© Published by Alberta King’s Printer Alberta King’s Printer Suite 700, Park Plaza 10611 - 98 Avenue Edmonton, AB T5K 2P7 Phone: 780-427-4952 E-mail: kings-printer@gov.ab.ca Shop on-line at kings-printer.alberta.ca Province of Alberta Office Consolidation Revised Statutes of Alberta 2000

Chapter O-6 Current as of May 14, 2026 OIL AND GAS CONSERVATION ACT

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Note All persons making use of this consolidation are reminded that it has no legislative sanction, that amendments have been embodied for convenience of reference only. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law. Regulations The following is a list of the regulations made under the Oil and Gas Conservation Act that are filed as Alberta Regulations under the Regulations Act Alta. Reg.

Amendments Oil and Gas Conservation Act (The following list does not include certain special or particular orders made under the Oil and Gas Conservation Act which are exempted from filing under the Regulations Act: see AR 288/99.) Oil and Gas Conservation Rules ......... 151/71 ....... 241/71, 69/72, 140/72, 233/72, 93/73, 103/73, 51/74, 71/74, 80/74, 144/74, 264/74, 341/74, 41/75, 2/76, 179/76, 202/76, 15/77, 104/77, 250/77, 178/78, 295/78, 428/78, 469/78, 229/79, 326/79, 2/80, 79/80, 51/81, 205/81, 89/82, 206/82, 267/82, 286/82, 337/82, 433/82, 460/82, 221/83, 336/83, 364/83, 399/83, 416/83, 15/84, 112/84, 264/84, 189/85,

265/85, 27/86, 234/86, 302/86, 283/87, 350/87, 485/87, 70/88, 188/88, 217/88, 360/88, 70/89, 153/89, 19/90, 146/90, 169/90, 321/90, 40/91, 79/91, 267/91, 374/91, 199/92, 332/92, 371/92, 9/93, 168/93, 186/93, 225/93, 226/93, 117/94, 237/94, 156/95, 105/96, 144/96, 222/97, 10/98, 11/98, 12/98, 13/98, 14/98, 25/98, 67/98, 78/98, 128/98, 143/98, 179/98, 224/98, 229/98, 47/99, 131/99, 151/99, 82/2000, 99/2000,102/2001, 182/2001, 206/2001, 6/2002, 83/2002, 136/2002, 194/2002, 226/2002, 32/2003, 190/2003, 215/2003, 222/2003, 256/2003, 390/2003, 119/2004, 202/2004, 17/2005, 122/2005, 184/2005, 185/2005, 189/2005, 40/2006, 142/2006, 153/2006, 269/2006, 12/2007, 109/2007, 152/2007, 254/2007, 26/2008, 114/2008, 115/2008, 159/2008, 180/2008, 9/2009, 85/2009, 234/2009, 7/2010, 39/2010, 130/2010, 156/2010, 216/2010, 2/2011, 65/2011, 203/2011, 208/2011, 209/2011, 18/2012, 31/2012, 50/2012, 121/2012, 157/2012, 170/2012, 220/2012, 222/2012, 1/2013, 2/2013, 41/2013, 44/2013, 55/2013, 62/2013, 70/2013, 75/2013, 89/2013, 115/2013, 1/2014, 45/2014, 88/2014, 140/2014, 6/2015, 33/2015, 114/2015, 1/2016, 128/2016, 197/2016, 10/2017, 30/2017, 158/2017, 243/2017, 23/2018, 219/2018, 10/2019, 17/2019, 40/2020, 109/2020, 165/2020, 259/2020, 277/2020, 52/2021, 70/2021, 71/2021, 113/2021, 161/2021, 209/2021, 45/2022, 57/2022, 117/2022,

216/2022, 243/2022, 18/2023, 70/2023, 98/2023, 104/2023, 51/2024, 12/2025, 51/2025 53/2025, 4/2026, 64/2026 Oil and Gas Conservation ................... 65/2026 Orphan Fund Delegated Administration .............................. 45/2001 ..... 238/2001, 251/2001, 67/2006, 35/2007, 254/2007, 89/2013, 23/2016, 105/2017, 88/2020, 98/2023, 142/2025

1 OIL AND GAS CONSERVATION ACT

Chapter O-6 Table of Contents 1

Interpretation 2 Description of land 3 Application of Act

Part 1 Object and Application of Act 4 Purposes of Act

Part 3 General Powers 7 General powers 8 Conditions of approval

Part 4 Overriding Provisions 9 Overriding provisions

Part 5 Rules 10 Rules

Part 6 Licences and Approvals 11 Requirement for licence 12 Licence or approval for facility 13 Transitional 14 Appeal 15 Application for licence 16 Entitlement for well licence 17 Entitlement for facility licence 18 Granting of licence

RSA 2000

Chapter O-6 OIL AND GAS CONSERVATION ACT 2 19 Location of road in licence 20 Additional requirements of licensee 21 Identification codes 22 Terms and conditions 23 Reworking wells and facilities 23.1 Captured carbon dioxide wells, facilities and schemes 24 Transfer of licence 25 Cancellation and suspension 26 Amendment of licence or approval 26.1 Security deposit 26.2 Reasonable care, measures to prevent impairment or damage 27 Suspension and abandonment 28 Suspension, abandonment by Regulator 29 Continuing liability 30 Suspension, abandonment and reclamation costs 31 Deemed working interest participant 31.1 Deemed licensee 32 Extended obligation

Part 7 Production Designation of Fields, etc. 33 Regulation of production Prorationing of Oil 34 Prorationing of oil Rateable Take of Gas 36 Rateable take Conservation Projects 37 Disposal of water 38 Prevention of waste 39 Approval of scheme 40 Prohibition against injunction 41 Escape of oil, gas, water or substance Production and Use of Gas 42 Gas wells

RSA 2000

Chapter O-6 OIL AND GAS CONSERVATION ACT 3

Part 8 Shut-down and Closure 44 Shut-down and closure 47 Prohibition

Part 9 Common Carriers, Purchasers and Processors Common Carrier 48 Common carrier 49 Relief to common carrier Common Purchaser 50 Common purchaser of oil 51 Common purchaser of gas 52 Relief to common purchaser Common Processor 53 Common processor 54 Relief to common processor Alberta Utilities Commission 55 Powers of Alberta Utilities Commission Operation 56 Effective date of order

Part 10 Borrowing, Guarantees and Advances 65 Power to borrow 66 Guarantee and advances

Part 11 Orphan Fund 68

Definitions 69 Fund continued 70 Purpose of fund 71 Effect of payment from fund 72 Ordinary remedies available 73 Orphan fund levy 74 Payment of levy 75 Notice of levy

RSA 2000

Chapter O-6 OIL AND GAS CONSERVATION ACT 4 76 Appeal of levy 76.1 Special orphan fund levy 76.2 Borrowing and advances 77 Regulations

Part 12 Unit Operation 78

Definitions Agreement to Establish Unit 79 Agreement to establish unit Pooling 80 Pooling 81 Well on tract in drilling spacing unit 82 Application to vary pooling order 83 Drilling costs 84 Inclusion of drilling spacing unit in unit area General 85 Missing or untraceable tract owner 86 Dispute re production 87 Operation of unit area 88 Operating expenses 89 Alteration of orders 90 Effect of agreement

Part 13 Registers, Records and Reports Registered Address of Licensee 91 Appointment of agent Battery Records and Reports 92 Battery of wells 93 Production of records

Part 14 Proceedings Before the Regulator Powers of Regulator 94 Jurisdiction of Regulator 95 Service of notices

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 5

Part 15 Provisions of General Application 96 Inspection 97 Closing area to travel 98 Offset wells 99 Compensation schemes 100 Control, completion and operation costs 101 Entry on land 102 Sale of equipment, etc. 103 Enforcement of lien 104 Escaped substance 105 Enforcement of orders 106 Actions re principals 106.1 Appointment of receiver, receiver manager, trustee, liquidator Offences and Penalties 107 Waste prohibited 108 Offences 109 Limitation period for prosecution 110 Penalties Regulations 110.1 Regulations Cancellation of Industrial Development Permits and Applications 111 Cancellation of permits and applications Subsisting Board Regulations 112 Board regulations deemed to be rules HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Interpretation 1(1) In this Act, (a) “abandonment”, subject to

section 68(a), means the permanent dismantlement of a well or facility in the manner prescribed by the regulations or rules and includes any measures required to ensure that the well or facility is left in a permanently safe and secure condition;

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Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 6 (b) “abandonment costs”, subject to

section 68(b), means the reasonable costs actually incurred in the abandonment of a well or facility; (c) “agent” means an agent appointed under

section 91; (d) “allowable”, when that term is used in connection with a well, means the amount of oil or gas a well is permitted to produce, in accordance with an order of the Regulator for this purpose, after application of any applicable penalty factor; (e) “approval holder” means the holder of an approval granted pursuant to this Act, any predecessor of this Act or a regulation or rules under any of them; (f) “base allowable” means th e amount of production that according to a Regulator order could be taken if no penalty factor, whether its purpose be for proration, for avoidance of waste or for protection of the rights of others, were to be applied; (g) “battery” means a system or arrangement of tanks or other surface equipment receiving the effluents of one or more wells prior to delivery to market or other disposition, and may include equipment or devices for separating the effluents into oil, gas or water and for measurement; (h) “block” means an area or part of a pool consisting of drilling spacing units grouped for the purpose of administering a common, aggregate production allowable; (

i) repealed 2012 cR-17.3 s97(2); (j) “butanes” means, in addition to its normal scientific meaning, a mixture mainly of butanes that ordinarily may contain some propane or pentanes plus; (j.1) “captured carbon dioxide” means captured carbon dioxide as defined in the Mines and Minerals Act; (j.2) “coal deposit” means a na tural accumulation of coal in one or more coal seams as defined in the Coal Conservation Act; (k) “condensate” means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that (

i) is recovered or is recoverable at a well from an underground reservoir and may be gaseous in its virgin

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 7 reservoir state but is liquid at the conditions under which its volume is measured or estimated, or (ii) is recovered from an in situ coal scheme and is liquid at the conditions under which its volume is measured or estimated; (l) “contractor” means a person who undertakes to perform any drilling, service or other operation at the site of a well or facility by agreement (

i) directly with the licensee, approval holder, operator or other person having a right with respect to or an interest in the well or facility, or (ii) with another person who ha s in turn entered directly into an agreement with a person referred to in subclause (i); (m) “Court” means the Court of King’s Bench; (n) “crude bitumen” means a naturally occurring viscous mixture, mainly of hydrocarbons heavier than pentane, that may contain sulphur compounds and that, in its naturally occurring viscous state, will not flow to a well; (o) “crude oil” means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is liquid at the conditions under which its volume is measured or estimated, and includes all other hydrocarbon mixtures so recovered or recoverable except raw gas, condensate or crude bitumen; (p) “dehydrator” means an apparatus designed and used to remove water from raw gas; (q) “drilling spacing unit” means a drilling spacing unit prescribed by or pursuant to the regulations or rules; (r) “enhanced recovery” means the increased recovery from a pool achieved by artificial means or by the application of energy extrinsic to the pool, which artificial means or application includes pressuring, cycling, pressure maintenance or injection to the pool of a substance or form of energy, but does not include the injection in a well of a substance or form of energy for the sole purpose of (

i) aiding in the lifting of fluids in the well, or

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 8 (ii) stimulation of the reservoir at or near the well by mechanical, chemical, thermal or explosive means; (s) “ethane” means, in addition to its normal scientific meaning, a mixture mainly of ethane that ordinarily may contain some methane or propane; (t) “evaluation well” means a well that, when being drilled, is expected by the Regulator to penetrate a pool or oil sands deposit and that is drilled for the sole purpose of evaluation; (u) “experiment” or “experimental scheme” means a scheme or operation for the recovery or processing of oil or gas, including the drilling and completion of wells for production or injection, that uses methods that are untried and unproven in that particular application; (v) “experimental well” means a well drilled, being drilled or operated pursuant to an experimental scheme approved by the Regulator; (w) “facility”, except for the purposes of

Part 11, means any building, structure, installation, equipment or appurtenance over which the Regulator has jurisdiction and that is connected to or associated with the recovery, development, production, handling, processing, treatment or disposal of hydrocarbon-based resources, including synthetic coal gas and synthetic coal liquid, or any associated substances or wastes or the disposal of captured carbon dioxide, and includes, without limitation, (

i) a battery, a processing plant, a gas plant, an oilfield waste management facility, a central processing facility as defined in the rules made under the Oil Sands Conservation Act, a compressor, a dehydrator, a separator, a treater, a custom treating plant, a produced water-injection plant, a produced water disposal plant, a miscible flood injection plant, a satellite or any combination of any of them, (ii) all or part of a facility as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act that is designated under

section 3(3)(

a) as a facility for the purposes of this Act, but does not include

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 9 (iii) a well as defined in this Act, the Geothermal Resource Development Act or the Mineral Resource Development Act, (iv) a pipeline as defined in the Pipeline Act, (

v) a mine site or processing plant as defined in the rules made under the Oil Sands Conservation Act, (vi) a mine site or coal pro cessing plant as defined in the Coal Conservation Act, (vii) a mine site or processing plant as defined in the Mineral Resource Development Act, or (viii) subject to subclause (ii) and the regulations, a facility as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act; (x) “field” means (

i) the general surface area or areas underlain or appearing to be underlain by one or more pools, or (ii) the subsurface regions vertically beneath a surface area or areas referred to in subclause (i); (y) “gas” means raw gas, synthetic coal gas or marketable gas or any constituent of raw gas, synthetic coal gas, condensate, crude bitumen or crude oil that is recovered in processing and that is gaseous at the conditions under which its volume is measured or estimated; (z) “helium” means, in addition to its normal scientific meaning, a mixture mainly of helium that ordinarily may contain some nitrogen and methane; (aa) “holding” means an area established as a holding pursuant to the regulations or rules; (aa.001) “impairment or damage” means impairment or damage that results in or could reasonably be expected to result in harm to the integrity of a well or facility or harm to the environment, human health or safety or property; (aa.01) “in situ coal scheme” means an in situ coal scheme as defined in the Coal Conservation Act; (aa.1) “large facility” means a facility that is

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 10 (

i) a central processing facility as defined in the rules made under the Oil Sands Conservation Act with a Regulator approved design capacity of 5000 cubic metres or more per day, (ii) an oil sands upgrader integrated into a central processing facility as defined in the rules made under the Oil Sands Conservation Act with a Regulator approved design capacity of 5000 cubic metres or more per day, (iii) a processing plant designated by the Regulator as a stand alone straddle plant, or (iv) a gas processing plant that has or has had sulphur recovery, with a sulphur inlet of one tonne or more per day; (bb) “licence” means a licence granted pursuant to this Act or any predecessor of this Act or a regulation under any of them or rules under this Act; (cc) “licensee” means the holder of a licence according to the records of the Regulator and includes a receiver, receiver- manager, trustee or liquidator of property of a licensee and, for greater certainty, includes a person who is a licensee for the purposes of this Act under

section 3(3); (dd) “market demand” means the amount of oil or gas reasonably needed for current consumption, use, storage and working stocks within and outside Alberta; (ee) “marketable gas” means a mixture mainly of methane originating from raw gas, if necessary through the processing of the raw gas for the removal or partial removal of some constituents, and that meets specifications for use as a domestic, commercial or industrial fuel or as an industrial raw material; (ff) “methane” means, in addition to its normal scientific meaning, a mixture mainly of methane that ordinarily may contain some ethane, nitrogen, helium or carbon dioxide; (ff.1) “Minister” means the Mini ster determined under

section 16 of the Government Organization Act as the Minister responsible for this Act; (gg) “natural gas liquids” means propane, butanes or pentanes plus, or a combination of them, obtained from the processing of raw gas or condensate;

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 11 (hh) “oil” means condensate, crude oil or synthetic coal liquid or a constituent of raw gas, condensate or crude oil that is recovered in processing, that is liquid at the conditions under which its volume is measured or estimated; (ii) “oil sands” means (

i) sands and other rock materials containing crude bitumen, (ii) the crude bitumen contained in those sands and other rock materials, and (iii) any other mineral substances, other than natural gas, in association with that crude bitumen or those sands and other rock materials referred to in subclauses (

i) and (ii); (jj) “oil sands deposit” means a natural reservoir containing or appearing to contain an accumulation of oil sands separated or appearing to be separated from any other such accumulation; (kk) “operator”, with respect to a well or facility, means a person who (

i) has control of or undertakes the day to day operations and activities at a well or facility, or (ii) keeps records and submits production reports for a well or facility to the Regulator, whether or not that person is also the licensee or approval holder in respect of the well or facility; (ll) “orphan fund” means the orphan fund continued under

section 69; (mm) “pentanes plus” means a mi xture mainly of pentanes and heavier hydrocarbons that ordinarily may contain some butanes and that is obtained from the processing of raw gas, condensate or crude oil; (nn) “pipeline” means any pipe or any system or arrangement of pipes wholly within Alberta and whereby oil, gas or synthetic crude oil or water incidental to the drilling for or production of oil, gas or synthetic crude oil is conveyed, and includes all property of any kind used for the purpose of, or in connection with, or incidental to, the operation of a pipeline in the gathering, transporting, handling and delivery of oil, gas, synthetic crude oil or water, but does not include any pipe or any system or arrangement of pipes that

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 12 (

i) constitutes a distribution system for the distribution within a community of gas to ultimate consumers, (ii) is used in connection with the development of geothermal resources as defined in the Geothermal Resource Development Act, (iii) is used in the distribution of heat resulting from the development of geothermal resources as defined in the Geothermal Resource Development Act, or (iv) is used in connection with the development of mineral resources as defined in the Mineral Resource Development Act; (oo) “pool” means (

i) a natural underground reservoir containing or appearing to contain an accumulation of oil or gas, or both, separated or appearing to be separated from any other such accumulation, or (ii) in respect of an in situ co al scheme, that portion of a coal deposit that has been or is intended to be converted to synthetic coal gas or synthetic coal liquid; (pp) “processing plant” means a plant for the extraction from gas of hydrogen sulphide, helium, ethane, natural gas liquids or other substances, but does not include a well head separator, treater or dehydrator; (qq) “project” means a pool or part of a pool in which operations in accordance with a scheme for enhanced recovery of oil, approved by the Regulator, are conducted or, if the scheme provides for the application of more than one recovery mechanism, the part of the area subject to the scheme that is subject to one such recovery mechanism; (rr) “propane” means, in addition to its normal scientific meaning, a mixture mainly of propane that ordinarily may contain some ethane or butanes; (ss) “proportionate share” me ans, with respect to a working interest participant, the percentage share equal to the participant’s undivided interest in the well or facility; (tt) “raw gas” means a mixture containing methane, other paraffinic hydrocarbons, nitrogen, carbon dioxide, hydrogen sulphide, helium and minor impurities, or some of them, that is recovered or is recoverable at a well from an

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 13 underground reservoir and that is gaseous at the conditions under which its volume is measured or estimated; (uu) “reclamation” means reclam ation within the meaning of the Environmental Protection and Enhancement Act; (vv) “reclamation costs” mean s the reasonable costs actually incurred in the reclamation of a well, facility, well site or facility site and includes such costs associated with assessment for the purpose of applying for a reclamation certificate under the Environmental Protection and Enhancement Act; (vv.1) “Regulator ” means the Alberta Energy Regulator; (vv.11) “remediation” means remedi ation within the meaning of the Environmental Protection and Enhancement Act; (vv.12) “remediation costs” me ans the reasonable costs actually incurred in the remediation in respect of a well, facility, well site or facility site, and, whether or not an application for a remediation certificate is made, includes such costs associated with assessment for the purpose of applying for a remediation certificate under the Environmental Protection and Enhancement Act; (vv.2) “rules” means rules made pursuant to this Act, unless the context otherwise requires; (ww) “separator” means an unfired apparatus specifically designed and used for separating fluids produced from a well into 2 or more streams, but does not include a dehydrator; (xx) “suspension”, subject to

section 68(f), means the temporary cessation of operations at a well or facility in the manner prescribed by the regulations or rules and includes any measures required to ensure that the well or facility is left in a safe and secure condition; (yy) “suspension costs”, subject to

section 68(g), means the reasonable costs actually incurred in the suspension of a well or facility; (yy.1) “synthetic coal gas” means synthetic coal gas as defined in the Coal Conservation Act; (yy.2) “synthetic coal liquid” means synthetic coal liquid as defined in the Coal Conservation Act;

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 14 (zz) “synthetic crude oil” mean s a mixture, mainly of pentanes and heavier hydrocarbons, that may contain sulphur compounds, that is derived from crude bitumen and that is liquid at the conditions under which its volume is measured or estimated, and includes all other hydrocarbon mixtures so derived; (aaa) “test hole” means a well drilled or being drilled to a depth of more than 150 metres for the primary purpose of obtaining geological or geophysical information and that, when being drilled, is not expected by the Regulator to penetrate a pool or oil sands deposit; (bbb) “treater” means a fired apparatus specifically designed and used for separating gas and water from crude oil; (ccc) “waste”, in addition to its ordinary meaning, means wasteful operations; (ddd) “wasteful operations” means (

i) the locating, spacing, drilling, equipping, completing, operating or producing of a well in a manner that results or tends to result in reducing the quantity of oil or gas ultimately recoverable from a pool under sound engineering and economic principles, (ii) the locating, drilling, equipping, completing, operating or producing of a well in a manner that causes or tends to cause excessive surface loss or destruction of oil or gas, (iii) the inefficient, excessive or improper use or dissipation of reservoir energy however caused, (iv) the failure to use suitable enhanced recovery operations in a pool when it appears probable on the basis of available information that those methods would result in increasing the quantity of oil or gas ultimately recoverable from the pool under sound engineering and economic principles, (

v) the escape or the flaring of gas, if it is estimated that, in the public interest and under sound engineering principles and in the light of economics and the risk factor involved, the gas could be gathered, processed if necessary, and it or the products from it marketed, stored for future marketing, or beneficially injected into an underground reservoir,

RSA 2000

Section 1

Chapter O-6 OIL AND GAS CONSERVATION ACT 15 (vi) the inefficient storing of oil or gas, whether on the surface or underground, or (vii) the production of oil or gas in excess of proper storage facilities or of transportation and marketing facilities or of market demand for it; (eee) “well” means (

i) an orifice in the ground completed or being drilled (

A) for the production of oil or gas, (

B) for injection to an underground formation, (

C) as an evaluation well or test hole, or (

D) to or at a depth of more than 150 metres, for any purpose, or (ii) a well as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act that is designated under subsection 3(3)(

b) as a well for the purposes of this Act, but does not include (iii) an orifice in the groun d completed or being drilled to discover or evaluate a solid inorganic mineral and that does not or will not penetrate a stratum capable of containing a pool or oil sands deposit, or (iv) subject to subclause (ii) and the regulations, a well as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act; (fff) “working interest particip ant” means a person who owns a beneficial or legal undivided interest in a well or facility under agreements that pertain to the ownership of that well or facility; (ggg) “zone” means any stratum or any sequence of strata that is designated by the Regulator as a zone.

RSA 2000

Section 2

Chapter O-6 OIL AND GAS CONSERVATION ACT 16

(2) The decision of the Regulator is final as to whether any product or mixture comes within a definition in subsection (1) or as to whether a definition in subsection (1) is applicable in a particular case. RSA 2000 cO-6 s1;2006 c23 s60;2009 c20 s7;2010 c14 s3; 2011 c11 s5;2012 cR-17.3 s97(2);2020 cG-5.5 s32; 2020 c4 s1(2);2021 cM-16.8 s59;AR 217/2022 Description of land 2 In this Act and in any regulations or rules or orders made pursuant to this Act, land may be described or referred to as if it were surveyed into sections in accordance with the Surveys Act whether or not the land is so surveyed, and reference to a legal subdivision,

section or township in land that is not so surveyed is deemed to refer to that which would be the legal subdivision,

section or township if the land were so surveyed. RSA 2000 cO-6 s2;2012 cR-17.3 s97(33) Application of Act 3(1) This Act applies to every well and facility situated in Alberta whenever drilled or constructed, and to any substance obtained or obtainable from such a well or facility, notwithstanding any terms to the contrary in any lease or grant from the Crown in right of Canada or from any other person.

(2) To the extent provided by the regulations, this Act applies to a well or facility as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act.

(3) The Regulator may (

a) designate all or part of a facility as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act as a facility for the purposes of this Act, and (

b) designate a well as defined in the Geothermal Resource Development Act or the Mineral Resource Development Act as a well for the purposes of this Act and the holder of a licence under the Geothermal Resource Development Act or the Mineral Resource Development Act for such a well or facility is a licensee for the purposes of this Act. RSA 2000 cO-6 s3;2020 cG-5.5 s32; 2021 cM-16.8 s59

RSA 2000

Section 4

Chapter O-6 OIL AND GAS CONSERVATION ACT 17

Part 1 Object and Application of Act Purposes of Act 4 The purposes of this Act are (

a) to effect the conservation of , and to prevent the waste of, the oil and gas resources of Alberta; (

b) to secure the observance of sa fe and efficient practices in the locating, spacing, drilling, equipping, constructing, completing, reworking, testing, operating, maintenance, repair, suspension and abandonment of wells and facilities and in operations for the production of oil and gas or the storage or disposal of substances; (

c) to provide for the economic, orderly, efficient and responsible development in the public interest of the oil and gas resources of Alberta; (c.1) to provide for the responsible management of a well, facility, well site or facility site throughout its life cycle; (

d) to afford each owner the opportunity of obtaining the owner’s share of the production of oil or gas from any pool; (

e) to provide for the recording and the timely and useful dissemination of information regarding the oil and gas resources of Alberta; (

f) to control pollu tion above, at or below the surface in the drilling of wells and in operations for the production of oil and gas and in other operations over which the Regulator has jurisdiction. RSA 2000 cO-6 s4;2010 c14 s3;2012 cR-17.3 s97(31); 2020 c4 s1(3)

Part 2 Repealed 2012 cR-17.3 s97(3).

Part 3 General Powers General powers 7 The Regulator, subject to

section 77, with the approval of the Lieutenant Governor in Council, may make any just and reasonable orders and directions the Regulator considers necessary to effect the purposes of this Act and that are not otherwise specifically authorized by this Act. RSA 2000 cO-6 s7;2012 cR-17.3 s97(31);2020 c4 s1(4)

RSA 2000

Section 8

Chapter O-6 OIL AND GAS CONSERVATION ACT 18 Conditions of approval 8(1) Any order of the Lieutenant Governor in Council under this Act may be made subject to any terms or conditions that the Lieutenant Governor in Council prescribes.

(2) An order of the Lieutenant Governor in Council granting any approval or authorization under this Act and made before June 2, 1972 is not invalid by reason only of the fact that the order was made subject to any terms or conditions.

(3) If the holder of an approval contravenes or fails to comply with any term or condition contained in an order of the Lieutenant Governor in Council approving or authorizing the Regulator’s approval, (

a) the Regulator may cancel an approval granted by it under this Act or may take any other remedial measures that it considers suitable in the circumstances, or (

b) the Lieutenant Governor in Council may amend, vary, add to or replace any terms or conditions contained in the order. RSA 2000 cO-6 s8;2012 cR-17.3 s97(31),(32)

Part 4 Overriding Provisions Overriding provisions 9(1) A provision of (

a) this Act, (

b) the regulations, (b.1) the rules, (

c) a declaration, order or direction of the Regulator pursuant to this Act or in any matter over which the Regulator has jurisdiction, (

d) an order of the Alberta Utilities Commission in a matter in which its jurisdiction arises from an order under this Act, (

e) an order of the Gas Utilities Board on any application or matter referred to it by the Alberta Energy Regulator, or (

f) an order of the Lieutenant Governor in Council under this Act,

RSA 2000

Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 19 overrides the terms and conditions of any contract or other arrangement conflicting with the provisions of this Act or the regulations, the rules or a declaration, order or direction.

(2) No terms or conditions of a contract or other arrangement that conflict with a provision referred to in subsection (1) are enforceable or give rise to any cause of action by any party against any other party to the contract or arrangement.

(3) This

section does not apply to a franchise conferred by statute, or to a contract or arrangement entered into pursuant to a statute and between a municipal corporation or Metis settlement and a person supplying gas to the ultimate consumer, insofar as the franchise, contract or arrangement relates to the supply or distribution of gas within the municipality or settlement area. RSA 2000 cO-6 s9;2007 cA-37.2 s82(20);2012 cR-17.3 s97(4)

Part 5 Rules Rules 10(1) The Regulator may make rules (

a) prescribing the information that is to be included in or is to accompany any application under this Act or the rules; (

b) requiring licensees and approval holders to provide to the Regulator deposits or other forms of security to guarantee the proper and safe suspension, abandonment and reclamation of wells and facilities and the carrying out of any other activities necessary to ensure the protection of the public and the environment, including rules respecting the amount and form of those deposits and security and how they may be used, retained, forfeited and returned; (

c) respecting the service of and the making of payments under a notice of garnishment under

section 103; (

d) as to the licensing, approv al, transfer, location, equipping and operation of facilities; (

e) prohibiting the drilling of a well at any point within a prescribed distance of any boundary, roadway, road allowance, right of way, building of any specified type, or any specified works either public or private; (

f) requiring notice to the Regulator of intention and approval of the Regulator before

RSA 2000

Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 20 (

i) the suspension of normal drilling or normal producing or injecting operations, (ii) the abandonment of a well, (iii) the reconditioning or recompletion of a well, (iv) the removal of casing from a well, (

v) the resumption of drilling operations after a previous completion, suspension or abandonment of a well, (vi) the resumption of producing or injecting operations at a well after a previous suspension, or (vii) the commencement of the injection of gas, air, water or other substance to an underground formation in a well that has been drilled or operated for another purpose; (

g) governing multi-zone wells, prohibiting completion of a well as a multi-zone well without the permission of the Regulator, and prohibiting the use of a well for the production from or injection to more than one zone without the approval of the Regulator; (

h) prescribing normal drilling spacing units and providing for the establishment of other drilling spacing units; (

i) prescribing and describing the part of a drilling spacing unit within which a well is to be completed, and providing penalties for completing the well in other parts of the drilling spacing unit; (

j) providing for the establishment of blocks; (

k) prescribing rules by which the base allowable of a well in a drilling spacing unit or of a block or project may be determined; (

l) providing for the establishment of holdings and prescribing the rules to be applied within holdings; (

m) requiring the erection of fences and the posting of signs or licences at a well or battery; (

n) governing the removal of rigs, derricks or other equipment from a well; (

o) respecting the drilling and completion of wells;

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Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 21 (

p) respecting the repair of wells; (p.1) respecting reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site; (

q) respecting the suspension and abandonment of wells and facilities, including the circumstances under which a well or facility must be suspended or abandoned, the timing of such suspension or abandonment and the manner in which suspension and abandonment are to be carried out; (

r) respecting costs of providing reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, remediation costs and reclamation costs in respect of wells, facilities, well sites and facility sites; (

s) respecting economic limit tests and throughput rates; (

t) exempting facilities for the purposes of

section 12 and exempting facilities and equipment for the purposes of

section 32; (

u) as to the kind and specification of tools, casing, equipment and materials that may be used for drilling, and as to the construction, alteration or use of any works, fittings, machinery, plant or appliance in and for the development, production, transmission, supply, distribution, measurement, consumption or handling of any gas or oil; (u.1) as to the kind and specification of tools, casing, equipment and materials that may be used for drilling, and as to the construction, alteration or use of any works, fittings, machinery, plant or appliance in and for the transmission, supply, distribution, measurement or handling of substances to be stored or disposed of pursuant to a scheme approved under

section 39(1); (

v) requiring the provision of adequate well casing and the proper anchorage and cementation of well casing; (

w) as to the measures to be adopted to confine any injected fluid or other substance to the underground formation into which it is injected; (

x) prohibiting the drilling through oil, gas, water, coal or other minerals without taking adequate measures to confine oil, gas or water to its original stratum and to protect that stratum or any coal seam or other mineral deposit or any

RSA 2000

Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 22 workings in it from infiltration, inundation, migration or injury, and prescribing the nature and extent of those measures; (x.1) prohibiting the drilling through underground formations used for storage or disposal of substances without taking adequate measures to confine the injected substances to those formations; (x.2) respecting the measures to be taken before the commencement of drilling and during drilling to confine substances likely to be encountered in an underground formation used for storage or disposal of substances; (

y) respecting the approval, location, equipping, operation and abandonment of experimental schemes; (

z) prescribing the measures to be taken before the commencement of drilling and during drilling to conserve any gas, oil or water likely to be encountered; (aa) as to the location of wells and the methods of operation to be observed during drilling and in the subsequent management and conduct of any well for any purpose including, without restricting the generality of the foregoing, (

i) the protection of life, property and wildlife, (ii) the prevention and ex tinguishment of fires, and (iii) the prevention of wells blowing out of control; (bb) as to operations for the conditioning or reconditioning of wells by mechanical, chemical or explosive means, and as to the notices to be given of intention to so condition or recondition a well; (cc) as to the inspection of wells both during and after drilling; (dd) providing for the capping of or otherwise closing in of wells for the purpose of preventing waste; (ee) requiring the combustion of vented gas; (ff) requiring and prescribing the taking and method of taking of samples of any kind; (gg) requiring and prescribing any tests, analyses, surveys and logs;

RSA 2000

Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 23 (hh) requiring the submission to the Regulator of samples, information obtained by tests, analyses, surveys or logs, or any other well or reservoir data; (ii) prescribing rules for the calculation of allowables, maximum production rates, penalty factors, penalties and overproduction status; (jj) respecting the prorationing of crude oil for the purposes of

section 34; (kk) as to the records to be kept, their manner and form, the persons by whom and the place at which they are to be kept and the length of time they are to be kept, and providing for their submission to the Regulator; (ll) requiring the provision of reports and other information and respecting the persons who must provide such reports and information, the persons to whom and time at which they must be provided and their form and contents; (mm) as to the records, reports and information submitted to or acquired by the Regulator under this Act that shall be confidential, and as to when and to whom the information contained in them may be made available; (nn) respecting the eligibility requirements in order to become and remain a licensee, approval holder or agent or to acquire and hold an identification code; (oo) respecting appeals for the purposes of

section 14; (pp) providing for official well names and a register of them; (qq) limiting the length of well names and prescribing what may be included in a well name; (rr) limiting the length of batte ry names and prescribing what may be included in a battery name; (ss) providing for the registration and use of battery names; (tt) prescribing methods to be used for the measurement of oil, gas or products derived from oil or gas, and water, and the standard conditions to which those measurements are to be converted; (uu) exempting facilities from the application of

Part 11; (uu.1) exempting wells from the application of

Part 11;

RSA 2000

Section 10

Chapter O-6 OIL AND GAS CONSERVATION ACT 24 (uu.2) exempting pipelines from the application of

Part 11; (vv) respecting appeals referred to in

section 76; (ww) respecting applications to the Regulator for payment of money out of the orphan fund for the purposes referred to in

section 70(1) and respecting the payment of money by the Regulator for those purposes; (xx) respecting the definition of “resident” for the purposes of

section 91; (xx.1) respecting the exemption of licensees or approval holders or classes of licensees or approval holders from the application of some or all of the requirements in

section 91, subject to any terms and conditions provided for in the rules, including the substitution of any other requirements; (yy) establishing a

schedule of fees (

i) pertaining to any application or any proceeding under this Act or the rules, (ii) for any map, report, document or other record of the Regulator, and (iii) for any other service provided by the Regulator; (yy.1) exempting wells that are in cluded within an in situ coal scheme from the application of specified provisions of the rules; (zz) prescribing forms to be used under this Act or the rules; (aaa) generally to conserve oil and gas, and to prevent waste or improvident disposition of oil or gas, and to do any other matter reasonably incidental to the development and drilling of any oil or gas wells, the operation of them and the production from them; (bbb) respecting compliance with and enforcement of ALSA regional plans.

(2) The Regulator, with the approval of the Minister of Environment and Protected Areas, may make rules (

a) restricting drilling and producing operations in water covered areas, and prescribing any special measures to be taken in those operations;

RSA 2000

Section 11

Chapter O-6 OIL AND GAS CONSERVATION ACT 25 (

b) as to the location of wells and facilities and the methods of operation to be observed during drilling and construction and in the subsequent management and conduct of any operations for the prevention of pollution; (

c) prescribing the measures to be taken to control pollution above, at or below the surface in the drilling of wells and in operations for the production of oil and gas and in other operations over which the Regulator has jurisdiction.

(3) If rules made pursuant to subsection (1) or (2) authorize the Regulator to approve any operation, the Regulator may prescribe conditions under which it grants approval in any case.

(4) If rules under subsection (1)(

a) have prescribed the information to be included in or to accompany an application pursuant to a given provision of this Act or the rules, the Regulator is not precluded from considering or acting on an application pursuant to that provision that does not contain that information or from requiring additional information.

(5) When no form has been prescribed pursuant to subsection (1)(zz) for use under a provision of this Act or the rules, the Regulator may prescribe or accept any form it considers suitable.

(6) Rules made pursuant to subsection (1)(mm) respecting confidentiality of records, reports or information submitted to or acquired by the Regulator under this Act prevail despite the Access to Information Act. RSA 2000 cO-6 s10;2002 c12 s5;2008 c7 s5;2009 cA-26.8 s85; 2009 c20 s7;2010 c14 s3;2011 c11 s5;2012 cR-17.3 s97(6); 2020 c4 s1(5);2022 c21 s59;AR 141/2025

Part 6 Licences and Approvals Requirement for licence 11(1) No person shall commence to drill a well or undertake any operations preparatory or incidental to the drilling of a well or continue any drilling operations, any producing operations or any injecting operations unless (

a) a licence has been issued and is in full force and effect, and (

b) the person is the licensee.

(2) Notwithstanding subsection (1), (

a) the site for a well may be surveyed,

RSA 2000

Section 12

Chapter O-6 OIL AND GAS CONSERVATION ACT 26 (a.1) on the direction or with the consent of the Regulator, a delegated authority under

Part 11 may continue producing or injecting operations where it takes over the management and control of a well under

section 105, or (

b) on the direction or with the consent of the Regulator, operations to suspend or abandon a well may be undertaken, without a licence or by a person other than the licensee.

(2.1) Where a delegated authority takes over management and control of a well and is not the owner or holder of the mineral rights associated with the well, the delegated authority shall not undertake any production without the consent of the owner or holder of the mineral rights and the person who has the right to win, work and recover the minerals.

(3) No well shall be drilled elsewhere than at the exact location specified in the licence or, if the licence has been amended with respect to the location of the well, at the exact location specified in the amendment. RSA 2000 cO-6 s11;2012 cR-17.3 s97(31);2020 c4 s1(6) Licence or approval for facility 12(1) No person shall commence to construct or to operate a facility or undertake any operations preparatory or incidental to the construction or operation of a facility or continue any construction or operation of a facility unless (

a) a licence or approval has be en granted and is in full force and effect and the person is the licensee or approval holder, or (

b) the facility is exempt from the requirement of a licence or approval by rules or by direction of the Regulator.

(2) Notwithstanding subsection (1), (

a) the site for a facility may be surveyed, (a.1) on the direction or with the consent of the Regulator, a delegated authority under

Part 11 may continue operations referred to in subsection (1) where it takes over the management and control of a facility under

section 105, or (

b) on the direction or with the consent of the Regulator, operations to suspend or abandon a facility may be undertaken,

RSA 2000

Section 13

Chapter O-6 OIL AND GAS CONSERVATION ACT 27 without a licence or approval or by a person other than the licensee or approval holder.

(2.1) Where a delegated authority takes over management and control of a facility and is not the owner or holder of the mineral rights associated with the facility, the delegated authority shall not undertake any production without the consent of the owner or holder of the mineral rights and the person who has the right to win, work and recover the minerals. RSA 2000 cO-6 s12;2012 cR-17.3 s97(7);2020 c4 s1(7) Transitional 13 Where, by virtue of the operation of

section 12, on June 30, 2000 a licence is required in respect of an existing unlicensed facility, the Regulator shall (

a) designate a working interest participant who meets the requirements of this Act for a licensee as the person to whom a licence will be granted, and (

b) subject to

section 14, grant a licence to that person, and for that purpose this Act applies in respect of the granting of the licence as if the working interest participant had applied for a licence. RSA 2000 cO-6 s13;2012 cR-17.3 s97(31) Appeal 14 A working interest participant who is designated under

section 13 may appeal to the Regulator in accordance with the rules. RSA 2000 cO-6 s14;2012 cR-17.3 s97(8) Application for licence 15(1) An application for a licence shall be submitted to the Regulator on the form prescribed by and obtainable from the Regulator.

(2) An application under subsection (1) shall be accompanied with the prescribed fee, if any.

(3) No person shall apply for a licence for a well for the purpose of obtaining production from the same pool as that from which another well is obtaining or capable of obtaining production in the same drilling spacing unit unless the Regulator, if it believes special circumstances warrant it, authorizes the making of the application or unless the wells are required for the operation of an experimental scheme that has been approved by the Regulator. RSA 2000 cO-6 s15;2012 cR-17.3 s97(31)

RSA 2000

Section 16

Chapter O-6 OIL AND GAS CONSERVATION ACT 28 Entitlement for well licence 16(1) No person shall apply for or hold a licence for a well (

a) for the recovery of oil, gas or crude bitumen, or (

b) for any other authorized purpose unless that person is a working interest participant and is entitled to the right to produce the oil, gas or crude bitumen from the well or to the right to drill or operate the well for the other authorized purpose, as the case may be.

(2) If, after 30 days from the mailing of a notice by the Regulator to a licensee at the licensee’s last known address, the licensee fails to prove entitlement under subsection (1) to the satisfaction of the Regulator, the Regulator may cancel the licence or suspend the licence on any terms and conditions that it may specify.

(3) Where a licence is cancelled or suspended pursuant to subsection (2), (

a) all rights conveyed by the licence are similarly cancelled or suspended, and (

b) notwithstanding the cancellation or suspension of the licence, the liability of the licensee to complete or abandon the well and reclaim the well site or suspend operations as the Regulator directs continues after the cancellation or suspension. RSA 2000 cO-6 s16;2012 cR-17.3 s91(31) Entitlement for facility licence 17(1) No person shall apply for or hold a licence for a facility unless that person is a working interest participant.

(2) If, after 30 days from the mailing of a notice by the Regulator to a licensee at the licensee’s last known address, the licensee fails to prove to the satisfaction of the Regulator that it is a working interest participant in the facility, the Regulator may cancel or suspend the licence on any terms and conditions that it may specify.

(3) Where a licence is suspended or cancelled pursuant to subsection (2), (

a) all rights conveyed by the licence are similarly cancelled or suspended, and (

b) notwithstanding the cancellation or suspension of the licence, the liability of the licensee to abandon the facility

RSA 2000

Section 18

Chapter O-6 OIL AND GAS CONSERVATION ACT 29 and reclaim the facility site or suspend operations as the Regulator directs continues after the cancellation or suspension. RSA 2000 cO-6 s17;2012 cR-17.3 s97(31) Granting of licence 18(1) On receiving an application for a licence, the Regulator may grant the licence subject to any conditions, restrictions and stipulations that may be set out in or attached to the licence or it may refuse the licence.

(2) When the Regulator has refused a licence, the Lieutenant Governor in Council, in the Lieutenant Governor in Council’s discretion, may review the application and may direct the Regulator to issue the licence.

(3) The Regulator shall keep a record of licences granted. RSA 2000 cO-6 s18;2012 cR-17.3 s97(31) Location of road in licence 19(1) The Regulator may, where a licensee requires a road to give the licensee access to the licensee’s well site, prescribe in a licence the location of the road and conditions relating to its construction.

(2) If an application is made under the Surface Rights Act or the Metis Settlements Act for a right of entry order in respect of land necessary for a road the location of which has been prescribed under subsection (1), the Land and Property Rights Tribunal, Land Access Panel or Existing Leases Land Access Panel shall, if it grants a right of entry order for that road, grant a right of entry to land in the same location as the location prescribed under subsection (1). (3),

(4) Repealed 2012 cR-17.3 s97. RSA 2000 cO-6 s19;2012 cR-17.3 s97(9),(31);2020 cL-2.3 s33 Additional requirements of licensee 20 No person shall acquire or hold a licence or approval unless the person meets the eligibility requirements set out in the regulations or rules and, in the case of a corporation, is (

a) registered, with an active status, under the Business Corporations Act, (

b) incorporated by or under

an Act of the Legislature, other than the Business Corporations Act, and approved by the Regulator as a corporation that may acquire or hold a licence, (

c) incorporated under the Bank Act (Canada),

RSA 2000

Section 21

Chapter O-6 OIL AND GAS CONSERVATION ACT 30 (

d) a railway company incorp orated under

an Act of the Parliament of Canada, (

e) registered under the Loan and Trust Corporations Act, or (

f) an insurer licensed under the Insurance Act. RSA 2000 cO-6 s20;RSA 2000 cI-3 s867; 2012 cR-17.3 s97(31),(33) Identification codes 21(1) No person shall apply for a licence or approval unless the person holds a subsisting identification code issued under this section.

(2) An application for an identification code must (

a) be made in the form and manner and contain the information required under the rules, and (

b) be accompanied with the fee prescribed in the rules.

(3) Where the Regulator is satisfied that the applicant meets the eligibility requirements of the rules for holding an identification code, the Regulator may issue the identification code.

(4) The Regulator may issue an identification code subject to any terms and conditions it considers appropriate.

(5) The Regulator shall keep a record of identification codes issued under this section.

(6) Operator’s identification codes that were issued by the Regulator before June 30, 2000 are deemed to be identification codes issued under this section, and the existing terms and conditions continue to apply. RSA 2000 cO-6 s21;2012 cR-17.3 s97(10) Terms and conditions 22 The Regulator may impose any terms and conditions it considers appropriate on the holder of an identification code, licence or approval or on the identification code, licence or approval if (

a) the Regulator has reasonable grounds to believe that (

i) there has been a contravention of any Act or regulation or rules under the jurisdiction of the Regulator or a direction or order of the Regulator in respect of the operations of the holder, or

RSA 2000

Section 23

Chapter O-6 OIL AND GAS CONSERVATION ACT 31 (ii) the holder ceases to meet the eligibility requirements under this Act and the regulations and rules for holding the identification code, licence or approval, or (

b) the holder is named in a declaration under

section 106. RSA 2000 cO-6 s22;2012 cR-17.3 s97(11) Reworking wells and facilities 23(1) When the records of the Regulator indicate that a well or facility is suspended or abandoned, no person other than (

a) the approval holder or licensee, or (

b) a person acting under a direct ion or with the consent of the Regulator, shall undertake operations with respect to that well or facility until that person applies for and obtains a licence or approval.

(2) The provisions of this Act and the regulations or rules regarding an application for a licence or approval apply to an application under subsection (1) unless the Regulator otherwise directs.

(3) On the granting of a licence or approval on an application under subsection (1), the holder of the former licence or approval for the well or facility is relieved from all obligations under this Act with respect to the well or facility except as to outstanding debts to the Regulator or to the account of the orphan fund in respect of suspension or abandonment costs. RSA 2000 cO-6 s23;2012 cR-17.3 s97(31),(33) Captured carbon dioxide wells, facilities and schemes 23.1 Where the Regulator receives notice under

Part 9 of the Mines and Minerals Act that the Crown has assumed the obligations of an owner and licensee with respect to a well or facility or the obligations of an approval holder with respect to a scheme, (

a) the Regulator shall amend th e licence or approval to reflect that the Crown is the holder of the licence for that well or facility or the approval holder for that scheme, and (

b) the former holder of the licence for the well or facility or approval for the scheme is relieved from all obligations under this Act with respect to the well or facility or scheme, as the case may be, except as to outstanding debts to the Regulator. 2010 c14 s3;2012 cR-17.3 s97(31)

RSA 2000

Section 24

Chapter O-6 OIL AND GAS CONSERVATION ACT 32 Transfer of licence 24(1) A licence shall not be transferred without the consent in writing of the Regulator.

(2) The Regulator may consent to the transfer of a licence subject to any conditions, restrictions and stipulations that the Regulator may prescribe, or the Regulator may refuse to consent to the transfer of a licence.

(3) The transfer shall be in the form prescribed and shall have endorsed on or attached to it proof of execution satisfactory to the Regulator.

(4) The applicant shall submit the transfer to the Regulator together with the prescribed fee.

(5) The Regulator shall keep a record of every transfer to which it has given consent.

(6) The Regulator may direct that a licence be transferred to a person who agrees to accept it and who, in the opinion of the Regulator, has the right to receive it, and the direction of the Regulator has the same effect as a transfer consented to under this section.

(7) A transfer of a licence has no effect until the Regulator has consented to, or directed, a transfer of the licence under this section. RSA 2000 cO-6 s24;2012 cR-17.3 s97(31) Cancellation and suspension 25 The Regulator may (

a) cancel a licence or approval or suspend a licence or approval for a definite or indefinite period if the Regulator determines that a contravention of this Act, the regulations or rules or an order or direction of the Regulator has occurred with respect to the well or facility to which the licence or approval relates, (

b) cancel a licence for a well if drilling has not commenced within 6 months after the licence was granted, (

c) cancel a licence or approval for a facility if construction has not commenced within one year after the licence or approval was granted, (

d) cancel a licence or approval at the request of the licensee or approval holder, and

RSA 2000

Section 26

Chapter O-6 OIL AND GAS CONSERVATION ACT 33 (

e) issue a new licence or approval in place of a cancelled licence or approval. RSA 2000 cO-6 s25;2012 cR-17.3 s97(31),(33) Amendment of licence or approval 26(1) An application to amend a licence or approval must be submitted to the Regulator.

(2) The Regulator, in its discretion, may (

a) amend the licence or appr oval in accordance with the application, (

b) after notifying the licensee or approval holder of its intention to do so, amend the licence or approval otherwise as it considers fit, or (

c) refuse the application.

RSA 2000 cO-6 s26;2012 cR-17.3 s97(31) Security deposit 26.1 Where, on the written request of a licensee of a large facility or one or more working interest participants who have a 50% or greater share in a large facility, the Regulator requires the licensee to provide a security deposit in respect of the large facility, each working interest participant in the large facility is responsible for paying its share of the security deposit to the licensee in proportion to its share in the facility. 2009 c20 s7;2012 cR-17.3 s97(31) Reasonable care, measures to prevent impairment or damage 26.2(1) A licensee or approval holder shall provide reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site.

(2) If, in the opinion of the Regulator, a licensee or approval holder has failed or is unable to provide reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site, the working interest participants in the well, facility, well site or facility site shall provide reasonable care and measures to prevent impairment or damage in respect of the well, facility, well site or facility site.

(3) If reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site are not being provided in a manner satisfactory to the Regulator, the Regulator may order the licensee, a working interest participant or a delegated authority under

Part 11 to provide reasonable care and

RSA 2000

Section 27

Chapter O-6 OIL AND GAS CONSERVATION ACT 34 measures to prevent impairment or damage in respect of the well, facility, well site or facility site and may impose any terms or conditions that the Regulator determines are necessary in the order.

(4) The provision of reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site must be carried out in accordance with the rules and any terms or conditions imposed by the Regulator. 2020 c4 s1(8) Suspension and abandonment 27(1) Subject to subsection (2), a licensee or approval holder shall suspend or abandon a well or facility when directed by the Regulator or required by the regulations or rules.

(2) Notwithstanding subsection (1), (

a) if the Regulator so direct s, a well or facility must be suspended or abandoned by a working interest participant other than the licensee or approval holder, and (

b) with the consent of the Regulator, a well or facility may be suspended by a working interest participant other than the licensee or approval holder.

(3) The Regulator may order that a well or facility be suspended or abandoned where the Regulator considers that it is necessary to do so in order to protect the public or the environment.

(4) A suspension or abandonment must be carried out in accordance with the regulations or rules. RSA 2000 cO-6 s27;2012 cR-17.3 s97(31),(33) Suspension, abandonment by Regulator 28 If, in the opinion of the Regulator, a well or facility is not suspended or abandoned in accordance with a direction of the Regulator or the regulations or rules, the Regulator may (

a) authorize any person to suspend or abandon the well or facility, or (

b) suspend or abandon the well or facility on the Regulator’s own motion. RSA 2000 cO-6 s28;2012 cR-17.3 s97(31),(32),

(33) Continuing liability 29 Abandonment of a well or facility does not relieve the licensee, approval holder or working interest participant from responsibility for the control or further abandonment of the well or facility or from the responsibility for the costs of doing that work. 2000 c12 s1(15)

RSA 2000

Section 30

Chapter O-6 OIL AND GAS CONSERVATION ACT 35 Costs 30(1) Subject to subsection (2), the suspension costs, abandonment costs, remediation costs and reclamation costs for a well and well site or facility and facility site must be paid by each working interest participant in accordance with their proportionate share in the well or facility.

(1.1) Subject to subsection (2), the costs paid by a person who is subject to an order under

section 26.2(3) in providing reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site must be paid by each working interest participant in accordance with their proportionate share in the well or facility.

(2) The Regulator may determine the costs referred to in subsection (1) or (1.1) (

a) on the application of the person who provided the reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site, or conducted the suspension, abandonment, remediation or reclamation, in the case of a well or facility that was operated, suspended, abandoned, remediated or reclaimed by a licensee, approval holder, working interest participant or agent, or (

b) on the Regulator’s own motion, in the case of a well or facility suspended, abandoned, remediated or reclaimed by a person authorized by the Regulator, and the Regulator shall allocate those costs to each working interest participant in accordance with their proportionate share in the well or facility and shall prescribe a time for payment.

(3) A working interest participant that fails to pay its share of costs as determined under subsection (2) within the period of time prescribed by the Regulator must pay, unless the Regulator directs otherwise, a penalty equal to 25% of its share of the costs.

(4) Where a well, facility, well site or facility site is suspended, abandoned, remediated or reclaimed by a licensee, approval holder, working interest participant or agent, the costs as determined under subsection (2), together with any penalty prescribed by the Regulator under subsection (3), constitute a debt payable to the licensee, approval holder, working interest participant or agent who carried out the suspension, abandonment, remediation or reclamation.

RSA 2000

Section 31

Chapter O-6 OIL AND GAS CONSERVATION ACT 36

(5) Where a well, facility, well site or facility site is suspended, abandoned, remediated or reclaimed by the Regulator or by a person authorized by the Regulator, the costs as determined under subsection (2), together with any penalty prescribed by the Regulator under subsection (3), constitute a debt payable to the Regulator.

(6) A certified copy of the order of the Regulator determining the costs and penalty under this

section and the allocation of those costs to each working interest participant in the well or facility may be filed in the office of the clerk of the Court of King’s Bench and, on being filed and on payment of any fees prescribed by law, the order may be entered as a judgment of the Court and may be enforced according to the ordinary procedure for enforcement of judgments of the Court. RSA 2000 cO-6 s30;2012 cR-17.3 s97(31),(32);2020 c4 s1(9); AR 217/2022 Deemed working interest participant 31(1) Where (

a) a transaction occurs that resu lts in a person no longer being a working interest participant in a well or facility, (

b) the successor working interest participant is a person other than the licensee of the well or facility, and (

c) the successor working interest participant fails to pay its proportionate share of the suspension costs, abandonment costs, remediation costs and reclamation costs, the Regulator may deem the person referred to in clause (

a) to continue to be a working interest participant for the purposes of sections 27 to 30 and

Part 11 if subsection (2) applies.

(2) The Regulator may deem as provided in subsection (1) if (

a) in the case of a well, the tr ansaction occurred after the well ceased to meet the economic limit test set out in the regulations or rules, or (

b) in the case of a facility, the transaction occurred after the facility ceased operation or after the facility has throughput that is less than the rate prescribed in the regulations as sufficient to warrant deeming the facility to be active. RSA 2000 cO-6 s31;2012 cR-17.3 s97(31),(33);2020 c4 s1(10) Deemed licensee 31.1 Where

RSA 2000

Section 32

Chapter O-6 OIL AND GAS CONSERVATION ACT 37 (

a) the licensee of a large facility (referred to in this

section as the “transferor”) transfers the licence to another person (referred to in this

section as the “transferee”) in accordance with

section 24, (

b) within 24 months of the transfer (

i) the transferee has become bankrupt or insolvent, or (ii) in the case of a transf eree that is a corporation, (

A) the transferee’s status is inactive, or the transferee is dissolved, under the Business Corporations Act, or (

B) the corporate registry status of the transferee is struck or rendered liable to be struck under the legislation governing the transferee, and (

c) the Regulator determines that the transfer has resulted in suspension costs, abandonment costs, remediation costs and reclamation costs being transferred without a corresponding value in assets being transferred, the Regulator may deem the transferor to be the licensee of the large facility. 2009 c20 s7;2012 cR-17.3 s97(31);2020 c4 s1(11) Extended obligation 32 Where a provision of this Act or the regulations or rules or an order of the Regulator imposes a responsibility, obligation or liability on a licensee, approval holder or working interest participant in respect of the reasonable care and measures to prevent impairment or damage or the operation, suspension, abandonment, remediation or reclamation in respect of a well, facility, well site or facility site or in respect of any matter arising out of the reasonable care and measures to prevent impairment or damage or the operation, suspension, abandonment, remediation or reclamation in respect of a well, facility, well site or facility site, the responsibility, obligation or liability extends also to associated equipment and non-licensed facilities that are located on the site or used in connection with the reasonable care and measures to prevent impairment or damage or the operation, suspension, abandonment, remediation or reclamation in respect of the well, facility, well site or facility site, unless such equipment or facilities are exempted from the application of the provision by the regulations or rules.

RSA 2000 cO-6 s32;2012 cR-17.3 s97(33);2020 c4 s1(12)

RSA 2000

Section 33

Chapter O-6 OIL AND GAS CONSERVATION ACT 38

Part 7 Production Designation of Fields, etc. Regulation of production 33(1) The Regulator may, by order, (

a) designate a field by describi ng the surface area of the field; (

b) designate a pool by descri bing the surface area vertically above the pool and by naming the geological formation, member or zone in which the pool occurs or by some other method of identification that the Regulator in any case considers suitable; (

c) designate the area that is to be allocated to a well in connection with fixing allowable production; (

d) designate any stratum or sequ ence of strata as a zone, either generally or in respect of any designated area or any specified well or wells.

(2) If a dispute arises in the application of a pool or zone designation made by the Regulator, the dispute shall be referred to the Regulator and its decision on it is final. RSA 2000 cO-6 s33;2012 cR-17.3 s97(31) Prorationing of Oil Prorationing of oil 34(1) The Regulator may, by order, restrict the amount of oil and gas produced in association with the oil that may be produced from a pool or pools in Alberta (

a) by determining the market demand for a stream or streams of crude oil within a pipeline or pipelines, and (

b) by allocating that market demand in a reasonable manner among the wells or group of wells supplying the pipeline or pipelines for the purpose of giving each well owner the opportunity of producing or receiving a just and equitable share of the crude oil in the pool or pools.

(2) This

section does not apply in respect of condensate, pentanes plus, crude bitumen or synthetic crude oil. RSA 2000 cO-6 s34;2012 cR-17.3 s97(31)

RSA 2000

Section 36

Chapter O-6 OIL AND GAS CONSERVATION ACT 39 Ethane Supply for Straddle Plants 35 Repealed RSA 2000 cO-6 s35. Rateable Take of Gas Rateable take 36(1) The Regulator may, by order, restrict (

a) the amount of gas, or (

b) where gas is produced in association with oil, the amount of gas and oil, that may be produced during a period defined in the order from a pool in Alberta.

(2) The restriction referred to in subsection (1) may be imposed by either or both of the following means: (

a) by limiting, if the limitation appears to be necessary, the total amount of gas that may be produced from the pool or part of the pool, having regard to the demand for gas from the pool or to the efficient use of gas for the production of oil, or to both of those considerations; (

b) by distributing the amount of gas that may be produced from the pool or part of the pool in an equitable manner among the wells or groups of wells in the pool for the purpose of giving each well owner the opportunity of receiving the well owner’s share of gas in the pool. RSA 2000 cO-6 s36;2012 cR-17.3 s97(31) Conservation Projects Disposal of water 37 The Regulator may, by order, (

a) control and regulate the production of oil, gas and water by restriction, proration or prohibition, or (

b) require the disposal into an underground formation or otherwise, in accordance with any terms and conditions that the Regulator may prescribe, of any water produced. RSA 2000 cO-6 s37;2012 cR-17.3 s97(31) Prevention of waste 38 In order to prevent waste, the Regulator, with the approval of the Lieutenant Governor in Council, may

RSA 2000

Section 39

Chapter O-6 OIL AND GAS CONSERVATION ACT 40 (

a) require enhanced recovery operations in any pool or portion of a pool, and for or incidental to that purpose require the introduction or injection into the pool or portion of a pool of gas, air, water or other substance or a form of energy, and (

b) require that any gas, on its production, be gathered, processed if necessary, and the gas or products from it marketed or injected into an underground reservoir for storage or for any other purpose. RSA 2000 cO-6 s38;2012 cR-17.3 s97(31) Approval of scheme 39(1) No scheme for (

a) enhanced recovery in any field or pool, (

b) the processing or underground storage of gas, (

c) the gathering, storage and disposal of water produced in conjunction with oil or gas, (

d) the storage or disposal of any fluid or other substance to an underground formation through a well, (

e) an experiment in any field, pool or well, (

f) the concurrent production of an oil accumulation and its associated gas cap, or (

g) the storage, treatment, processing or disposal of oil field waste may be proceeded with unless the Regulator, by order, has approved the scheme on any terms and conditions that the Regulator prescribes.

(1.1) The Regulator may not approve a scheme for the disposal of captured carbon dioxide to an underground formation under subsection (1)(

d) that is pursuant to an agreement under

Part 9 of the Mines and Minerals Act unless the lessee of that agreement satisfies the Regulator that the injection of the captured carbon dioxide will not interfere with (

a) the recovery or conservation of oil or gas, or (

b) an existing use of the underground formation for the storage of oil or gas. (2) to

(6) Repealed 2012 cR-17.3 s97(12). RSA 2000 cO-6 s39;2010 c14 s3;2012 cR-17.3 s97(12)

RSA 2000

Section 40

Chapter O-6 OIL AND GAS CONSERVATION ACT 41 Prohibition against injunction 40 The performance of any act required to be done under

section 38 or of any scheme approved under

section 39 shall not be prevented or restrained by an injunction, judgment or order of any court. RSA 1980 cO-5 s27 Escape of oil, gas, water or substance 41(1) If at any time the flow or escape of oil, gas, water or any other substance from a facility, or from a well or any underground formation that the well enters, is not prevented or controlled, the Regulator may take any means that appear to it to be necessary or expedient in the public interest to prevent or control the flow or escape.

(2) Any action taken by the Regulator pursuant to subsection (1) is governed by

section 105(2) to (6) insofar as those provisions are applicable. RSA 2000 cO-6 s41;2010 c14 s3;2012 cR-17.3 s97(31) Production and Use of Gas Gas wells 42 No well may be produced as a gas well from a pool that, in the opinion of the Regulator, is or could be commercially productive of oil except in accordance with a scheme for concurrent production of the pool approved under

section 39, or in some other manner approved by the Regulator as not detrimental to the recovery of hydrocarbons from the pool. RSA 2000 cO-6 s42;2012 cR-17.3 s97(31) 43 Repealed 2011 c11 s5.

Part 8 Shut-down and Closure Shut-down and closure 44 Where the Regulator or its authorized representative determines that a licensee, approval holder, contractor or operator of a well or facility has contravened or failed to comply with this Act, the regulations or rules or an order of the Regulator, or that a method or practice employed at a well or facility or any equipment or installation at a well or facility is improper, hazardous, inadequate or defective, (

a) the Regulator or its authorized representative may order the well or facility to be shut down or closed, or

RSA 2000

Section 47

Chapter O-6 OIL AND GAS CONSERVATION ACT 42 (

b) the Regulator or its authorized representative may require that approved methods be adopted and that remedial measures be taken before any operation proceeds at the well or facility. (

c) repealed 2026 c12 s12. RSA 2000 cO-6 s44;2012 cR-17.3 s97(31),(33);2026 c12 s12 45 and 46 Repealed 2026 c12 s12. Prohibition 47 Except as otherwise authorized by the Regulator, when any well or facility is shut down or closed under

section 44, no person may (

a) enter on, or carry on any operations at, or (

b) remove any equipment, installation or material situated on, the well or facility site until the order has been rescinded. RSA 2000 cO-6 s47;2012 cR-17.3 s97(31);2026 c12 s12

Part 9 Common Carriers, Purchasers and Processors Common Carrier Common carrier 48(1) On application the Regulator may from time to time declare each proprietor of a pipeline in any designated part of Alberta or the proprietor of any designated pipeline to be a common carrier as and from a date fixed by the order for that purpose, and on the making of the approved declaration the proprietor is a common carrier of oil, gas or synthetic crude oil or any 2 or all of them in accordance with the declaration.

(2) No proprietor of a pipeline who is a common carrier shall directly or indirectly make or cause to be made or suffer or allow to be made any discrimination of any kind as between any of the persons for whom any oil, gas or synthetic crude oil is gathered, transported, handled or delivered by means of the pipeline.

(3) No common carrier shall discriminate in favour of the common carrier’s own oil, gas or synthetic crude oil or oil, gas or synthetic crude oil in which the common carrier is directly or indirectly interested either in whole or in part.

RSA 2000

Section 49

Chapter O-6 OIL AND GAS CONSERVATION ACT 43

(4) On application the Regulator, in order to give effect to a declaration under subsection (1), may direct (

a) the point at which the common carrier shall take delivery of any production to be gathered, transported, handled or delivered by means of the pipeline, or (

b) the proportion of production to be taken by the common carrier from each producer or owner offering production to be gathered, transported, handled or delivered by means of the pipeline. RSA 2000 cO-6 s48;2009 c20 s7;2012 cR-17.3 s97(31) Relief to common carrier 49 The Regulator, by order, may relieve any common carrier from the duty of carrying any oil, gas or synthetic crude oil of inferior or different quality or composition or from any other duties that in its opinion are unreasonable.

RSA 2000 cO-6 s49;2012 cR-17.3 s97(31) Common Purchaser Common purchaser of oil 50(1) On application the Regulator may declare any person who purchases, produces or otherwise acquires oil produced from any pool in Alberta to be a common purchaser of oil from the pool or pools designated by the Regulator and from which oil is being taken when that person is declared to be a common purchaser.

(2) Each common purchaser of oil shall purchase oil offered for sale to the common purchaser without discrimination in favour of one producer or owner as against another in the same pool.

(3) Each common purchaser of oil shall purchase without discrimination between the pools in Alberta designated in the declaration.

(4) No common purchaser of oil shall discriminate in favour of the common purchaser’s own production or production in which the common purchaser is directly or indirectly interested either in whole or in part. RSA 2000 cO-6 s50;2009 c20 s7;2012 cR-17.3 s97(31) Common purchaser of gas 51(1) On application the Regulator may declare any person who purchases, produces or otherwise acquires gas produced from a pool from which gas is being taken to be a common purchaser of gas from the pool.

RSA 2000

Section 52

Chapter O-6 OIL AND GAS CONSERVATION ACT 44

(2) Each common purchaser of gas shall purchase gas offered for sale to the common purchaser without discrimination in favour of one producer or owner as against another in the pool.

(3) No common purchaser of gas shall discriminate in favour of the common purchaser’s own production or production in which the common purchaser is directly or indirectly interested either in whole or in part.

(4) On application the Regulator, in order to give effect to a declaration under subsection (1), may direct (

a) the point at which the common purchaser shall take delivery of any gas offered for sale to it, or (

b) the proportion of the comm on purchaser’s acquisitions of gas from the pool that it shall purchase from each producer or owner offering gas for sale.

(5) A direction by the Regulator under subsection (4) does not operate to require a common purchaser (

a) to purchase a greater total am ount of gas from the pool than the common purchaser was obligated to purchase from the pool under the gas purchase contracts existing immediately before the making of the declaration under subsection (1), or (

b) to purchase gas from the pool at a greater rate than the rate at which the common purchaser was obligated to purchase gas from the pool under the gas purchase contracts existing immediately before the making of the declaration under subsection (1). RSA 2000 cO-6 s51;2009 c20 s7;2012 cR-17.3 s97(31) Relief to common purchaser 52 The Regulator, by order, may relieve any common purchaser from the duty of purchasing oil or gas of inferior or different quality or composition or from any other duties that in its opinion are unreasonable.

RSA 2000 cO-6 s52;2012 cR-17.3 s97(31) Common Processor Common processor 53(1) On application the Regulator may declare any person who is the owner or operator of a processing plant processing gas produced from a pool or pools in Alberta to be a common processor of gas from the pool or pools.

RSA 2000

Section 54

Chapter O-6 OIL AND GAS CONSERVATION ACT 45 (2) Subsection (1) does not apply to a person declared to be a common purchaser under

section 51 or when an operator has entered into a contract approved under

section 12 of the Gas Utilities Act.

(3) Each common processor shall process gas that may be made available for processing in the common processor’s plant without discrimination in favour of one producer or owner of gas as against another in the pool or pools.

(4) No common processor shall discriminate in favour of the common processor’s own gas or gas in which the common processor is directly or indirectly interested either in whole or in part.

(5) On application the Regulator, in order to give effect to a declaration under subsection (1), may direct (

a) the proportion of production to be processed by the common processor from each producer or owner in the pool or pools, or (

b) the total amount of gas to be processed by the common processor from the pool or pools subject to the common processor declaration. RSA 2000 cO-6 s53;2009 c20 s7;2012 cR-17.3 s97(31) Relief to common processor 54 The Regulator, by order, may relieve any common processor from the duty of processing any gas of inferior or different quality or composition or from any other duties that in its opinion are unreasonable.

RSA 2000 cO-6 s54;2012 cR-17.3 s97(31) Alberta Utilities Commission Powers of Alberta Utilities Commission 55(1) If the Regulator has declared the proprietor of a pipeline to be a common carrier and agreement cannot be reached between the proprietor and a person desiring to have the person’s oil or synthetic crude oil carried in the pipeline as to the tariff to be charged for the carriage, either party may, pursuant to the Public Utilities Act, apply to the Alberta Utilities Commission.

(2) If the Regulator has declared a purchaser or processor of gas to be a common purchaser or a common processor and agreement cannot be reached between the common purchaser and a person desiring to sell the person’s gas or have it processed, as the case may be, as to the price to be paid for the gas or the costs, charges or

RSA 2000

Section 56

Chapter O-6 OIL AND GAS CONSERVATION ACT 46 deductions for the processing of the gas, either party may, pursuant to the Gas Utilities Act, apply to the Alberta Utilities Commission.

(3) If the Regulator has declared the proprietor of a pipeline to be a common carrier and agreement cannot be reached between the proprietor and a person desiring to have the person’s gas carried in the pipeline as to the tariff to be charged for the carriage, either party may apply to the Alberta Utilities Commission to fix the tariff.

RSA 2000 cO-6 s55;2007 cA-37.2 s82(20);2012 cR-17.3 s97(31) Operation Effective date of order 56 The Regulator may, in a declaration or order under this Part, order that all or any part of the declaration or order be effective as of a date specified in the declaration or order, and a date so specified may be previous to the date the declaration or order is made but may not be previous to the date on which the application for the declaration or order was made to the Regulator. RSA 2000 cO-6 s56;2012 cR-17.3 s97(31)

Part 10 Borrowing, Guarantees and Advances 57 to 64 Repealed 2007 cA-37.2 s82(20). Power to borrow 65 The Regulator may borrow from time to time on the security of the administration fees for the time being uncollected any sums that are required for the defrayal of the current expenditures of the Regulator. RSA 2000 cO-6 s65;2012 cR-17.3 s97(31) Guarantee and advances 66 The Lieutenant Governor in Council may authorize and empower the President of Treasury Board and Minister of Finance to do either or both of the following: (

a) to guarantee on behalf of the Government the due payment of any money borrowed pursuant to

section 65, together with the interest on the money borrowed, on any terms and conditions that may be prescribed by the Lieutenant Governor in Council;

RSA 2000

Section 68

Chapter O-6 OIL AND GAS CONSERVATION ACT 47 (

b) to advance to the Regulator from time to time out of the General Revenue Fund any sums that are considered advisable, on any security, at a rate of interest and on terms and conditions that may be prescribed by the Lieutenant Governor in Council. RSA 2000 cO-6 s66;2006 c23 s60;2012 cR-17.3 s97(13) 67 Repealed 2007 cA-37.2 s82(20).

Part 11 Orphan Fund

Definitions 68 In this Part, (a) “abandonment”, as it relates to a pipeline, includes abandonment as defined in the Pipeline Act; (b) “abandonment costs”, as it re lates to a pipeline, includes abandonment costs as defined in the Pipeline Act; (b.1) “defaulting licen see” means a licensee of a large facility who has been deemed to be a defaulting licensee under

section 70(2)(b.1); (c) “defaulting working interest participant” means a working interest participant who has been deemed to be a defaulting working interest participant under

section 70(2)(b); (d) “facility” has the same meaning as it has in

section 1(1)(

w) except that it includes a pipeline as defined in the Pipeline Act and does not include the following: (i) - (iv) repealed 2009 c20 s7; (

v) a refinery as defined in the Pipeline Act; (vi) an oil transmission pi peline and associated storage, pumping and measurement facilities; (vii) a gas transmission pipelin e and associated compression and measurement facilities; (vii.1) a pipe used to convey water used in connection with a coal processing plant or other matter authorized under the Coal Conservation Act;

RSA 2000

Section 69

Chapter O-6 OIL AND GAS CONSERVATION ACT 48 (vii.2) a pipe used to convey water used in connection with a mine site or processing plant authorized under the Oil Sands Conservation Act; (vii.3) any facility used in connection with or associated with the disposal of captured carbon dioxide pursuant to an agreement under

Part 9 of the Mines and Minerals Act; (viii) any facility listed in the regulations or rules as specifically exempted from this Part; (ix) any pipeline listed in the regulations or rules as specifically exempted from this Part; (e) “facility site” does not include any part of a facility site that has been designated as a contaminated site under

section 125 of the Environmental Protection and Enhancement Act; (f) “suspension”, as it relates to a pipeline, includes discontinuation as defined in the Pipeline Act; (g) “suspension costs”, as it relates to a pipeline, includes discontinuation costs as defined in the Pipeline Act; (g.1) “well” has the same meaning as it has in

section 1(1)(eee) except that it does not include a well completed or being drilled for injection of captured carbon dioxide into an underground formation in accordance with an agreement under

Part 9 of the Mines and Minerals Act or any well listed in the regulations or rules as specifically exempted from this Part; (h) “well site” does not include any part of a well site that has been designated as a contaminated site under

section 125 of the Environmental Protection and Enhancement Act. RSA 2000 cO-6 s68;2009 c20 s7;2010 c14 s3; 2012 cR-17.3 s97(33) Fund continued 69(1) The abandonment fund is hereby continued as the orphan fund.

(2) The orphan fund is to be retained and administered by the Regulator in accordance with this Part. RSA 2000 cO-6 s69;2012 cR-17.3 s97(31) Use of fund 70(1) The orphan fund may be used

RSA 2000

Section 70

Chapter O-6 OIL AND GAS CONSERVATION ACT 49 (

a) for the purpose of paying the costs of providing reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site, and paying for the costs of providing reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, remediation costs and reclamation costs in respect of orphan wells, facilities, well sites and facility sites, where the work is carried out (

i) by the Regulator, or (ii) by a person ordered, directed or authorized by the Regulator; (

b) for the purpose of repaying the principal and paying interest and any other borrowing costs under a loan agreement entered into by a delegated authority established or designated under this Part for the purposes of providing reasonable care and measures to prevent impairment or damage in respect of wells, facilities, well sites and facility sites, and for the purposes of suspension, abandonment, remediation and reclamation in respect of orphan wells, facilities, well sites and facility sites; (

c) for the purpose of monitoring the behaviour and condition of orphan wells, facilities, well sites and facility sites; (

d) for the purpose of paying for costs incurred in pursuing reimbursement for the costs referred to in clause (

a) or (

c) from the person responsible for paying them; (

e) for the purpose of paying for costs incurred in providing reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site and the costs of a delegated authority ordered to do so under

section 26.2; (

f) for the purpose of making payments associated with taking over the management and control of wells or facilities in accordance with the regulations; (

g) except in respect of a large facility, for the purpose of paying for a defaulting working interest participant’s share of the costs of providing reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, remediation costs and reclamation costs incurred by a working interest participant if the person who carried out the work has taken all reasonable steps necessary to collect that share and has been unable to do so;

RSA 2000

Section 70

Chapter O-6 OIL AND GAS CONSERVATION ACT 50 (

h) in respect of a large facility, for the purpose of paying for a defaulting licensee’s share of the costs of providing reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, remediation costs and reclamation costs incurred by a working interest participant or a person referred to in clause (

a) and a defaulting licensee’s proportionate share of any subsequently defaulting working interest participant’s share of the costs of providing reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, remediation costs and reclamation costs; (

i) for the purpose of paying for any other costs directly related to the operations of the Regulator in respect of the orphan fund; (

j) for the purpose of paying the costs of administering the orphan fund, including for (

i) hiring and retaining staff, experts and professionals that, in the opinion of the Regulator, are necessary for the purposes of conducting, analysing and responding to monitoring under this Part, or (ii) hiring and retaining staff and experts that, in the opinion of the Regulator, are necessary for the prudent management of accounting, investment and risk management activities in respect of the orphan fund; (

k) for the purpose of paying the costs of a receiver, receiver- manager, trustee or liquidator appointed on an application under

section 106.1; (

l) for any other purpose prescribed by the regulations.

(2) The Regulator may (

a) designate wells, facilities, well sites and facility sites to be orphan wells, facilities, well sites or facility sites for the purposes of this Part; (

b) deem to be a defaulting working interest participant a working interest participant who (

i) has an obligation under this Act to contribute toward the costs of providing reasonable care and measures to prevent impairment or damage, suspension costs,

RSA 2000

Section 71

Chapter O-6 OIL AND GAS CONSERVATION ACT 51 abandonment costs, remediation costs and reclamation costs, (ii) has not contributed to those costs as required by this Act, and (iii) in the opinion of the Regulator, does not exist, cannot be located or does not have the financial means to contribute to those costs as required by this Act; (b.1) deem to be a defaulting licensee a licensee of a large facility who (

i) has an obligation under this Act to contribute toward suspension costs, abandonment costs, remediation costs or reclamation costs, (ii) has not contributed to those costs as required by this Act, and (iii) in the opinion of the Regulator, does not exist, cannot be located or does not have the financial means to contribute to those costs as required by this Act; (

c) authorize money to be paid from the orphan fund for any of the purposes referred to in subsection (1) in accordance with the regulations or rules. RSA 2000 cO-6 s70;2009 c20 s7;2012 cR-17.3 s97(31),(33); 2017 c14 s2;2020 c4 s1(13) Effect of payment from fund 71(1) Where the Regulator makes a payment from the orphan fund to a person in respect of a defaulting working interest participant’s share of suspension, abandonment, remediation costs or reclamation costs, (

a) the defaulting working interest participant is not released from any liability under this Act in respect of those costs, and (

b) if the person who receives th e payment later recovers all or part of the costs from the working interest participant, the person shall forthwith pay to the Regulator an amount equal to the amount recovered, less the reasonable costs of recovery as determined by the Regulator.

(2) Where the Regulator makes a payment from the orphan fund to a person in respect of a defaulting licensee’s share of suspension, abandonment, remediation costs or reclamation costs,

RSA 2000

Section 72

Chapter O-6 OIL AND GAS CONSERVATION ACT 52 (

a) the defaulting licensee is not released from any liability under this Act in respect of those costs, and (

b) if the person who receives th e payment later recovers all or a part of the costs from the defaulting licensee, the person shall forthwith pay to the Regulator an amount equal to the amount recovered, less the reasonable costs of recovery, as determined by the Regulator.

RSA 2000 cO-6 s71;2009 c20 s7;2012 cR-17.3 s97(31); 2020 c4 s1(14) Ordinary remedies available 72 A debt to the Regulator to the account of the orphan fund shall, for the purpose of enforcement of payment of the debt, be treated the same as any other debt to the Regulator, and all the same remedies under this Act are available to the Regulator for that purpose. RSA 2000 cO-6 s72;2012 cR-17.3 s97(31);2021 c13 s9 Orphan fund levy 73(1) The Regulator may, in respect of each fiscal year of the Regulator, by rules prescribe (

a) classes of wells, facilities (other than pipelines) and unreclaimed sites and the rates of the orphan fund levy applicable to each class, (

b) the date as of which the licensees of the wells, facilities and unreclaimed sites are to be determined, and (

c) the date by which the levy prescribed under clause (

a) and penalties payable under

section 74(2) must be paid to the Regulator to the account of the orphan fund.

(2) In prescribing the orphan fund levy for a fiscal year, the Regulator shall provide for a total levy that will be sufficient to cover (

a) the costs referred to in sec tion 70(1) for the fiscal year, as estimated by the Regulator, (

b) any deficiency arising out of the operations of the fund from the previous fiscal year, and (

c) any surplus for emergency and non-budgeted expenditures that the Regulator considers is necessary.

(3) Orphan fund levies in respect of large facilities shall be held and accounted for separately in the orphan fund and used only to pay for a purpose referred to in

section 70(1)(h).

RSA 2000

Section 74

Chapter O-6 OIL AND GAS CONSERVATION ACT 53

(4) The Regulator may authorize money to be paid in respect of a purpose referred to in

section 70(1)(

h) only from the orphan fund levies collected in respect of large facilities. RSA 2000 cO-6 s73;2009 c20 s7;2012 cR-17.3 s97(14); 2020 c4 s1(15) Payment of levy 74(1) An orphan fund levy prescribed with respect to a well, facility or unreclaimed site in a fiscal year is payable to the Regulator by the person who was the licensee of the well, facility or unreclaimed site on the date referred to in

section 73(1)(b).

(1.1) Where the Regulator has prescribed an orphan fund levy in respect of a large facility, each working interest participant in the large facility is responsible for paying its share of the levy to the licensee in proportion to its share in the facility.

(2) Unless the Regulator directs otherwise, a licensee that fails to pay the orphan fund levy by the date referred to in

section 73(1)(

c) must pay to the Regulator a penalty in an amount equal to 20% of the levy. RSA 2000 cO-6 s74;2009 c20 s7;2012 cR-17.3 s97(31) Notice of levy 75(1) After it has made rules under

section 73(1), the Regulator shall give a notice in accordance with subsection (2) to each person who was, according to the records of the Regulator, the licensee of a well, facility or unreclaimed site of a prescribed class on the date referred to in

section 73(1)(b).

(2) The notice shall (

a) set out, in respect of each class of wells, facilities and unreclaimed sites, a brief description of the wells, facilities and unreclaimed sites of which the person to whom the notice is given was the licensee on the date referred to in

section 73(1)(

b) according to the records of the Regulator, (

b) set out the amount of the orphan fund levy in respect of each well, facility and unreclaimed site described in the notice, and (

c) contain a demand for the payment of the total amount of the orphan fund levy and specify the date by which the levy must be paid. RSA 2000 cO-6 s75;2012 cR-17.3 s97(15)

RSA 2000

Section 76

Chapter O-6 OIL AND GAS CONSERVATION ACT 54 Appeal of levy 76(1) A person to whom a notice is given under

section 75(1) may appeal to the Regulator on any one or more of the following grounds: (

a) that the person was not the licensee of a well, facility or unreclaimed site described in the notice on the date referred to in

section 73(1)(b); (

b) that the orphan fund levy set out in the notice for one or more of the wells, facilities or unreclaimed sites is incorrect; (

c) any other ground provided for in the rules.

(2) The Regulator shall hear and determine appeals under this

section in accordance with the rules. RSA 2000 cO-6 s76;2012 cR-17.3 s97(16) Special orphan fund levy 76.1(1) The Regulator may, in respect of each fiscal year of the Regulator, by rules prescribe (

a) a special orphan fund levy against non-producer licensees in respect of oilfield waste management facilities, (

b) the date as of which the non-producer licensees of oilfield waste management facilities are to be determined, and (

c) the date by which the levy prescribed under clause (

a) and penalties payable pursuant to the rules must be paid to the Regulator to the account of the orphan fund.

(2) In prescribing a special orphan fund levy for a fiscal year, the Regulator shall provide for a levy that will be sufficient to cover the costs referred to in

section 70(1) in respect of orphan oilfield waste management facilities.

(3) The Regulator may prescribe a special orphan fund levy under subsection (1) only for the first 5 fiscal years of the Regulator that commence immediately after the coming into force of this section.

(4) The total amount levied under subsection (1) may not exceed $2 000 000.

(5) Nothing in this

section prohibits the Regulator from also prescribing a levy against non-producer licensees under

section 73.

(6) The Regulator may make rules

RSA 2000

Section 76.2

Chapter O-6 OIL AND GAS CONSERVATION ACT 55 (

a) defining “non-producer licensee” for the purposes of this section; (

b) respecting the payment of a special orphan fund levy; (

c) prescribing penalties for failure to pay a special orphan fund levy; (

d) requiring the Regulator to give notice of a special orphan fund levy to non-producer licensees, and respecting the form and contents of the notice; (

e) respecting appeals with respect to the imposition of a special orphan fund levy. 2009 c20 s7;2012 cR-17.3 s97(17) Borrowing and advances 76.2 The President of Treasury Board, Minister of Finance may, on behalf of the Crown, make loans to a delegated authority established or designated by regulations made under this Part. 2017 c14 s3 Regulations 77(1) The Lieutenant Governor in Council may make regulations (

a) respecting the establishment or designation of delegated authorities; (

b) delegating to one or more delegated authorities any of the Regulator’s powers, duties or functions under this Act or the regulations or rules in respect of providing reasonable care and measures to prevent impairment or damage in respect of wells, facilities, well sites and facility sites, suspension, abandonment, remediation and reclamation of orphan wells, facilities, well sites and facility sites or related to or incidental to the orphan fund, other than the power to make regulations or rules and the power to delegate; (

c) authorizing a delegated authority to make bylaws and respecting the subject-matters on which the bylaws may be made; (

d) authorizing the Regulator or a delegated authority to disclose (

i) information acquired in the course of or as a result of the operations of the delegated authority, (ii) information respecting th e operations of the delegated authority, and

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Section 77

Chapter O-6 OIL AND GAS CONSERVATION ACT 56 (iii) information respecting th e officers or employees of the delegated authority; (e), (

f) repealed 2020 c4 s1(16); (

g) respecting, in regard to the delegation of authority, with necessary modifications, any matter in respect of which the Lieutenant Governor in Council may make regulations under

section 2 of

Schedule 10 to the Government Organization Act in regard to a delegation under that Schedule; (

h) making applicable, in regard to the delegation of authority, any of the other provisions of

Schedule 10 to the Government Organization Act, with necessary modifications; (

i) respecting the payments as sociated with management and operation of wells or facilities.

(1.1) The Lieutenant Governor in Council may make regulations necessary to carry out the provisions of this Part according to their intent or to meet cases that arise and for which no provision is made by this Part, including regulations (

a) respecting the administration of the orphan fund; (

b) limiting, regulating and controlling the exercise of the Regulator’s discretion with respect to the orphan fund; (

c) respecting the purposes for which the orphan fund may be used; (

d) authorizing the Regulator to pay any or all of the money in the orphan fund from time to time to a delegated authority for the purpose of the delegated authority’s carrying out of the powers, duties and functions in respect of the orphan fund that are delegated to it or that it carries out under an order or directions of the Regulator; (

e) respecting all matters related to the making of payments referred to in clause (

d) to the delegated authority, including, without limitation, the power to enter into agreements in respect of the payments, the imposition of terms and conditions, the times at which and the manner in which payments are to be made and the repayment of unused or improperly used money; (

f) respecting the determination and allocation of costs under

section 30.

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Chapter O-6 OIL AND GAS CONSERVATION ACT 57

(2) Where money is paid to a delegated authority pursuant to regulations under subsection (1.1)(d), that money is to be considered to be part of the orphan fund for the purpose of the

interpretation of provisions in this Act and the regulations and rules, if any, as they relate to the delegated authority’s carrying out its powers, duties and functions in respect of the orphan fund.

(3) The Financial Administration Act does not apply to a delegated authority with respect to a power, duty or function delegated to it under this Act. RSA 2000 cO-6 s77;2012 cR-17.3 s97(18);2020 c4 s1(16)

Part 12 Unit Operation

Definitions 78 In this Part, (a) “owner”, when used in connection with a tract, includes the person who has the right or an interest in the right to drill for, produce and dispose of any oil or gas from the tract or who would have that right or interest in the absence of any contract, statute, regulation, rules or order governing the disposition of the production; (b) “tract” means an area with in a drilling spacing unit or a pool, as the case may be, within which an owner has the right or an interest in the right to drill for and produce oil or gas; (c) “unit” means that part of the pool or pools to which a unit operation applies that is within the unit area; (d) “unit area” means the area described in an agreement filed under

section 79 and being the area subject to the plan of unit operation; (e) “unit operation” means the operation in accordance with a scheme or plan for combining the interests of owners in a common source of supply of oil or gas in any field or pool or part of a field or pool so that (

i) the operation may be conducted as if there were only one operator and one tract, and (ii) the cost or expenses of the operation and the oil or gas produced by it are distributed among the owners or tracts according to a formula or a

schedule of participation;

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Section 79

Chapter O-6 OIL AND GAS CONSERVATION ACT 58 (f) “unit tract” means a part of a unit to which a share of the production of the unit is allocated by the terms of an agreement or order filed or made under this Part.

RSA 2000 cO-6 s78;2012 cR-17.3 s97(19) Agreement to Establish Unit Agreement to establish unit 79(1) The Regulator shall encourage efforts initiated by owners of oil and gas interests in any pool to consolidate, merge or otherwise combine their interests for the purpose of accomplishing the more efficient and more economical development and production of the oil and gas resources of the pool, irrespective of whether that purpose is accomplished by unit operation, co-operative development or joint participation.

(2) Two copies of the forms of each unit agreement and unit operating agreement shall be filed with the Regulator before or within one month after their effective date.

(3) When the forms of a unit agreement and unit operating agreement have been filed with the Regulator, the unit operator shall, (

a) immediately on the coming in to effect of the agreements or on the filing of the forms of the agreements, whichever is later, advise the Regulator as to what tracts have been qualified for inclusion in the unit area, and (

b) immediately on any change in the unit area coming into effect, advise the Regulator of each addition to or deletion from the unit area, and shall file, as soon as possible, with the Regulator, copies of any amendments to either of the agreements.

(4) When a pool or part of a pool is (

a) subject to a unit agreement and unit operating agreement filed with the Regulator, (

b) within a block, or (

c) within a holding, the Regulator, on application, may order that any provision of this Act or the regulations or rules regarding the development and production of the oil or gas resources be varied or suspended in the pool or the part of the pool for the duration of the unit operation, block or holding.

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Chapter O-6 OIL AND GAS CONSERVATION ACT 59

(5) If, by a unit agreement or unit operating agreement filed under subsection (2), the owners of oil and gas interests and the operators agree that a designated person shall be their agent with respect to their powers, duties, functions, obligations and responsibilities under this Act, the performance or non-performance of them by that designated person is, subject to

section 90, deemed conclusively to be the performance or non-performance by the owners or operators otherwise responsible for them under this Act.

(6) This

section does not apply to an agreement for the pooling of tracts within a drilling spacing unit. RSA 2000 cO-6 s79;2012 cR-17.3 s97(31),(33) Pooling Pooling 80(1) The owner of a tract within a drilling spacing unit may apply to the Regulator for an order that all tracts within the drilling spacing unit be operated as a unit to permit the drilling for or the production of oil or gas from the drilling spacing unit.

(2) The applicant shall state in the application (

a) the legal description of each tract within the drilling spacing unit and the ownership of that tract, (

b) the formation to which the applicant proposes to drill or from which the applicant proposes to produce, (

c) that an agreemen t to operate the tracts as a unit cannot be made on reasonable terms, (

d) particulars of the efforts made by the applicant to obtain agreement to the operation as a unit of all tracts within the drilling spacing unit, (

e) if there is a well on the drilling spacing unit, the name of the well and its producing formation or formations, and (

f) if there is not a well on the drilling spacing unit to the formation referred to in clause (b), that if an order is made by the Regulator the applicant is prepared to drill a well to a specified depth or that formation and, in the event that no production of oil or gas is obtained, the applicant will pay all costs incurred in the drilling and abandonment of the well.

(3) The Regulator may order that the tracts within the drilling spacing unit be operated as a unit with respect to the formation referred to in subsection (2)(b).

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Chapter O-6 OIL AND GAS CONSERVATION ACT 60

(4) An order made under subsection (3) shall provide for the following matters: (

a) for the drilling and operation of a well on the drilling spacing unit, or, if a well that is capable of, or that can be made to be capable of, production from the formation in respect of which the order is made has been drilled on the drilling spacing unit before the making of the order, for the future operation of that well; (

b) for the appointment of an operator to be responsible for the drilling, operation or abandonment of the well whether drilled before or after the order; (

c) for the allocation to each tract of its share of the production of oil or gas from the drilling spacing unit, which allocation shall be on an area basis unless it can be shown to the Regulator that that basis is inequitable; (

d) for the payment of the actual cost of the drilling of the well whether drilled before or after the making of the order, and for the payment of the actual costs of the operation and abandonment of the well, but the share of the cost of drilling, operating and abandonment of the well and penalty, if any, as provided for by subsection (5) and payable by any owner who fails to pay the owner’s share by the time specified in the order, shall be recoverable only out of that owner’s share of production from the drilling spacing unit; (

e) for the sale by the operator of any oil and gas allocated to a tract under clause (

c) when the owner of it does not take or dispose of that production and for the deductions to be made by the operator out of the proceeds of the sale.

(5) The Regulator in its order may specify that, in the event production of oil or gas is obtained and the owner of a tract fails to pay the owner’s share of the actual cost of drilling the well by the time specified in the order, then the amount payable by that owner shall include, in addition to that tract’s share of the actual cost of drilling, a penalty payable to the operator in an amount equal to not more than 2 times that tract’s share of the actual cost of drilling. (6) Subsection (5) does not apply to an owner of a tract who is missing and untraceable.

(7) When an order is made under subsection (3), (

a) the drilling for or the production of oil or gas from the designated formation in the drilling spacing unit and all

RSA 2000

Section 81

Chapter O-6 OIL AND GAS CONSERVATION ACT 61 operations incidental to the drilling or production pursuant to the order are for all purposes deemed to be carried on or conducted by the several owners respectively on their separately owned tracts in the drilling spacing unit, and (

b) that portion of the produc tion allocated to each tract, and only that portion, is deemed to have been produced from the tract. RSA 2000 cO-6 s80;2009 c20 s7;2012 cR-17.3 s97(31) Well on tract in drilling spacing unit 81(1) When a well capable of production has been drilled and is capped or shut in, the Regulator on application may order that the tracts within the drilling spacing unit be combined as a unit for future operations, and

section 80 applies with all necessary modifications.

(2) When a well that is capable of production, or that can be made capable of production, has been drilled and is capped or shut in and the well is subject to an order made under subsection (1), or

section 80(3), the well is deemed to be drilled and located on each tract within the drilling spacing unit, irrespective of when the future operations are conducted. RSA 2000 cO-6 s81;2012 cR-17.3 s97(31) Application to vary pooling order 82(1) Where an order has been made under

section 80 or 81, the Regulator (

a) shall consider an application made by owners of at least 25% of the working interests in the drilling spacing unit affected by the order, calculated on an area basis, and (

b) may, if it is satisfied that it is appropriate to do so, consider an application made by any owner to vary, amend or terminate the order.

(2) When the Regulator, at any time after making an order pursuant to

section 80 or 81, is of the opinion that (

a) the pooling of all tracts subject to the order is not necessary to make up the drilling spacing unit of a well named or referred to in the order, (

b) a well required by the order to be drilled is not drilled within 6 months of the date of the order, or (

c) a well drilled pursuant to the order obtains production of a kind other than that for which the order was made,

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Section 83

Chapter O-6 OIL AND GAS CONSERVATION ACT 62 the Regulator may hold a public hearing to consider in what manner the order should be varied, amended or terminated.

(3) On an application or hearing under subsection (1) or (2), the Regulator may terminate the order or may (

a) vary, amend or revise the order to supply any deficiency in it or to meet changing conditions, and (

b) alter or revoke any provision that it considers to be unfair or inequitable.

(4) Notwithstanding subsection (3), no order shall be varied, amended or revised and no provision shall be altered or revoked so that it results in a change in (

a) the allocation to each tract of its share of the production, or (

b) the basis for determining an owner’s share of the cost of drilling, operation or abandonment of the well, unless all owners of tracts within the drilling spacing unit agree to that alteration or revocation.

(5) Notwithstanding anything in this section, if an order pursuant to

section 80 requires a well to be drilled within a time specified in the order and the well is not then drilled, the Regulator may terminate the order without hearing or notice. RSA 2000 cO-6 s82;2009 c20 s7;2012 cR-17.3 s97(31) Drilling costs 83(1) For the purpose of

section 80 or 81, the actual cost of drilling a well shall include the cost of drilling the well to, and completing it in, the formation named in the order under

section 80 or 81.

(2) If, for the purpose of an order under

section 80 or 81, a dispute arises as to the actual cost of drilling a well, the actual cost shall be determined by the Regulator. RSA 2000 cO-6 s83;2012 cR-17.3 s97(31) Inclusion of drilling spacing unit in unit area 84(1) A drilling spacing unit that is subject to an order made under

section 80 or 81 may be included in a unit area as a single unit tract, in which event the order is after that inclusion deemed to be amended so t