exploration costs can be used as a deduction in calculating

escalating rental attributed to a term year of a continued lease

only if, in the opinion of the Minister, the costs have been

physically incurred on the location of the lease or, in the

opinion of the Minister, for the exploration of the oil sands in

the location of the lease;

(

c) no item or portion of exploration costs may be used as a

deduction in calculating escalating rental more than once.

Development costs

22 Development costs described in

Schedule 1 may be subtracted

from the amount otherwise calculated under

section 18 as escalating

rental, subject to the following rules:

(

a) development costs incurred in a term year of a continued

lease may be used as a deduction in calculating escalating

rental attributed to that term year of the continued lease;

(

b) development costs can be used as a deduction in calculating

escalating rental attributed to a term year of a continued lease

only if, in the opinion of the Minister, the costs have been

physically incurred on the location of the lease or, in the

opinion of the Minister, for the development of the oil sands

in the location of the lease;

(

c) development costs physically incurred on the location of or,

in the opinion of the Minister, for the development of the oil

sands within the location of a primary lease or deemed

primary lease during the last 5 term years of the lease may be

used as a deduction in calculating escalating rental of any of

the first 10 term years of the lease after it is continued under

section 13;

(

d) no item or portion of development costs may be used as a

deduction in calculating escalating rental more than once.

Documentation respecting costs

23(1) The Minister shall reject any claim by a lessee for using a

research cost, exploration cost or development cost as a deduction in

calculating escalating rental if the claim is not supported by

documentation establishing, to the Minister's satisfaction, that

(

a) the cost is a research cost, exploration cost or development

cost as described in

Schedule 1, and

(

b) the research cost, exploration cost or development cost

qualifies for application in the calculation of escalating rental

pursuant to

section 20, 21 or 22.

(2) If the documentation submitted by the lessee does not support the

amount of the research costs, exploration costs or development costs

being claimed by the lessee in the calculation of escalating rental for a

term year of the lease, the Minister

(

a) may reject the lessee's claim for the amount of costs that are

not supported and require the lessee to submit further

documentation and records to support those amounts, or

(

b) subject to

section 47 of the Act, may recalculate the

escalating rental for the term year of the lease based on

documentation or information obtained pursuant to

(i)

section 24(2), or

(ii)

section 47 of the Act.

Maintenance of records

24(1) The lessee must keep and maintain, and shall ensure that

persons that are affiliated with or are agents of the lessee keep and

maintain, records satisfactory to the Minister

(

a) relating to the research costs, exploration costs and

development costs that have been claimed in respect of a

term year of the lease under sections 20, 21 and 22 and

Schedule 1, and

(

b) relating to, or used in connection with, any application, report

or statement permitted or required to be submitted or

furnished under this Regulation.

(2) The lessee must, on request of the Minister, submit to the Minister

any of the records described in subsection (1) or any information that

is the subject of the request.

Upgrader credits

25(1) A lessee who is upgrading crude bitumen derived from the oil

sands within the location of the lessee's lease using either the lessee's

upgrader or, under written contract, another person's upgrader may

apply to the Minister for an upgrader credit.

(2) The Minister may award upgrader credits, determined in

accordance with the formula in

Schedule 2, to a lessee who has

submitted an application under subsection (1), and the lessee may

reduce the hectares of a continued lease for which an escalating rental

is payable in an amount equal to the number of upgrader credits

awarded.

(3) Despite anything in this section, bitumen or crude bitumen

produced from a lease that was a second term oil sands lease that is

subject to a development plan approved under

section 9 of the former

Oil Sands Regulation is not eligible for upgrader credits unless it is

bitumen or crude bitumen that exceeds the level of production

approved by the development plan for the lease.

(4) Subject to subsection (5), a lessee may apply the lessee's upgrader

credits to any term year of any continued lease held by the lessee.

(5) A lessee may apply the lessee's upgrader credits to more than one

lease only if

(

a) the escalating rental of all of the leases to which the credits

are applied is reduced to zero, or

(

b) the escalating rental of all but one of the leases to which the

credits are applied is reduced to zero.

(6) No portion of upgrader credits may be applied more than once to

reduce the hectares subject to escalating rental.

Change of designation to producing

26(1) The lessee of a continued lease that has been designated as

non-producing may apply to the Minister to have the designation of the

lease changed to producing.

(2) The Minister may change the designation of the lease to producing

by giving written notice to the lessee if

(

a) the lessee applies for the change in designation in accordance

with subsection (1), and

(

b) the lease is producing.

(3) A change in the Minister's designation of a lease to producing is

effective on the anniversary of the term commencement date of the

lease that follows the date on which the Minister changes the

designation.

(4) From the effective date of a change in designation under

subsection (3), the lease ceases to be subject to the payment of

escalating rental until the Minister changes the designation of the lease

back to non-producing.

(5) Any application received by the Minister under

section 21(1) of

the Oil Sands Tenure Regulation (AR 50/2000) to have a lease

designation changed from non-producing for which the Minister has

not made a decision on or before November 30, 2010 shall be

considered to be an application received by the Minister under

subsection (1).

Change of designation to non-producing

27(1) If, at any time after the continuation of a lease that has been

designated as producing, oil sands have, in the opinion of the Minister,

not been produced from the location of the lease for a period of 3 term

years or more, the Minister may change the designation of the lease to

non-producing by giving notice in writing of the change to the lessee.

(2) A change in the Minister's designation of a lease to non-producing

is effective on the anniversary of the term commencement date of the

lease that follows the date on which the Minister changes the

designation.

(3) From the effective date of a change in designation under

subsection (1), the lease is subject to the payment of escalating rental

until the Minister changes the designation of the lease back to

producing.

Part 3

Ministerial Notices and Directions

Notice respecting production

28(1) The Minister may, if the Minister considers that it is warranted

in the circumstances and notwithstanding that a lease has been

designated as producing, at any time during the term or continuation of

a lease give notice to the lessee requiring the lessee, within the time

specified in the notice, to commence production or recovery of, or to

increase the existing production or recovery of, bitumen or other oil

sands products from the oil sands within the location of the lease.

(2) A notice given by the Minister to lessee under

section 23 of the Oil

Sands Tenure Regulation (50/2000) shall be considered to be a notice

given by the Minister to the lessee under subsection (1).

Obligation to comply

29 If a lessee fails to comply with a notice given under

section 28

within the time specified by the notice, the Minister may, pursuant to

section 45 of the Act, cancel the lease as to all or part of its location or

as to any zone or subsurface area underlying all or part of its location.

Other minerals in oil sands

30 The Minister may direct a lessee to test for, evaluate and extract

from oil sands any mineral substance in association with the oil sands

within and under the location of the lessee's lease and the lessee must

comply with that direction.

Part 4

Transitional, Repeal, Expiry and Coming

into Force

Transitional

31 Despite the repeal of the Oil Sands Tenure Regulation

(AR 50/2000), a decision made by the Minister under that Regulation

before its repeal continues to be valid regardless of the effective date

of that decision.

Repeal

32 The Oil Sands Tenure Regulation (AR 50/2000) is repealed.

Expiry

33 For the purpose of ensuring that this Regulation is reviewed for

ongoing relevancy and necessity, with the option that it may be

repassed in its present or an amended form following a review, this

Regulation expires on December 1, 2015.

Coming into force

34 This Regulation comes into force on December 1, 2010.

Schedule 1

1 A cost is a "research cost" for the purpose of

section 20 of this

Regulation

(

a) if it is incurred in respect of any research project that, in the

opinion of the Minister,

(

i) has a direct connection and application to a continued

lease,

(ii) is incurred to solve or overcome economic,

environmental or technical problems or obstacles

associated with the recovery of oil sands from a

continued lease, and

(iii) is being done with the intention or the purpose of

fostering or promoting activities related to the recovery

of oil sands from a continued lease or with the intention

of obtaining an approval from the Crown for a proposed

scheme or operation that could include the lease,

and

(

b) if it qualifies as an allowable cost under

section 4 of this

Schedule.

2 A cost is an "exploration cost" for the purpose of

section 21 of this

Regulation

(

a) if it is incurred in respect of any exploration work that, in the

opinion of the Minister,

(

i) has a direct connection and application to a continued

lease, and

(ii) is incurred for the purpose of exploration of the lease,

(

b) if, in the opinion of the Minister, it is incurred by or on

behalf of the lessee of the continued lease, and

(

c) if it qualifies as an allowable cost under

section 4 of this

Schedule.

3 A cost is a "development cost" for the purpose of

section 22 of this

Regulation

(

a) if it is incurred in respect of development of oil sands that, in

the opinion of the Minister,

(

i) has a direct connection and application to a continued

lease, and

(ii) is necessary to develop the lease or to bring the lease

into production,

(

b) if, in the opinion of the Minister, it is incurred by or on

behalf of the lessee of the continued lease, and

(

c) if it qualifies as an allowable cost under

section 4 of this

Schedule.

4(1) Subject to this

Schedule and sections 19, 20, 21 and 22 of this

Regulation, the research costs, exploration costs and development

costs that are deductible in the calculation of escalating rental payable

in respect of a term year of a continued lease are those costs to which

the Minister consents and which the Minister determines to be

deductible for the purposes of that calculation.

(2) In order for a cost to qualify as an "allowable cost",

(

a) the lessee must provide documentation satisfactory to the

Minister showing that the cost is a real financial transaction,

(

b) the Minister must be satisfied that the cost is reasonable, in

nature and amount, in relation to the circumstances under

which it is incurred and that it does not exceed the fair value

of the matter in relation to which it arises,

(

c) the claim for a specific cost for a term year must be identified

in the form prescribed by the Minister, accompanied by any

documentation required by the Minister, and submitted to the

Minister prior to the due date for the payment of escalating

rental for that term year, and

(

d) the specific cost must have been paid by or on behalf of the

lessee.

(3) A cost is not an "allowable cost" to the extent that

(

a) any credits or discounts that are intended to reduce or offset

the cost are actually received by the lessee or the operator or

owner of the project in which the cost was incurred or by an

affiliate of any of them,

(

b) any economic assistance (other than economic assistance in

the form of a reduction in income tax payable or in the form

of a reduction of royalty, royalty proceeds or royalty

compensation by virtue of allocable costs established under

the Innovative Energy Technologies Regulation

(AR 250/2004)) that is intended to reduce or offset the cost

has been provided by the Province of Alberta or the

the lessee or the operator or owner of the project in which the

cost was incurred or to an affiliate of any of them,

(

c) any allocable costs as defined in the Innovative Energy

Technologies Regulation (AR 250/2004) have been

established under that Regulation in relation to the cost, or

(

d) the Minister specifies or determines pursuant to subsection

(1) that the cost is not deductible in the calculation of

escalating rental.

(4) For the purpose of this section, "fair value" means the value

determined by the Minister.

Schedule 2

Formula for Determining Upgrader Credits

1 In this Schedule, "API" means the American Petroleum Institute.

2 The formula for determining upgrader credits is as follows:

UC = BI x 0.1 x AF

where

UC is the amount of upgrader credits expressed in hectares

for a term year of a lease;

BI is the average barrels per day of feedstock bitumen

inputted to the upgrader during that term year of the

lease, based on the number of days the upgrader is in

operation during that term year;

AF is the allocation factor determined by the level of

upgrading of feedstock bitumen during that year based

on the difference in API gravity between the feedstock

bitumen and the upgraded product in accordance with

the following table:

Table

API Gravity of

Upgraded Bitumen

Allocation

Factor

10§ or less

11§

12§

13§

14§

15§

16§

17§

18§

19§

20§

21§

22§

23§

24§

25§

26§

27§

28§

29§

30§ or more

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

0.24

0.28

0.32

0.36

0.40

0.52

0.64

0.76

0.88

1.00

NOTE: The above Table assumes the API Gravity of the feedstock

bitumen is 10§ API or less. Where the gravity of the feedstock bitumen

is greater than 10§ API, credit is granted only for the incremental

improvement in gravity by subtracting the Allocation Factors for the

feedstock and upgraded bitumen, respectively.

--------------------------------

Alberta Regulation 197/2010

Mines and Minerals Act

NATURAL GAS ROYALTY REGULATION, 2009

AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 414/2010)

on November 24, 2010 pursuant to sections 5 and 36 of the Mines and Minerals Act.

1 The Natural Gas Royalty Regulation, 2009 (AR 221/2008)

is amended by this Regulation.

Section 19.2(1)(

a) is amended by adding "and on or before

December 31, 2010" after "November 19, 2008".

Section 19.3(2) is amended by adding "or December 31,

2010, whichever is earlier" after "well event".

Section 19.5 is amended by adding the following after

clause (a):

(a.1) the date on which a licensee opts out of a transitional election

in accordance with

section 19.6.

5 The following is added after

section 19.5:

Opting out of transitional election

19.6(1) The licensee of an eligible well event may opt out of a

transitional election by giving notice to the Minister by electronic

transmission to the Petroleum Registry of Alberta between January

1, 2011 and February 15, 2011 in accordance with the directions of

the Minister respecting the operation of the Registry.

(2) If a licensee opts out of a transitional election under subsection

(1), the royalty for the transitional well event shall be calculated in

accordance with

section 5.1 of

Schedule 2 until the end of the

December 2010 production month.

Schedule 2 is amended

(

a) by repealing

section 2(2)(

b) and substituting the

following:

(

b) more than

(i) 50%, R% is 50%, in the case of a production

month prior to and including the December 2010

production month, or

(ii) 36%, R% is 36%, in the case of a production

month commencing with and subsequent to the

January 2011 production month.

(

b) by repealing

section 3 and substituting the

following:

Calculation of rate for price

3(1) In the case of a production month prior to and including the

December 2010 production month, the rp% for the purposes of

section 2 of this

Schedule is calculated in accordance with the

following Table:

Rate for Price Table 1

Par Price

Formula

par price greater than zero

and less than or equal to

$7.00/GJ

rp% = [(par price - 4.50) x 0.0450] x

par price greater than

$7.00/GJ and less than or

equal to $11.00/GJ

rp% = [(par price - 7.00) x 0.0300 +

0.1125] x 100

par price greater than

$11.00/GJ

rp% = [(par price - 11.00) x 0.0100 +

0.2325] x 100

(2) In the case of a production month commencing with and

subsequent to the January 2011 production month, the rp% for

the purpose of

section 2 of this

Schedule is calculated in

accordance with the following Table:

Rate for Price Table 2

Par Price

Formula

par price greater than zero

and less than or equal to

$5.25/GJ

rp% = [(par price - 4.50) x 0.0450] x

par price greater than

$5.25/GJ and less than or

equal to $9.00/GJ

rp% = [(par price - 5.25) x 0.0200 +

0.03375] x 100

par price greater than

$9.00/GJ

rp% = [(par price - 9.00) x 0.0100 +

0.10875] x 100

(3) Where rp% calculated under subsection (1) or (2) exceeds

30%, rp% is deemed to be 30%.

(4) The rp%, determined in accordance with this section, may be

less than or equal to 0%.

Alberta Regulation 198/2010

Mines and Minerals Act

NATURAL GAS DEEP DRILLING REGULATION, 2010

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 415/2010)

on November 24, 2010 pursuant to sections 5 and 36 of the Mines and Minerals Act.

Table of Content

Definitions

2 Application of regulation

3 Eligible well

4 Nature of royalty adjustment

5 Determinations by Minister

6 Transfer of royalty adjustment

7 Factors affecting adjustment or determination

8 Reporting circumstances affecting eligibility

9 Transition wells

10 Minister's decision final

11 Consequential amendments

12 Expiry

13 Coming into force

Schedule

Definitions

1(1) In this Regulation,

(a) "abandoned well" means a well classified as an abandoned

well by the Board;

(b) "Act" means the Mines and Minerals Act;

(c) "Board" means the Energy Resources Conservation Board or

the Alberta Energy and Utilities Board;

(d) "Crown interest" means the percentage of Crown ownership

of gas recovered or obtained as determined by the Minister in

accordance with

section 26.1 of the Petroleum and Natural

Gas Tenure Regulation (AR 263/97);

(e) "crude oil" means crude oil as defined in the Natural Gas

Royalty Regulation, 2009 (AR 221/2008);

(f) "deepening" means the drilling of a well event below the true

vertical depth referred to in the licence for the well event,

pursuant to an amendment to the licence;

(g) "development well" means a well determined by the Minister

to be a development well based on the well being classified

by the Board as a development well, an outpost well or a

re-entry well;

(h) "drilling spacing unit" means a drilling spacing unit as

defined in the Natural Gas Royalty Regulation, 2009

(AR 221/2008);

(i) "eligible well" means an eligible well described in

section 3;

(j) "eligible well event" means a well event contained in an

eligible well that has a Crown interest greater than 0%;

(k) "exploratory well" means a well determined by the Minister

to be an exploratory well based on the well being classified

by the Board as a new field wildcat well, a new pool wildcat

well or a deeper pool test well;

(l) "field condensate" means field condensate as defined in the

Natural Gas Royalty Regulation, 2009 (AR 221/2008);

(m) "finished drilling date" means a finished drilling date for a

well event according to the records of the Board;

(n) "former regulation" means the Natural Gas Royalty

Regulation, 2002 (AR 220/2002) or the Natural Gas Deep

Drilling Regulation (AR 224/2008);

(o) "gas" means natural gas, residue gas, gas products and field

condensate;

(p) "gas product" means gas product as defined in the Natural

Gas Royalty Regulation, 2009 (AR 221/2008);

(q) "lengthening" means increasing the measured depth of a well

event referred to in the licence for the well, pursuant to an

amendment to the licence;

(r) "licence" means a licence for a well issued under the Oil and

Gas Conservation Act;

(s) "licensee", in relation to a well, means the holder of the

licence in respect of that well under the Oil and Gas

Conservation Act;

(t) "measured depth" means, for each well event, the longest

distance in metres according to the records of the Board,

measured along the bore of the well from the kelly bushing

of the well to the base of the deepest producing interval that

the well event is, in the opinion of the Minister, producing

natural gas in paying quantities;

(u) "operator", with reference to a well, means the person who is

the operator of the well according to the records of the

Department;

(v) "pool" means a pool as defined in the Oil and Gas

Conservation Act;

(x) "producing interval" means a perforation from which

production is obtained;

(y) "residue gas" means residue gas as defined in the Natural

Gas Royalty Regulation, 2009 (AR 221/2008);

(z) "shortening" means decreasing the measured depth of a well

event where the base of the deepest natural gas producing

interval in the well event that is producing in paying

quantities has a true vertical depth greater than 2000 metres

but is shallower than the most recent measured depth

determined previously for that well event;

(aa) "true vertical depth" means, for each well event, the vertical

distance in metres measured in a perpendicular line from the

kelly bushing of a well to the base of the deepest producing

interval that the well event is, in the opinion of the Minister,

producing natural gas in paying quantities;

(bb) "twin well", in relation to an eligible well, means a well that

(

i) spud on or after May 1, 2010,

(ii) located in the same legal subdivision or drilling spacing

unit, whichever is of lesser area, as that in which the

eligible well is located, and

(iii) drilled to produce gas that, in the opinion of the

Minister, is not initially recoverable from the eligible

well due to inadvertent damage to the well;

(cc) "unit area" means a unit area as defined in the Natural Gas

Royalty Regulation, 2009 (AR 221/2008);

(dd) "value of the adjusted royalty quantity", in relation to an

eligible well, means the aggregate of the amounts of royalty

compensation that would have been payable under the

Natural Gas Royalty Regulation, 2009 (AR 221/2008) in

respect of the Crown's royalty share of gas recovered or

obtained from each eligible well event in that well in the

absence of

(

i) any royalty exemption, adjustment or reduction under

another current or former regulation, and

(ii) any royalty adjustment under this Regulation

applied to that well event, or to the well that contains that

well event, and without any deductions for allowable costs;

(ee) "well event" means a well event as defined in the Natural

Gas Royalty Regulation, 2009 (AR 221/2008).

(2) A reference to the true vertical depth or measured depth of a well

event in this Regulation is a reference to the depth of the well event in

metres according to the records of the Board.

Application of regulation

2 This Regulation applies to royalty on gas recovered or obtained

from an eligible well on or after May 1, 2010.

Eligible well

3(1) Subject to subsection (3), an eligible well is a well that

(

a) is spud or deepened on or after May 1, 2010,

(

b) is an exploratory well or a development well,

(

c) contains a producing interval, the base of which is greater

than a true vertical depth of 2000 metres, and

(

d) has a Crown interest greater than 0%.

(2) Additional information must be provided to the Minister by the

operator or licensee if required to aid in determining that a well meets

the requirements of subsection (1).

(3) A well is not an eligible well if

(

a) subject to

section 9, that well, or any well event in that well,

has been the subject of a royalty exemption, adjustment or

reduction under any former regulation,

(

b) that well initially produces oil either alone or with gas at a

gas oil ratio of less than 1800:1,

(

c) that well produces oil sands or crude bitumen, other than a

gas well as defined in the Oil and Gas Conservation

Regulations (AR 151/71),

(

d) it is a well whose production of crude oil or crude bitumen is

exempt from royalty under the Third Tier Exploratory Well

Royalty Exemption Regulation (AR 16/93) or eligible for a

royalty adjustment under the Deep Oil Exploratory Well

Regulation (AR 225/2008) and that exemption or adjustment

has not been wholly revoked, or

(

e) that well is a re-entry into an abandoned well.

Nature of royalty adjustment

4(1) The royalty otherwise payable to the Crown on gas recovered or

obtained from each eligible well event is adjusted in accordance with

this section.

(2) Subject to subsection (3),

(

a) the royalty rate on natural gas recovered, or on residue gas or

on gas products obtained from natural gas, from eligible well

events on or after May 1, 2010, is reduced to 5%, and

(

b) the royalty rate on field condensate obtained from natural gas

recovered from eligible well events on or after May 1, 2010

is reduced to 0%.

(3) Subsection (2)(

a) and (

b) do not apply to the last production month

that a royalty reduction is applicable if there is not enough remaining

in the total amount of royalty adjustment for the well, as calculated

under subsection (7), to reduce the royalty rate for each well event in

that well to 5% or 0%, as the case may be.

(4) The total royalty adjustment amount for an eligible well classified

as a development well is the aggregate amount as determined under the

Schedule.

(5) The total royalty adjustment amount for an eligible well classified

as an exploratory well is the aggregate amount as determined under the

Schedule.

(6) When the total royalty adjustment amount is determined for an

eligible well under subsection (4) or (5), that amount is reduced each

month by the total difference in the value of the adjusted royalty

quantity for that well and the total royalty compensation determined as

a result of the reduced royalty rate under subsection (2)(

a) or (b), as

applicable, for all eligible well events in that well, commencing with

the first month of production from each eligible well event until

(

a) the total royalty adjustment amount is reduced to zero, or

(b) 5 years from the first finished drilling date of the eligible

well has expired,

whichever occurs first.

(7) A royalty adjustment

(

a) does not apply in respect of any month that occurs after the

5-year period following the finished drilling date applicable

to the drilling, deepening, lengthening or shortening of an

eligible well,

(

b) terminates effective as of the date an eligible well is

abandoned, and

(

c) does not apply in respect of any month in which an eligible

well does not have production of gas from an eligible well

event.

(8) Where an eligible well has more than one eligible well event with

a producing interval, the base of which has a true vertical depth greater

than 2000 metres,

(

a) for each month the royalty adjustment for the eligible well

will be based on the eligible well event with the greatest

measured depth that is producing gas,

(

b) if the eligible well event in clause (

a) fails to produce gas in

any month, the royalty adjustment will be based on the

eligible well event producing gas that has the next deepest

measured depth and has a producing interval, the base of

which has a true vertical depth greater than 2000 metres, and

(

c) the additional measured depth of all other eligible well events

with a true vertical depth greater than 2000 metres will be

added to the royalty adjustment in accordance with the

Schedule.

Determinations by Minister

5(1) If

(

a) an eligible well event is drilled or deepened below a true

vertical depth of 2000 metres to a new measured depth that is

below the base of the natural gas bearing interval of the

deepest producing interval from which the well event was, in

the opinion of the Minister, producing gas in paying

quantities, and

(

b) the Minister is satisfied that the gas recovered or obtained

from a pool in the deeper interval is subsequently recovered

or obtained in paying quantities,

the Minister may determine a new measured depth for the eligible well

event and a new total royalty adjustment amount for the eligible well.

(2) If the Minister determines a new measured depth pursuant to

subsection (1), the royalty otherwise payable to the Crown on gas

recovered or obtained from the eligible well event, determined by the

Minister, is eligible for a royalty adjustment in accordance with section

(3) If an eligible well event has received a royalty adjustment under

this Regulation and, in accordance with subsection (1),

(

a) that well event is subsequently deepened,

(

b) the deepening results in a new measured depth, and

(

c) the new measured depth results in a new total royalty

adjustment amount calculated for the well,

the new total royalty adjustment amount applied to the well

(

d) is the total royalty adjustment amount, and

(

e) shall be applied as of the effective date of the deepening,

and the finished drilling date of the eligible well is deemed to be the

latest finished drilling date as a result of the deepening of the well

event.

(4) If an eligible well event has received a royalty adjustment under

this Regulation and

(

a) that well event is subsequently lengthened or shortened,

(

b) the lengthening or shortening results in a new measured

depth as determined by the Minister, and

(

c) the new measured depth results in a new total royalty

adjustment amount calculated for the well,

the new total royalty adjustment amount applied to the well

(

d) is the total royalty adjustment amount, and

(

e) shall be applied as of the effective date of the lengthening or

shortening,

and the finished drilling date of the eligible well is deemed to be the

first finished drilling date of the well before the well event was

lengthened or shortened.

(5) If the new total royalty adjustment amount determined for an

eligible well under subsection (3) or (4) is less than the amount of

royalty adjustment already received by that well as of the effective date

of the new total royalty adjustment, that well shall not receive any

further royalty adjustments.

(6) If an eligible well is receiving a royalty adjustment under this

Regulation and that well subsequently becomes part of a unit area,

(

a) the Crown interest of each well event in that well is the

Crown interest under the unit area, effective as of the date of

the unit area,

(

b) the Minister shall determine whether or not that well or well

event is an eligible well or eligible well event as of the

effective date of the unit area,

(

c) the total royalty adjustment amount determined for that well

does not change, and

(

d) the amounts that well received in royalty adjustments prior to

the well becoming part of a unit area do not change.

(7) If an eligible well is receiving a royalty adjustment under this

Regulation and the Crown interest in that well, or in any well event in

that well, subsequently changes for a reason other than becoming part

of a unit area as described under subsection (6), the Crown interest is

adjusted accordingly, and there is no change to the total royalty

adjustment amount determined for that well, or to the amounts that

well received in royalty adjustments prior to the change in Crown

interest.

Transfer of royalty adjustment

6(1) The Minister may approve the transfer of a royalty adjustment in

section 4 or 5 from an eligible well to its twin well.

(2) If the Minister approves the transfer of a royalty adjustment

pursuant to subsection (1),

(

a) the royalty adjustment on gas recovered or obtained from the

eligible well from which the royalty adjustment was

transferred terminates on the effective date of the transfer of

the royalty adjustment to the twin well, and

(

b) the royalty adjustment period applicable to the twin well is

the balance of the royalty adjustment period that would have

been applicable to the eligible well from which the royalty

adjustment was transferred.

Factors affecting adjustment or determination

7 If, in respect of an eligible well or a twin well, the Minister is of the

opinion that

(

a) gas recovered or obtained from an eligible well or a twin well

subject to royalty adjustment has resulted in a material

reduction of gas recovered or obtained from another well that

is not subject to a royalty adjustment,

(

b) there are circumstances that, had they been known when the

approval of a transfer of a royalty adjustment to a twin well

was made, would have resulted in a refusal to allow the

transfer,

(

c) there are circumstances that, had they been known when a

determination under

section 5 was made, would have resulted

in a refusal to make the determination,

(

d) a provision of this Regulation has not been complied with,

(

e) compliance with

section 47(6) of the Act in connection with

an audit or examination relating to a royalty adjustment in

respect of an eligible well was inadequate, or

(

f) one or more acts, agreements, arrangements, transactions or

operations were, before or after the coming into force of this

Regulation, effected for the purpose of improperly,

artificially or unduly obtaining or increasing a royalty

adjustment,

the Minister may determine that gas recovered or obtained in respect of

a well is not eligible in whole or in part for the royalty adjustment, may

revoke a royalty adjustment in whole or in part and may disallow the

transfer of a royalty adjustment to a twin well.

Reporting circumstances affecting eligibility

8 A person who has received a royalty adjustment shall forthwith

notify the Minister in writing on learning of any circumstances that

indicate the well or well event from which gas was recovered or

obtained was not eligible for the royalty adjustment in whole or in part.

Transition wells

9(1) A well that is eligible for, or received a royalty exemption or

royalty adjustment under a former regulation is eligible for a royalty

adjustment under this Regulation if it is an eligible well and if it meets

the following criteria:

(

a) the well was spud or commenced deepening on or after

October 25, 2007 and on or before April 30, 2010;

(

b) the well is not a well described under

section 3(3);

(

c) the well, or a well event in that well, has an unused royalty

exemption or royalty adjustment under the former regulation.

(2) The total amount of royalty adjustment is calculated for a

transition well as if it were an eligible well under this Regulation but

the total royalty adjustment amount is then reduced by the amount of

royalty exemption or adjustment received by the well, or by all well

events in that well, under a former regulation.

Minister's decision final

10 Where any question arises pertaining to the

interpretation or

application of this Regulation, the Minister is the sole judge of the

question and there is no appeal from the Minister's decision.

Consequential amendments

11(1) The Natural Gas Deep Drilling Regulation

(AR 224/2008) is amended by this section.

(2) Section 1(1)(aa)(

i) is amended by adding "and on or before

April 30, 2010" after "October 25, 2007".

(3) Section 2 is amended by adding "and on or before April 30,

2010" after "January 1, 2009".

(4) Section 3(1)(

b) is amended by striking out "but before

January 1, 2014" and substituting "and on or before April 30,

2010".

(5) Section 4 is amended

(

a) in subsection (2)

(

i) in clause (

a) by adding "and on or before April 30,

2010" after "January 1, 2009";

(ii) in clause (

b) by adding "and on or before April 30,

2010" after "January 1, 2009";

(

b) in subsection (7) by adding "or" at the end of clause

(a), by striking out "or" " at the end of clause (

b) and

by repealing clause (c).

Expiry

12 For the purpose of ensuring that this Regulation is reviewed for

ongoing relevancy and necessity, with the option that it may be

repassed in its present or an amended form following a review, this

Regulation expires on November 30, 2016.

Coming into force

13 This Regulation is deemed to have come into force on May 1,

Schedule

Additional measured depth

1(1) The additional measured depth for an eligible well is

(

a) the sum of the lengths, in metres, of all well events in the

eligible well with a true vertical depth greater than 2000

metres but not more than 3500 metres, measured from the

kick off point to the deepest natural gas producing interval of

each well event, and

(

b) the sum of the lengths, in metres, of all well events in the

eligible well with a true vertical depth greater than 3500

metres, measured from the kick off point to the deepest

natural gas producing interval of each well event.

(2) In calculating the additional measured depth for an eligible well

under subsection (1),

(

a) each well event must be counted only once, and

(

b) the measured depth calculated for the well event referred to

section 4(8)(

a) or (

b) of this Regulation must not be

included.

Development wells

2(1) The total royalty adjustment for a well described as an eligible

well under

section 3(1) of this Regulation and classified as a

development well is determined in accordance with the following

formula:

total royalty adjustment = A+B+C+D+E+F+G

where

A is the number of metres of the measured depth more than

2000 but not more than 3500, multiplied by $625 per metre;

B is the number of metres of the measured depth more than

3500 but not more than 4000, multiplied by $2500 per metre;

C is the number of metres of the measured depth more than

4000 but not more than 5000, multiplied by $2500 per metre;

D is the number of metres of the measured depth more than

5000, multiplied by $3000 per metre;

E is the number of metres of additional measured depth

calculated in

section 1(1)(

a) of this Schedule, multiplied by

$625 per metre;

F is the number of metres of additional measured depth

calculated in

section 1(1)(

b) of this Schedule, multiplied by

$2500 per metre;

G is the supplemental royalty adjustment determined under

subsection (2) for eligible wells spud or deepened on or

before May 27, 2010.

(2) The supplemental royalty adjustment is as follows:

(

a) if the measured depth is less than 4000 metres, $0;

(

b) if the measured depth is 4000 metres or more, $875 000.

(3) The maximum royalty adjustment is $8 000 000.

Exploratory wells

3(1) The total royalty adjustment for a well described as an eligible

well under

section 3(1) of this Regulation and classified as an

exploratory well is determined in accordance with the following

formula:

total royalty adjustment = A+B+C+D+E+F+G

where

A is the number of metres of the measured depth more than

2000 but not more than 3500, multiplied by $625 per metre;

B is the number of metres of the measured depth more than

3500 but not more than 4000, multiplied by $2500 per metre;

C is the number of metres of the measured depth more than

4000 but not more than 5000, multiplied by $3125 per metre;

D is the number of metres of the measured depth more than

5000, multiplied by $3750 per metre;

E is the number of metres of additional measured depth

calculated in

section 1(1)(

a) of this Schedule, multiplied by

$625 per metre;

F is the number of metres of additional measured depth

calculated in

section 1(1)(

b) of this Schedule, multiplied by

$2500 per metre;

G is the supplemental royalty adjustment determined under

subsection (2) for eligible wells spud or deepened on or

before May 27, 2010.

(2) The supplemental royalty adjustment is as follows:

(

a) if the measured depth is less than 4000 metres, $0;

(

b) if the measured depth is 4000 metres or more, $875 000.

(3) The maximum royalty adjustment is $10 000 000.

--------------------------------

Alberta Regulation 199/2010

Mines and Minerals Act

PETROLEUM ROYALTY REGULATION, 2009

AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 416/2010)

on November 24, 2010 pursuant to sections 5 and 36 of the Mines and Minerals Act.

1 The Petroleum Royalty Regulation, 2009 (AR 222/2008) is

amended by this Regulation.

Section 1(1) is amended by adding the following after

clause (k.1):

(k.2) "production month" means the month in which petroleum is

recovered;

Section 11.2(1)(

a) is amended by adding "and on or before

December 31, 2010" after "November 19, 2008".

Section 11.3(2) is amended by adding "or December 31,

2010, whichever is earlier" after "well event".

Section 11.5 is amended by adding the following after

clause (a):

(a.1) the date on which a licensee opts out of a transitional election

in accordance with

section 11.6;

6 The following is added after

section 11.5:

Opting out of transitional election

11.6(1) The licensee of an eligible well event may opt out of a

transitional election by giving notice to the Minister by electronic

transmission to the Petroleum Registry of Alberta between January

1, 2011 and February 15, 2011 in accordance with the directions of

the Minister respecting the operation of the Registry.

(2) If a licensee opts out of a transitional election under subsection

(1), the royalty for the transitional well event shall be calculated in

accordance with

section 5 of the

Schedule until the end of the

December 2010 production month.

7 The

Schedule is amended

(

a) by repealing

section 2(2)(

b) and substituting the

following:

(

b) is more than

(i) 50%, the amount is 50%, in the case of a

production month prior to and including the

December 2010 production month, or

(ii) 40%, the amount is 40%, in the case of a

production month commencing with and

subsequent to the January 2011 production month.

(

b) by repealing

section 3 and substituting the

following:

Calculation of rate for price

3(1) In the case of a production month prior to and including

the December 2010 production month, the rp% for the purposes

section 2 of this

Schedule is calculated in accordance with

the following Table:

Rate for Price Table 1

Par Price

Formula

par price greater than zero and

less than or equal to $250.00 per

cubic metre

rp% = ((par price - 190.00) x

0.0006) x 100

par price greater than $250.00 per

cubic metre and less than or

equal to $400.00 per cubic metre

rp% = [((par price - 250.00) x

0.0010) + 0.0360] x 100

par price greater than $400.00 per

cubic metre

rp% = [((par price - 400.00) x

0.0005) + 0.1860] x 100

(2) In the case of a production month commencing with and

subsequent to the January 2011 production month, the rp% for

the purpose of

section 2 of this

Schedule is calculated in

accordance with the following Table:

Rate for Price Table 2

Par Price

Formula

par price greater than zero and

less than or equal to $250.00 per

cubic metre

rp% = ((par price - 190.00) x

0.0006) x 100

par price greater than $250.00 per

cubic metre and less than or

equal to $400.00 per cubic metre

rp% = [((par price - 250.00) x

0.0010) + 0.0360] x 100

par price greater than $400.00 per

cubic metre and less than or

equal to $535.00 per cubic metre

rp% = [((par price - 400.00) x

0.0005) + 0.1860] x 100

par price greater than $535.00 per

cubic metre

rp% = [((par price - 535.00) x

0.0003) + 0.2535] x 100

(3) Where the rp% calculated under subsections (1) or

(2) exceeds 35%, the rp% is deemed to be 35%.

Alberta Regulation 200/2010

Alberta Corporate Tax Act

ALBERTA CORPORATE TAX AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 418/2010)

on November 24, 2010 pursuant to

section 56 of the Alberta Corporate Tax Act.

1 The Alberta Corporate Tax Regulation (AR 119/2008) is

amended by this Regulation.

2(1)

Section 7 is amended

(

a) by renumbering it as

section 7(1);

(

b) by repealing subsection (1)(

c) and substituting the

following:

(

c) paragraph 4301(

b) of the federal regulations shall be

read as follows:

(

b) every provision of the Act that requires interest at

a prescribed rate to be paid or applied on an

amount payable by the Provincial Minister to a

taxpayer, the prescribed rate in effect during any

particular quarter is,

(

i) for a quarter ending before January 1, 2010,

the rate, expressed as a percentage per year,

for the particular quarter set out in the

following Table:

Table

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

January 1 to

March 31

April 1 to

June 30

July 1 to

September 30

October 1 to

December 31

6.0%

6.0%

6.0%

6.0%

8.0%

7.5%

8.0%

8.0%

6.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.5%

6.5%

6.0%

5.0%

5.0%

5.0%

4.5%

5.5%

5.0%

4.5%

4.5%

4.0%

4.0%

4.5%

4.5%

4.5%

4.5%

5.0%

5.5%

6.0%

6.5%

7.5%

7.5%

7.5%

8.0%

8.0%

7.5%

6.5%

6.0%

5.5%

5.5%

5.0%

4.5%

4.0%

5.0%

4.5%

4.0%

3.5%

3.5%

3.0%

4.0%

4.5%

4.0%

5.0%

5.5%

4.5%

4.5%

4.0%

3.5%

3.5%

3.0%

2.5%

3.0%

3.0%

3.0%

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

2.5%

2.5%

3.0%

3.0%

3.0%

3.0%

3.0%

2.5%

2.5%

1.5%

1.0%

1.5%

1.5%

1.5%

1.5%

2.0%

1.5%

1.5%

1.5%

1.0%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

2.0%

2.0%

2.5%

2.5%

2.5%

2.5%

2.5%

2.0%

2.0%

1.5%

1.5%

1.0%

0.5%

0.5%

0.5%

(ii) for a quarter ending after December 31, 2009,

the product obtained when the rate

determined under subparagraph 4301(a)(

i) in

respect of the particular quarter is multiplied

by 50%.

(2) Subject to subsection (3), subsection (1)(

b) applies to

all assessments and reassessments issued after February

9, 2010 for a taxation year ending before or after that date.

(3) Section 7(

c) of the Alberta Corporate Tax Regulation, as

it read immediately before the coming into force of this

section, continues to apply to a reassessment issued after

February 9, 2010 for a taxation year ending on or before that

date if the reassessment is issued in response to a decision

of the Provincial Minister under

section 48(4)(

b) of the Act

relating to a matter raised before February 10, 2010 in a

notice of objection received by the Provincial Minister in

respect of that taxation year.

Section 7.1 is amended

(

a) by repealing subsection (1) and substituting the

following:

Conversion to Canadian currency

7.1(1) For the purposes of

section 4.02(3)(

c) of the Act, the

corporation's tax payable for the taxation year must be

converted to Canadian currency using the average exchange

rate for the taxation year.

(

b) in subsection (2) by striking out "The" and

substituting "For the purposes of subsection (1) and

section 4.02(4) and (6) of the Act, the".

--------------------------------

Alberta Regulation 201/2010

Tobacco Tax Act

TOBACCO TAX AMENDMENT REGULATION

Filed: November 24, 2010

For information only: Made by the Lieutenant Governor in Council (O.C. 422/2010)

on November 24, 2010 pursuant to

section 48 of the Tobacco Tax Act.

1 The Tobacco Tax Regulation (AR 273/83) is amended by

this Regulation.

Section 1 is repealed and the following is substituted:

Interpretation

1(1) In this Regulation,

(a) "Act" means the Tobacco Tax Act;

(b) "background check" means, in respect of a person, an

inquiry, investigation or record check based on the collection

of information, including personal information, from the

person and any relevant third party sources, and includes, but

is not limited to, an inquiry or investigation relating to the

honesty and integrity, financial history and competence of

the person;

(c) "carton" means a container in which one or more packages of

cigarettes, tobacco sticks or fine cut tobacco are packed;

(d) "case" means a container for the shipping of cartons of

cigarettes or tobacco sticks or cartons or packages of fine cut

tobacco;

(e) "collection period" means,

(

i) in the case of a wholesaler who is not a manufacturer, a

calendar month, and

(ii) in the case of any other tax collector, a period approved

by the Minister;

(f) "duty free shop" means a duty free shop as defined in the

Excise Tax Act (Canada);

(g) "mark-point" means a location authorized by the Minister for

the purposes of marking packages, cartons or cases;

(h) "raw leaf tobacco" means unmanufactured tobacco or the

leaves and stems of the tobacco plant;

(i) "seizure costs" means all the costs related to the seizure,

removal, transportation and storage, or of any one or more of

those functions, of items seized under

section 24 or 24.1 of

the Act.

(2) In the Act and this Regulation,

(a) "calendar week" means the 7-day period beginning on

Monday and ending on Sunday;

(b) "cigar" means a roll or tubular construction intended for

smoking that consists of

(

i) a filler composed of natural tobacco, reconstituted

tobacco or natural and reconstituted tobacco, and

(ii) a wrapper, or binder and wrapper, composed of natural

tobacco, reconstituted tobacco or natural and

reconstituted tobacco in which the filler is wrapped, and

may include a mouthpiece (tip) or filter;

(c) "cigarette" includes any roll or tubular construction of

tobacco intended for smoking, other than a cigar or a tobacco

stick, and where any cigarette exceeds 102 mm in length,

each 76 mm or less of the cigarette shall be considered to be

a separate cigarette;

(d) "exempt sale retailer" means a retailer who is registered

under the Act to sell tobacco to consumers who are exempt

from tax under the Act or under

an Act of Parliament;

(e) "fine cut tobacco" means loose tobacco that has been refined

to the point where it is ready to be formed into a cigarette or

tobacco stick;

(f) "identification card" means

(

i) a card issued under the Indian Act (Canada) indicating

that the holder is an Indian, if the Minister has agreed

with the issuer of the card to accept the card for the

purposes of the Act and this Regulation, or

(ii) a ministerial identification card issued by the Minister

under

section 13.2;

(g) "Indian" means an Indian as defined in the Indian Act

(Canada);

(h) "Indian band" means a band as defined in the Indian Act

(Canada);

(i) "manufacture", in respect of tobacco, includes any step in the

processing of raw leaf tobacco into the tobacco product,

including packing, stemming, reconstituting, converting or

packaging;

(j) "manufactured tobacco" means tobacco, other than cigars or

packaged raw leaf tobacco, that is manufactured;

(k) "package" means a container in which fine cut tobacco,

tobacco sticks or cigarettes, which are not already in a

container, are packed;

(l) "reserve" means a reserve as defined in the Indian Act

(Canada);

(m) "tear tape" means the band of ribbon that is used to tear open

the wrapping that encloses a package;

(n) "tobacco stick" means any roll or tubular construction of

tobacco intended for smoking, other than a cigar, that

requires further preparation to be consumed, and where any

tobacco stick exceeds 90 mm in length or 800 mg, each

60 mm or less or each 650 mg or less, respectively, of the

tobacco stick shall be considered to be a separate tobacco

stick.

(3) For the purpose of the definition of cigar, "reconstituted

tobacco" means a product that is comprised of 50% or more tobacco.

3 The following is added after

section 1:

Background check

1.01 When a person is applying for a wholesaler's or importer's

licence, a tear tape licence, a marking permit, registration as an

exempt sale retailer or duty free shop or an appointment as a tax

collector, the Minister, or an officer authorized by the Minister to act

under this section, may conduct a background check on any one or

more of the following persons that the Minister considers necessary

to determine the applicant's eligibility for a licence, permit,

registration or appointment:

(

a) the applicant;

(

b) a director, officer, employee or contractor of the applicant;

(

c) a person not dealing at arm's length with the applicant.

Required notices

1.02 A tax collector, licensed importer, licensed wholesaler,

exempt sale retailer, duty free shop, marking permit holder or tear

tape producer shall immediately notify the Minister in writing if

(

a) the person is the subject of proceedings relating to

bankruptcy, insolvency or receivership,

(

b) in the case of a corporation, the corporation

(

i) amalgamates with another corporation,

(ii) is wound up, liquidated or dissolved, or

(iii) is subject to any proceedings under the Companies'

Creditors Arrangement Act (Canada),

(

c) in the case of a partnership, there is a change in the partners

of the partnership,

(

d) there is a sale, assignment or transfer of that part of the

business under which the activities authorized by a licence,

registration, permit or appointment under the Act are carried

out, and the sale, assignment or transfer results in a change in

control of the business,

(

e) there is a substantial change in the core management group or

operations of that part of the business for which the person

has been issued a licence, permit, registration or

appointment, or

(

f) the person ceases to carry out that part of the business for

which that person has been issued a licence, permit,

registration or appointment.

Section 1.1 is amended by renumbering it as

section

1.1(1) and by adding the following after subsection (1):

(2) If the Minister is satisfied with the application and any

background check conducted, the Minister shall issue a wholesaler's

or importer's licence to the applicant.

Section 9(2) is amended by adding "6.1," before "33".

Section 12(1) is amended by striking out "or 11".

Section 12.2(4) and (5) are repealed and the following is

substituted:

(4) The Minister may refuse to register a person as an exempt sale

retailer or duty free shop if the Minister is satisfied that the person,

or a director, officer, employee or contractor of the person, or

someone not dealing at arm's length with the person,

(

a) has contravened

(

i) the Act or the regulations made under the Act,

(ii) any term or condition imposed under subsection (2),

(iii) any other Act or regulation of Alberta that imposes any

tax, or

(iv) a law in force in another jurisdiction that governs the

sale of tobacco or levying of a tax on tobacco in that

jurisdiction,

(

b) has not acted or may not act in accordance with the law, with

honesty and integrity or in the public interest, having regard

to the past conduct of the person,

(

c) would be a detriment to the integrity of the lawful tobacco

industry in Alberta, or

(

d) would be a detriment to the lawful manufacture, import,

purchase, sale or possession of tobacco under the Act.

(5) The Minister may cancel or suspend the registration of an

exempt sale retailer or a duty free shop if the Minister is satisfied

that

(

a) the exempt sale retailer or duty free shop, or a director,

officer, employee or contractor of the exempt sale retailer or

duty free shop, or someone not dealing at arm's length with

the exempt sale retailer or duty free shop

(

i) has contravened

(

A) the Act or the regulations made under the Act,

(

B) any term or condition imposed under subsection

(2),

(

C) any other Act or regulation of Alberta that imposes

any tax, or

(

D) a law in force in another jurisdiction that governs

the sale of tobacco or levying of a tax on tobacco

in that jurisdiction,

(ii) has not acted in accordance with the law or with

honesty or integrity or in the public interest,

(iii) is a detriment to the integrity of the lawful tobacco

industry in Alberta,

(iv) is a detriment to the lawful manufacture, import,

purchase, sale or possession of tobacco under the Act,

(

b) access to the business premises of the exempt sale retailer or

duty free shop, or the location at which tax-exempt sales are

made by the exempt sale retailer or duty free shop, is denied

or impeded by any person.

Section 13.2 is amended

(

a) by adding the following after subsection (3):

(3.1) No individual who has been issued a ministerial

identification card shall sell or give that card to another person or

permit another person to use the card for the purposes of

section

13(2.1)(c)(i).

(3.2) Subject to subsection (3.3), no person shall possess a

ministerial identification card that has been issued or is in the

name of another person.

(3.3) No Indian band who has been issued a ministerial

identification card shall sell or give the card to another person or

permit another person to use the card for the purposes of

section

13(2.1)(c)(i), unless

(

a) the person is an authorized representative of the Indian

band,

(

b) the person is using the ministerial identification card to

purchase tobacco for and on behalf of the Indian band,

and

(

c) the person and the Indian band comply with any

conditions placed on the ministerial identification card

by the Minister.

(

b) in subsection (5) by adding the following after

clause (d):

(

e) the Minister believes that the ministerial identification

card has been sold to, or is in the possession of, or being

used by, a person other than the person to whom it was

issued or an authorized person pursuant to subsection

(3.3).

(

c) by adding the following after subsection (9):

(10) If a ministerial identification card has been cancelled for the

reason referred to in subsection (5)(e), and the Indian or Indian

band, as the case may be, satisfies the Minister that the

identification card has