negotiator - enhancing all facets of the land … effective date vs. closing date ... director,...
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The Magazine of the Canadian Association of Petroleum Landmen
March 2010
THE NEGOTIATOR
Effective Date vs. Closing DateWho bears the burden during
the Interim Period?
ERCB vs. AB CourtsDiffering Interpretations of a
Freehold Lease Habendum Clause
The Plight of the Income TrustConversion Considerations and Deadlines
EffECTivE DATE vs. CLosing DATE
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McMillan LLP | Lawyers | Avocats | Calgary | Toronto | Montréal | mcmillan.ca
power upYours is a leadership agenda. And so is ours. McMillan LLP
has combined with established energy boutique, Thackray Burgess,to deliver the legal expertise and guidance you need to advance your business. So you can take the lead.
C
M
Y
CM
MY
CY
CMY
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The Negotiator Ad.pdf 1 4/15/2009 10:24:27 AM
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Senior Editorial BoardDirector of Communications
Margaret Ariss [ph] 539-1107Advertising Editors
Clark Drader [ph] 537-1771Bradley Campbell [ph] 705-6572
Coordinating EditorTom Hunter [ph] 874-4819
Feature Content EditorMark Innes [ph] 818-7561
Regular Content EditorJared Frese [ph] 386-5471
Social Content EditorMark Horne [ph] 231-5266
Editorial CommitteeKellie D’Hondt [ph] 386-6429Lindsey Lovse [ph] 699-6008Cale Runions [ph] 827-1592Nick Stavropoulos [ph] 213-5147Tracy Stock [ph] 298-2470Erin Wise [ph] 532-3828Elizabeth Zyluk [ph] 808-2839
Design and ProductionRachel Hershfield, Folio Publication Design
PrintingMcAra Printing
SubmissionsFor information regarding submission of articles, please contact a member of our Senior Editorial Board.
DisclaimerAll articles printed under an author’s name represent the views of the author; publication neither implies approval of the opinions expressed, nor accuracy of the facts stated.
AdvertisingFor information, please contact Clark Drader (537-1771) or Bradley Campbell (705-6572). No endorsement or sponsor-ship by the Canadian Association of Petroleum Landmen is suggested or implied.
The contents of this publication may not be reproduced either in part or in full without the consent of the publisher.
2008–2009 CAPL Board of DirectorsPresident
Ken Gummo, P.Land [ph] 403-296-6044Vice-President
Dalton Dalik, P.Land [ph] 403-478-0528Director, Business Development
Frank Terner, P.Land [ph] 403-691-3056Director, Communications
Margaret Ariss [ph] 403-539-1107Director, Education
Jan McKnight [ph] 403-290-3406Director, Field Management
Jason Tweten, PSL [ph] 403-526-8590Director, Finance
James Condon, P.Land [ph] 403-215-8614Director, Member Services
Gloria Boogmans, P.Land [ph] 403-246-4173Director, Professionalism
Robyn Van den Bon, P.Land, PSL [ph] 403-503-5276Director, Public Relations
Robin Thorsen [ph] 403-203-4050Director, Technology
Sally Jackson [ph] 403-232-5570Secretary/Director, Social
John Covey [ph] 403-232-7323Past President
Robert Telford, P.Land [ph] 403-503-5265 Suite 350, 500 – 5 Avenue S.W. Calgary, Alberta T2P 3L5 [ph] 403-237-6635 [fax] 403-263-1620www.landman.ca
Meghan Cobb [email protected] Grieve [email protected] Irene Krickhan [email protected] Steers [email protected]
Also in this issue
12 2010 Kelowna Conference Update
16 Thirteenth Annual CAPL 9–Ball Pool Tournament
27 Olds College Land Agent/Land Administration
THE NEGOTIATORThe Magazine of the Canadian Association
of Petroleum Landmen THE NEGOTIATOR
Features March 2010
2 Effective Date vs. Closing Date: Legal and Tax Issues
John W. McClure and Nadia Talakshi
6 From a Well on the Lands at the End of the Primary Term
Paul Negenman
9 The Plight of the Income Trust Kathleen L. Keller-Hobson
In Every Issue14 Board Briefs
17 Message from the Executive – Technology
18 Message from the Executive – Business Development
19 Get Smart
23 Roster Updates
24 In Memoriam
28 CAPL Calendar of Events
28 March Meeting
28 April Meeting
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written BY
JOHN W. MCCLuRE
AND NADIA TALAkSHI1
GowlinG lafleur Henderson llP
Effective Date vs. Closing Date: Legal and Tax Issues
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written BY
JOHN W. MCCLuRE
AND NADIA TALAkSHI1
GowlinG lafleur Henderson llP
In A&D transactions, the time in between the effective date and
the closing date, referred to as the “interim period”, can be a period
of uncertainty from a tax perspective with respect to determining
who is responsible for declaring income from the property and to
whom liabilities should be allocated. This article will discuss the
requirements for an effective date to be respected for legal and
tax purposes, and certain legal and tax implications for the vendor
and purchaser during the interim period.
effective date vs. Closing dateA contract is formed the moment the parties have agreed to the
essential elements, such as object and price. If a formal writ-
ten agreement is subsequently drafted, parties are entitled to
have the contract made effective from the time it was formed.2
In typical A&D transactions, the effective date is the date which
the parties intend that the revenues from the properties, which
are the subject of the transaction, are to belong to the purchaser
and the purchaser is to also bear the burdens of the ownership of
such revenue and properties from such date. The closing date, on
the other hand, is the date on which the transaction closes (i.e.
final execution of the closing documentation conveying the prop-
erties which are the subject of the transaction).
transfer of Beneficial ownershipTypically, for income tax purposes, the key date for a transac-
tion will be the date on which the purchaser acquires beneficial
ownership of the property.3
The concept of beneficial
ownership refers to rights in the
property which are normally
associated with true owner-
ship, as distinct from registered
legal ownership. Black’s Law
Dictionary defines “beneficial
owner” as one who is recog-
nized as the owner because use
and title belongs to that person,
even though legal or registered title may belong to someone else.4
If on a particular date all the essential elements were agreed upon
and the purchaser became the true beneficial owner of the prop-
erty, then that date will be respected as the effective date of the
transaction for tax purposes.5
In an Interpretation Bulletin (“IT Bulletin”), the Canada
Revenue Agency (the “CRA”) stated that possession, use and risk
are the primary attributes of beneficial ownership. The CRA went
on to state that strong indicators of beneficial ownership include
(i) physical or constructive possession; (ii) entitlement to income
from the property; (iii) assumption of responsibility for insur-
ance coverage; and (iv) commencement of liability for interest on
purchaser’s debt that forms a part of the sale price.6
In the same IT Bulletin, the CRA provided the following expla-
nation as to the time of entitlement:
…the sale price of any property sold is brought into account
for income tax purposes when the vendor has an absolute
but not necessarily immediate right to be paid. As long as
a “condition precedent” remains unsatisfied, a vendor does
not have an absolute right to be paid. However, the fact that
an event subsequent to the completion of a sale restores the
ownership of the property involved to the vendor or adjusts
the sale price does not alter the fact that the vendor was
at a particular time entitled to the sale price and therefore
disposed of the property for tax purposes at that time.7
INTRODuCTION
it is Common for oil and Gas transaCtions to Be
arranGed so tHat tHe PurCHaser enjoYs tHe Benefits
of ownersHiP as and from an “effeCtive date”, tHat
is Before tHe date tHe transaCtion is ComPleted (tHe
“ClosinG date”).
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Generally speaking, if the purchase and sale agreement is
absolute and the indices of ownership of the property including
possession, use and risk pass to the purchaser on the effective
date, the CRA will accept that date as the disposition date to the
seller, and the acquisition date to the purchaser for tax purposes.8
It is, however, not typical in an A&D transaction for possession
or ownership to transfer on the effective date. Usually, physical
or constructive possession and assumption of responsibility for
insurance coverage (i.e. risk) transfer on the closing date while
entitlement to income from the property and the liability for inter-
est on the purchase price transfers at the effective date.9
In situations where the purchase and sale agreement contains
a “condition precedent” which must be met prior to beneficial
ownership being transferred, then the CRA’s position is that there
has been no disposition/acquisition until the condition precedent
has been satisfied. For example, if an A&D transaction is condi-
tional upon the purchaser being satisfied with the title of the
vendor to the properties, then the CRA will likely not recognize
the earlier effective date as being the date of the transaction.
In response to a question regarding allocation of income where a
condition precedent exists, the CRA stated that because the trans-
fer does not occur, for tax purposes, until the condition precedent
is satisfied, income arising prior to the transfer belongs to the
vendor. On the other hand, if the vendor is entitled to payment
for the property and beneficial ownership has been transferred to
the purchaser, then any income earned in the interim period will
be for the purchaser’s account.10
who bears the burden?In 1994, a hypothetical situation was put forth to the CRA in which
a purchase and sale agreement specified both an effective date
and a closing date. The beneficial ownership and assumption of
liabilities were passed to the purchaser on the effective date with
the exception of a few minor liabilities which were to be passed
on the closing date. There were no conditions precedent to be
satisfied except the usual due diligence and the completion of the
appropriate documentation.
The CRA’s response was that the transfer was not legally
effective until the closing date even though beneficial owner-
ship had been transferred, and therefore the vendor was legally
liable to report the income during the interim period. However,
in its response, the CRA did acknowledge instances where it had
accepted that the transfer occurred on the effective date because
(i) both parties to the transaction agreed that the effective date
should be used; and (ii) there were no significant tax benefits aris-
ing from the use of this date.11
By their nature, A&D transactions are conditional until clos-
ing.12 The CRA’s position with respect to A&D transactions remains
consistent with its position laid out above but it seems to allow
for exceptions in short-cycle transactions (where the effective
date and the closing date are within the same calendar month).
In addition to being a short-cycle transaction, if the amounts are
minor and there are no significant tax benefits to either party, the
CRA allows the effective date to be used as the transaction date
for tax purposes.13 This exception is made for A&D transactions
notwithstanding the fact that beneficial ownership of the assets
may not pass to the purchaser as of the effective date.14
There is a risk in relying on the CRA rulings and IT-Bulletins
as they are not binding. In situations where the CRA views the
interim period to be lengthy, the risk of the CRA challenging the
post-effective date allocation of income is increased. To minimize
the risk of a CRA challenge in these circumstances, the parties
… if commercially feasible in the transaction, the parties should keep the
time between the effective date and the closing date as close as possible
(preferably within the same calendar month).
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Rockford Land Ltd.➣ Alberta Crown Sales
➣ Freehold Mineral Acquisitions
➣ Surface Acquisitions
Scott Clapperton
Suite 119, 2526 Battleford Ave SW Calgary, Alberta T3E 7J4 287-3500
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should ensure that the written agreement clearly stipulates their
intentions with respect to ownership of the property and alloca-
tion of income and liabilities during the interim period, and if
commercially feasible in the transaction, the parties should keep
the time between the effective date and the closing date as close
as possible (preferably within the same calendar month). m
notes1. The authors would like to thank Patrick W. Burgess for his
contribution.
2. Marie-Pierre Allard, “Retroactive Effect of Conditional Obli-
gations in Tax Law,” (2001) vol. 49, no. 6 Canadian Tax Journal, 1751.
3. D. Blair Nixon and Sandra E. Jack, “The Deal: The Price Tag &
Adjustment Mechanisms” Report of Proceedings of Fifty-Second
Tax Conference, 2000 Tax Conference (Toronto: Canadian Tax
Foundation, 2001), at 11:6.
4. Black’s Law Dictionary, 8th ed., s.v. “beneficial owner”.
5. M.N.R., CRA Views 96161800, “Effective date and closing date” (9
May 1996).
6. M.N.R., Interpretation Bulletin IT-170R, “Sale of Property –
When Included in Income Computation” (25 August 1980) at
para. 8.
7. Ibid at para. 5.
8. Supra note 6.
9. However, we note the provisions of Clause 3.02 of the 2000 CAPL
Property Transfer Procedure, which states that the “transfer of
the Assets from the Transferor to the Transferee and the assump-
tion of the benefits, obligations and risks associated with the
Assets by the Transferee will be effective as of the Effective Date,
provided Closing occurs. As between the Parties, possession of
the Assets, however, will not pass to the Transferee until Closing.”
The annotations regarding this Clause state that “[t]he provision
was structured to link risk to the Effective Date because: (a) it
matched revenues with risk; (b) the Transferee has a high degree
of influence on operational decisions under Article 5.00; (c) the
Transferee is protected by the “No Substantial Damage” condi-
tion in Clause 10.02; and (d) it encourages the parties to select the
Effective Date on a current basis.” With respect to the authors of
those annotations, it is the experience of this firm that risk and
possession are linked, and both pass at Closing.
10. “Revenue Canada Round Table,” in Report of Proceedings of the Forty-
Third Tax Conference, 1991 conference Report (Toronto: Canadian
Tax Foundation, 1992) 50: 24-25.
11. M.N.R., CRA Views 9418865, “Effective date vs. closing date”
(22 December 1994).
12. Jim MacLean, “CAPL Property Transfer Procedure Update”
The Negotiator (May 2001) 16.
13. Ibid at 19.
14. Supra note 3 at 11:15.
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Be Careful wHat You wisH for. This
was the first thought that popped into my head
after reading the Alberta Court of Queen’s Bench,
Master’s decision in Desoto Resources Ltd. v. EnCana
Corp. (2009 CarswellAlta 818).
The case deals with EnCana’s lapse proceeding
against caveats filed by Desoto on EnCana’s fee
simple mineral title. Very common and straight
forward process. EnCana sends a Notice to Take
Proceeding on Caveat to Desoto. Desoto then filed
a statement of claim to defend its caveat (and
therefore the underlying lease).
The kicker comes from how the court inter-
preted the text of the habendum clause in the
lease. The clause reads as follows:
From a Well on the Lands at the End of the Primary Terma unique Court interpretation of a freehold lease Habendum Clause
written BY
PAuL NEGENMANenerlaw
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The Lessor, for the initial consideration paid by to the
Lessor by the Lessee … DOES HEREBY GRANT AND
LEASE … the leased substances … for the primary term
and so long thereafter as any of the leased substances is being
produced or is capable of production in paying quantities from
a well or wells on the said lands at the end of the primary
term, but subject to sooner termination as provided
in this lease; provided that if at the expiration of the
primary term each well drilled on the said lands by the
Lessee is abandoned and the Lessee is then drilling a
further well on the said lands for the leased substances,
this Lease shall remain in force so long as such drill-
ing is diligently and continuously prosecuted and so
long thereafter as any of the leased substances is being
produced or is capable of production in paying quantities
from the said lands from the well so drilled (paragraph
23. Emphasis mine)
This is not uncommon wording. Most of my time, and most prior
court decisions, deal with determining if wells on the lands are
“capable of production in paying quantities”. I must admit I had
not put very much thought into the bolded text that follows.
That bolded text qualifies the prior italicized wording and requires
that only production “from a well or wells on the said lands at the end
of the primary term” will continue the lease.
Think about those words again for a minute. I mean, really,
really think about them. This wording literally means that the only
wells that can continue the lease are those wells drilled during the
primary term. The only wiggle room comes from the proviso at
the end of the clause that allows for certain wells drilled over the
primary term to be included as continuation wells.
The court very succinctly summarizes this view by stating:
27 Whether or not the Lands are capable of produc-
tion in paying quantities, the plain terms of the Leases
require that the production be from a well or wells drilled
during the primary term. A well drilled in 2007 cannot
operate to satisfy this requirement.
the new well ProblemThe obvious problem for industry with this interpretation of the
lease is that is does not allow for lease continuation by wells
drilled after the primary term. This is a deal stopper if you are
considering drilling new wells on this form of lease and then
abandoning the old wells. Think infill drilling. Think new fangled
horizontal wells on old leases.
Under a traditional “capable of production in paying quan-
tities” test, you are ok so long as you continue to produce the
old well until the new well is on production. Simple strategy.
Simple risk management process.
However, under this new interpretation, your new well will
never be able to continue the lease. You lease simply cannot be
continued by production from wells drilled after the primary term.
Never ever.
Holy crap. This is what I mean by being careful what you wish
for. I never really thought a court would interpret this text literally.
I am constantly blathering on about how important it is for courts
to stop trying to interpret the intention of the parties to leases
and to avoid results based reasoning. Just read the darn words
I bellow. We will all be much better off it we just read the words
and leave it at that. Certainty is the holy grail of lease interpretation.
Fairness just screws everything up.
Well don’t I look foolish. I can’t argue with the court’s strict
interpretation of the words in the lease. Once you really read the
words, it is what they say. The only way to challenge this interpre-
tation is to start yelping about how this could not possibly be what
the parties intended, or that the result is to harsh or unjust. This is
hippy socialist speak that I cannot bring myself to utter.
summary judgmentJust a note that this case was an application by EnCana for
summary judgment against Desoto. Summary judgment is a
somewhat unusual remedy that allows the court to make a final
decision in a matter without having a full trial. Summary judg-
ment will only be granted where the court decides that “… there is
no genuine issue of material fact requiring trial.” (paragraph 20).
The obvious problem for industry with this interpretation of the lease
is that is does not allow for lease continuation by wells drilled after the
primary term. This is a deal stopper if you are considering drilling new
wells on this form of lease and then abandoning the old wells. Think
infill drilling. Think new fangled horizontal wells on old leases.
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E L E X C OG R O U P
Elexco Ltd.Tel: 1-800-265-1160Local: (519) 686-0470Fax: (519) 686-9088557 Southdale Road EastSuite 101London, OntarioCanada N6E 1A2Jack Norman, PresidentDale Norman, Land Manager
Elexco Land Services, Inc.
Tel: (716) 372-0788Fax: (716) 372-0515PO Box 383505 W. Henley StreetOlean, New YorkUSA 14760Randall Hansen, CPL, PresidentJack Norman, Vice President
Elexco Land Services, Inc.
Tel: (810) 364-7940Fax: (810) 364-8120PO Box 313106 Huron Blvd., Suite AMarysville, MichiganUSA 48040Randall Hansen, CPL, PresidentPaul Boyce, Land Manager
Mineral and Surface LeasingRight-of-Way Acquisitions
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For our purposes, a summary judgment application is material
in that the decision is made by a “Master”, which is a special class
of judge that is just below a Queen’s Bench justice. The decision
therefore may have slightly less precedent value than a decision
by a full Court of Queen’s Bench Justice.
Caution appeal by trial de novoAlso important is that this decision is currently under appeal.
The latest ruling I could locate was a September 9, 2009 prelimi-
nary ruling on some procedural matters (see Desoto Resources Ltd.
v. EnCana Corp., 2009 CarswellAlta 1376). This ruling is interest-
ing in that it confirms that the appeal to a Justice of the Court of
Queen’s Bench will be a de novo hearing. This is just fancy Latin
meaning lets start all over again. For us this means that the next
court may not agree with the Master’s decision above and is not
really bound by the Master’s reasoning.
Continuing the desoto erCB sagaOh yeah, you may remember Desoto from my May 2009 article
“Is the Board Bored?” which dealt with the ERCB decision regard-
ing the validity of this exact same cursed freehold lease in the
context of the ERCB’s jurisdiction to grant and revoke well licences
in Alberta. How can this be you say? The ERCB already found that
the lease was dead and terminated the well licence, what more
could a court decide?
Well, as I ranted on ad nauseam in my prior article, an ERCB
decision on the well licence issue cannot bind a court when it
deals with a separate action dealing with the lease. The court in
the current case makes note of the ERCB decision, but then starts
over again, as it should. Nuff said. No use beating a dead horse.
Ok, maybe just a few whacks. The court totally starts over and
comes to a completely different rational as to why lease is dead.
Totally different. Totally. The ERCB goes on and on about what it
really means for a well to be capable of production. Never looks at
when the well was drilled. The current court decision deals strictly
with when the well was drilled and does not even consider the
capable of production issues. Arrrgghh.
As a poor oil and gas solicitor I am now left with two sets of
reasoning on the same lease wording depending in which forum
the lease is challenged in. One set of reasoning applies to the ERCB.
A different set to the courts. Plus the court decision is currently
under appeal by a trial de novo. I am not complaining (much), but
this makes my job quite difficult. All I ask is that my clients try to
remember just how screwed up this single clause in one form of
lease has gotten the next time you call with a “real simple lease
question”. I should have been an engineer. m
The court totally starts over and comes to a completely different rational
as to why lease is dead. Totally different. Totally. The ERCB goes on and
on about what it really means for a well to be capable of production.
Never looks at the when the well was drilled. The current court decision
deals strictly with when the well was drilled and does not even consider
the capable of production issues.
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Since 1999, in the regulatory consultation and land business, our team’s contributions have been integral in helping our clients get...
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negotiator ad feb cmyk 2/3/10 12:29 PM Page 1
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The Plight of the Income TrustConversion Considerations and deadlines
muCH Has Been written aBout tHe PliGHt of tHe Canadian inCome trust. At the height of the income
trust boom in 2006, there were more than 250 publicly-traded
income trusts in Canada with a total market capitalization of in
excess of $200 billion. As at December 31, 2009, approximately
160 income trusts were left with a total market capitalization of
approximately $130 billion. Of these, 18 were energy trusts and
alone accounted for just over $55 billion of the total market capi-
talization of all income trusts.
Adverse tax changes, market meltdown and economic reces-
sion have all contributed to the precarious situation in which
many income trusts have found themselves and all income trusts
face difficult decisions as to the future, including whether or not
to convert to a corporation.
Though management and trustees of income trusts will, by now,
have considered conversion and other alternatives, many deferred
making a final decision until closer to the end of 2010 in the face
of poor economic and market conditions. Now, as the December 31,
2010 deadline for the end of the tax holiday on income distributions
draws close, the pace of conversions will significantly pick up.
BackgroundIncome trust structures typically involve the operating business
being held in a limited partnership or corporation, with the trust
owning the equity in the operating entity either directly, or indi-
rectly, through one or more flow-through entities.
The tax changes announced in October 2006, which will
prevent income trusts (other than certain qualifying real estate
investments trusts) from continuing to deduct income distri-
butions for tax purposes, will become effective on January 1,
2011. Since the introduction of tax legislation in July 2008 (since
enacted in March 2009) to facilitate tax-deferred conversions,
approximately 30 income trusts have converted to corporations.
This includes a number of energy trusts which converted to corpo-
rations, such as Bonterra Income Trust (November 2008), Crescent
Point Energy Trust (July 2009), Advantage Energy Income Fund
(July 2009) and True Energy Trust (November 2009).
Some income trusts converted prior to the introduction of the
tax legislation facilitating conversions, and many more were the
targets in acquisitions when the mergers and acquisitions market
was active and market prices for trust units were depressed as a
result of the Government’s announced tax changes.
The objective of the conversion is to substitute shares in a
listed corporation for outstanding units of the income trust on
a tax deferred basis and, typically, to also collapse the former
income trust structure to simplify operations from a commercial
and tax point of view.
deadline for Conversion decisionPublicly-traded income trusts in existence on October 31, 2006
can continue to enjoy the tax-free holiday on income distributed
to unitholders until the end of 2010 provided that the “normal
growth” guidelines are not exceeded. After that time, the effec-
tive rate of tax for these trusts will approximate that applicable
to corporations and income will, effectively, be distributed to
unitholders as dividends.
The tax conversion rules permit these trusts to convert to
corporations on a tax-deferred basis at any time up to the end
of 2012 and, depending upon the conversion method selected, to
transfer the tax attributes of the income trust to the new corpo-
ration. Depending upon a trust’s particular tax situation, it may
defer a conversion decision until the end of 2012 if the impact
of the tax change during the preceding two-year period is not
expected to be material.
alternatives availableThere are many considerations to be taken into account in deter-
mining whether to convert ahead of the December 31, 2010 deadline,
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Call us at 403.209.6300 or 1.888.289.9272
* 15% discount applies only to Novex base premiums.
As a CAPL member, you can save up to 15% on your insurance rates today.*
100, 4124 9th Street SE, Calgary AB
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the most important question being whether the non-tax benefits of
immediate conversion outweigh the benefit to the income trust of the
rapidly diminishing tax holiday until December 31, 2010. However,
depending upon the income trust’s business strategy, financial and
market outlook and other considerations, there may be other more
attractive alternatives to conversion, such as putting the income
trust up for sale, merging with another income trust, being taken
private by a significant unitholder or a management-led buy-out,
converting to a U.S. master limited partnership if there are significant
U.S. unitholders or assets, or “staying the course” and restructuring
to achieve tax efficiency prior to 2011.
Deciding whether to convert from an income trust to a corpo-
ration, and the most appropriate timing for doing so, is complex.
Management and trustees of an income trust must consider a
number of factors, particularly strategic, tax, financial, market and
legal considerations. In doing so, the trustees must keep the best
interests of the trust (including consideration of the interests of
unitholders and other stakeholders) top of mind.
Convert nowKey reasons for implementing a conversion now rather than wait-
ing until closer to the end of 2010 include:
If the income trust wants to grow through acquisitions: • the income
trust’s tax holiday on income distributions will immediately
terminate if the trust exceeds the “normal growth” guidelines;
as well, if the trust wants to fund acquisitions through the issue
of its own securities, shares of a corporation may be more highly
valued than trust units as financial performance of shares may
be more easily valued relative to corporate industry peers and
selling shareholders of the acquired entity could receive tax-
deferred rollover treatment if paid in shares.
If the income trust wants to grow organically:• the “normal
growth” guidelines restrict capital-raising efforts, which could
be problematic for capital intensive industries.
If the income trust will reduce or suspend distributions: •
if distributions have been or will be reduced or suspended
because of liquidity problems or because the trust plans to
reinvest income in acquisitions or other expenditures, the loss
of the tax holiday may not be a concern. Reducing or suspend-
ing distributions often significantly impacts the market price
of an income trust’s units since its investors are typically yield-
focused; however, the certainty of conversion may be attractive
to new financers or investors.
If the income trust has an increasing number of foreign investors •
or needs access to foreign capital: the trust (other than certain
trusts in the energy sector) will not be able to maintain its
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CALGARY EDMONTON LLOYDMINSTER FORT ST. JOHN BONNYVILLE REGINA GRANDE PRAIRIE MEDICINE HAT
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Other services include: Environmental and Vegetation Management
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advantageous tax status as a “mutual fund trust” if it is consid-
ered to be established or maintained primarily for the benefit
of non-residents. Most trusts have provisions in their governing
documents restricting non-residents from owning 50 percent or
more of the outstanding units.
• If conversion will have a tax neutral effect until end of 2010:
if the income trust has other bases on which to reduce
its taxable income (such as tax depreciation, tax pools, tax
losses, resource expenses and undeducted financing expenses),
then early termination of the trust’s tax holiday may not be
adverse. The income trust may be able to return capital rather
than distribute income, such as through the use of resource
expenses, thereby avoiding the tax on distributions.
wait and seeReasons an income trust may defer conversion until closer to the
end of 2010, apart from losing the tax holiday, include:
If the income trust does not want to be a take-over target: •
the potential for churn in an income trust’s units on announce-
ment of conversion, and the resulting market price drop, will
make the trust a more attractive take-over target.
If sale of the income trust or merger is a more desirable alter-•
native: deferring a conversion decision until the end of 2010
(or even until 2012) may see the benefit of increased M&A activ-
ity; a merger transaction with another trust will not normally be
considered growth terminating the tax holiday.
However, given the lead time required to implement a conversion,
which typically also requires a unitholder meeting to be held to
approve of the transaction, a decision to proceed with a conver-
sion should be made by mid-2010.
stay the CourseIf there are no significant benefits to conversion, an income trust
might stay the course and not convert, but structure its affairs to
remain as tax efficient as possible. However, in making such deci-
sion the trust must consider:
The end of the transitional tax conversion rules on December 31, •
2012: not converting to a corporation by the end of 2012 may
significantly impair the ability of the income trust to structure
a future conversion on a tax neutral basis and will result in
forfeiting the ability to transfer certain tax attributes to the
new corporation.
Complexity and cost:• the cost of restructuring to improve tax
efficiency, as well as the administrative cost and burden of
maintaining the income trust structure.
the road aheadExpect the number of publicly-traded income trusts to fall at an
increasingly faster rate as 2011 approaches. Much of this will be
the result of conversions to corporations. Energy trusts which
have announced their intention to convert include Arc Energy
Trust, Daylight Resources Energy Trust and Vermillion Energy
Trust. However, as the warming trend in the mergers and acquisi-
tions market continues, together with gradual improvement in
credit markets, expect also to see acquisitions of income trusts
increase. There is no doubt that the income trust is becoming an
endangered species in Canada. m
Kathleen L. Keller-Hobson, Partner, Bennett Jones LLP
© Bennett Jones LLP/All Rights Reserved
Kathleen Keller-Hobson is a partner in the Toronto
office of Bennett Jones LLP who practices in the
mergers and acquisitions and corporate finance areas.
The author acknowledges the assistance of Russel
Drew, an associate in the Toronto office of Bennett
Jones LLP, in the preparation of this article.
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dear CaPl members:in tHis, mY tHird artiCle aBout tHe 2010 CaPl ConferenCe, I continue the release of significant tidbits
of information as they are developed by
my committee Chairmen and their hard-
working volunteers.
ProgramThe Program committee will beef up
the educational offerings at this year’s
Conference. We will continue the practice
of offering seminars on Sunday morn-
ing and afternoon prior to the Opening
Reception on Sunday night. These have
been very popular and well attended
over the past few years. This year we are
also going to offer seminars on Tuesday.
We understand that some of our dele-
gates may have had trouble in the past
getting activities funded and in addi-
tion, some of our members may be in
need of educational credit for profes-
sional re-certification purposes. We will then be trying to look
after some of these concerns by offering seminars on Tuesday.
This beefed up program may also help
senior management in some compa-
nies approve Conference funding for
members in their land departments
who want to go to Kelowna.
Last month we reported that econo-
mist and author, Jeff Rubin will be
a keynote speaker at our Conference.
This month I am excited to report
to you that Dave Horn’s group has
signed up Brian McKeever as a motiva-
tional speaker. I am writing this article
in early February but when you read
this you will be very familiar with
this incredible man. He is a legally
blind Olympic and Para-Olympic skier.
Mr. McKeever’s story is a story of resil-
iency, and, of course, resiliency is our
Conference theme.
finance and marketingI am very pleased to report that a number
of companies that could not attend last
year’s Conference have committed to support the 2010 edition.
These companies have pledged delegate attendance and renewed
2010 Kelowna Conference Update
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sponsorship support. We are happy to have everyone back that could
not come last year and most pleased that some brand new individu-
als and companies will be with us for the first time in 2010.
We are ahead of the budget on a number of budget items and
can confirm that we even got some free stuff! Our beautiful logo
was designed and contributed by Ms. Claire Ouchi at no cost to
the CAPL. Mary Lou Ediger and Cathy Armstrong get kudos for that
achievement.
administrationI promised to provide you with the means to book your rooms at
the Delta Grand Okanagan and below is the URL that will take you
directly to CAPL’s registration page. http://www.deltagrandoka-
nagan.com/g912petr. This will also soon be available on the CAPL
website.
activitiesJeff Leitl and his group have been working closely with onsite and
offsite venues to put together something of interest to all of our
potential delegates. At this time I can confirm that our golf tourna-
ment will be held at the Harvest Golf Club in Kelowna. If you have
not played the course you can check it out at www.harvestgolf.com.
Greg Meidinger was in charge of negotiations on the golf package
and he did a wonderful job of ensuring us a great golf experience
at a fantastic value.
Thanks to all of the volunteers that have already contributed
so much time to this endeavour. Please stay tuned. m
Jim Moore
2010 Conference Chairman
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Board Briefsthe key issues discussed at the
CaPl Board of directors’ meeting
held february 2, 2010 at the
CaPl office were as follows:
In Attendance Absent Guest
G. Boogmans J. McKnight M. Ariss Denise Grieve
J. Condon R. Telford S. Jackson
J. Covey R. Thorsen F. Terner
D. Dalik J. Tweten
K. Gummo R. Van den Bon
Jim Condon presented a Treasurer’s Report as at January 31, •
2010 showing CAPL investments totalling $528,728.08 Canadian
and $38,009.80 U.S. along with a cash balance of $154,679.70
Canadian and $2,756.87 U.S. The CAPL Scholarship Fund has a
balance of $234,919.88. There were no transfers made since the
last report. There was $4,387.21 interest earned in 2009 in the
T.Bill Account and $255.85 interest earned in the Scholarship
Trust Fund Account. Jim Condon also advised that the Board
Briefs, which are included in The Negotiator each month, will
also be emailed to each Committee Chair to ensure that these
individuals are apprised in a timely fashion, and thus able to
communicate to their committees, regarding Board decisions
on financial and other relevant matters.
Gloria Boogmans presented one student, four active and three •
associate membership applications to the Board of Directors,
which were approved. In addition to the above, one member
was approved to change from an Active to Senior member.
Vince Boden was approved by the Board of Directors for •
the position of CAPL’s External Liaison for the Reclamation,
Remediation and Abandonment Task Team. As part of an
Alberta Government Cross Ministry Initiative, the Task Team
has been established to develop draft recommendations for
regulatory changes related to the timely remediation, abandon-
ment and reclamation of wellsites and related surface facilities.
This position is a two year term reporting directly to the CAPL
Field Acquisition and Management Chair.
Robin Thorsen, Director of Public Relations, provided the follow-•
ing information:
The Committee has evaluated alternate advertising oppor-•
tunities to the Alberta Beef insert used over the past several
years. In 2010 we will be using various publications to reach a
wider audience of readers and at a reduced cost.
The Committee is in the process of preparing the CAPL 2009 •
Annual Report and all Directors will be contacted for their
information.
Robyn Van den Bon, Director of Professionalism, provided the •
following update:
The following members recently wrote and passed the •
Professional examination:
Amy Gowertz, P.Land
Monte Hurt, PSL
The revised Professionalism Manual will be available in •
February. Current P.Land and PSL members will be contacted
to pick up their complimentary copy from the CAPL office.
Applicants for the P.Land and PSL designation whose appli-•
cations are received in the CAPL office by April 1, 2010
may choose to write either the new or old examination.
Individuals who submit their applications after that date will
be required to write the new examination, scheduled to be
ready in September, 2010.
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Jan McKnight, Director of Education, advised that the Committee •
is working with the Conference Committee on courses to be
offered at the 2010 Conference in Kelowna.
Rob Telford advised that the deadline for nominations for the •
2010/11 Elections is March 15, 2010 (30 days prior to the April
15, 2010 Annual General Meeting and Elections). To date, the
Nominating Committee has several candidates that have put
their name forward.
In Frank Terner’s absence, Dalton Dalik advised that a PNG •
Information Exchange will be held April 22, 2010 at the Telus
Convention Centre. The CAPL and CAPLA will co-host the
event and the CAPL will be handling all administrative duties.
Additional information will be available on our website and in
The Negotiator.
Gloria Boogmans, Director of Member Services, advised that •
as of February 1, there were approximately 400 members that
had not yet paid their annual 2010 membership dues (which
were due December 31, 2009). After discussion, it was agreed
that members that have not paid their dues will have no access
to the members’ section on the CAPL website and will also be
charged a collection fee of 15% (as per the CAPL By-Laws Article
11.3). Once the member has paid their membership and collec-
tion fee, access to the members’ section will be reinstated.
Ken Gummo advised that Olds College will be holding a recep-•
tion on Thursday, March 25, 2010 at the Fairmont Palliser
Hotel for students from the Land Agent/Land Administration
Programs. Ken encouraged all Directors to attend the event and
noted that he will be addressing the students at the reception.
The Board endorsed Chris Bartole as the 2011 Conference •
Chairman.
Ken Gummo reminded Directors of the following:•
The next Board of Directors’ Meeting will be held March 2, •
2010 at the CAPL office.
The next General Meeting is a luncheon on Wednesday, •
February 24, at The Westin Calgary. The guest speaker will
be Morris Seiferling, Stewardship Commissioner for the Land
Use Secretariat. m
John Covey
Secretary/Director, Social
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www.progressland.com
1.866.454.4717
celebrating 25 years 1984-2009
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Thirteenth Annual CAPL 9–Ball Pool TournamenttHe tHirteentH annual CaPl 9–Ball Pool tournament will be held at the Garage in Eau Claire Market on
Thursday, May 6th, 2010 beginning at 4:45 pm.
9–Ball is a game where luck plays a very big role, so come out and
test your luck with your fellow CAPL members. All levels of players
are welcome to participate and team pairings are designed to mini-
mize any requirement for talent. Non-playing spectators are also
welcomed and heckling is encouraged and completely acceptable.
The format will be assigned teams of two players and all are
guaranteed at least two best of three matches. We anticipate over
60 players and a variety of prizes for surviving teams as well as for
others through random draws. The entry fee is $40 (GST included)
and, given the historically high level of interest in this event, we
suggest you submit your entry as soon as possible.
The deadline for entries is April 29th, 2010 and forms are
included in The Negotiator. Sponsorships are welcome and incen-
tives are provided for sponsors. Details may be obtained from any
member of the Pool Committee. m
Harry Ediger 515-5554 [email protected]
R.K. Howard 999-2136 [email protected]
Hank Radomski 232-7315 [email protected]
Murray Wade 232-7021 [email protected]
Rob Weston 816-2966 [email protected]
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For further information or a product demo; please contact:
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Message From the Executive
CommuniCation, tHe exCHanGe of information, and teCHnoloGY sHould Go Hand in Hand. The modern world is
constantly striving for faster, more
efficient, more effective communica-
tion. Just look at how effective we’ve
become at keeping in touch: we have landlines, cell phones,
better yet BlackBerrys and iPhones, text messaging, instant
messaging, emails, faxes, Facebook, Twitter, and, oh yes, good
old in person, face to face conversation.
As quickly as we move forward with technology, the more
quickly it seems to evolve, what seems cutting edge today, is
outdated tomorrow. With so much new information and technol-
ogy available how do you determine what is relevant to the needs
of an organization such as the CAPL?
The CAPL membership is over 1700 strong and very diverse.
With that diversity come varying degrees of appreciation for
technology. For some, just turning the computer on and navigat-
ing the internet is trouble enough. For others, “Cloud Computing”
is on the next horizon. Keeping this broad spectrum in mind, the
Technology Committee is developing a number of initiatives that
will keep the CAPL membership informed and technologically
savvy, but won’t leave anyone behind. Some of these initiatives are
already in the early stages of development. For example, the new
CAPL website; which can become multi-purpose, with all the tools
and technology the “techies” can handle, while at the same time
maintaining a user friendly, intuitive platform that all members
can easily navigate.
While the website is the most obvious of these initiatives, it is
not the sole focus of the Technology Committee. The Committee
is researching ideas that will improve other procedures and
processes and is always looking for new ideas.
Hopefully, by now, you have had an opportunity to view and use
the new CAPL homepage. If not, please take a few minutes to do so.
CAPL members, it is your website; should you have any questions,
comments or suggestions about the website, please contact me
directly at [email protected] and give me your feedback. m
Sally Jackson
Director, Technology
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Message From the Executive
tHe Business develoPment Portfolio manaGes all Current CaPl PreCedent doCuments, working with the
various committees to develop new
precedent documents as well as update
current documents. Our mandate also
includes government liaison on a wide variety of initiatives, includ-
ing the P&NG Information Exchange each year involving Alberta,
British Columbia and Saskatchewan. The area of government and
regulatory liaison has been especially interesting with initiatives
such as shallow rights reversion, BC DL reform, to name but a few.
I can’t recall a time in recent memory when CAPL has been
presented with more opportunities to participate in direct consul-
tation with governments, at all levels, in the development of
legislation, regulation and policy. These relationships are based
upon trust, respect and agreed objectives/principles that form the
basis of conversations for change.
accomplishmentsThe 2009 Petroleum Information Exchange was well attended.
Many thanks to the organizing committee, consisting of CAPLA
and CAPL members, who made this event a success. Alberta
featured its Energy Strategy, Land-use Framework, FH Mineral
Tax, and ERCB’s – Licence Liability Rating Program. Saskatchewan
focused on ISC title developments, Petroleum Tenure Branch
changes, and well/facility liability management.
Revisions to the BC Drilling Licence Regulations were completed
and subsequently implemented during the summer. By and large
we successfully advanced our goal of creating a “best in class” DL
regulatory process for oil and gas activities in British Columbia.
That said, the need for tenure reform has become clearer as P&NG
play types rapidly evolve from conventional to unconventional.
Work continues on redrafting the CAPL Farmout and Royalty
Procedure, with more to follow...
Redrafting continues on the CAPL Freehold P&NG Lease.
This project has become more complicated in light of an unprec-
edented ERCB decision wherein they attempted to establish the
validity of a Freehold P&NG Lease. As the ERCB decision is the
subject of an appeal, it is hoped that the Courts will provide clarity
as to the criteria for establishing validity of freehold leases, as well
as the ERCB’s role in making these determinations.
looking aheadWork is progressing well on the 2010 Petroleum Information
Exchange. Commitments from Alberta Energy, ERCB, BC MEMPR
and Saskatchewan promise to make this years Information
Exchange both exciting and informative.
The BC MEMPR has invited CAPL and other industry groups
to participate in an extensive Tenure Review process which will
review selected sections of the BC Petroleum and Natural Gas
Act and related Regulations. This will commence with a one-day
opportunity framing meeting to be held the first week of February,
and is expected to take some 20 months to complete.
You will recall that, effective January 1, 2009, Shallow Rights
Reversion legislation was introduced in Alberta. Alberta Energy
will be presenting an Information Letter as to how and when the
affected leases will be reviewed. The final plan includes details
on timelines along with how shallow rights reversion will apply to
new agreements as well as existing agreements. More to come …
Alberta Energy has commenced a two year Tenure Re-Engineering
Initiative focusing on the Mines and Minerals Act. The intent of this
review is to look for efficiencies for both industry and government.
Alberta Energy requested a special meeting with representatives
from CAPL and other industry groups, to consider possible amend-
ments to the Alberta Mines and Mineral Act.
Alberta Energy’s CCS Tenure Implementation Committee is
developing a process to grant the use of pore space (rights) for
the purpose of carbon dioxide (CO2) disposal. Industry consulta-
tion will occur through the Tenure Industry Advisory Committee
where CAPL is well represented.
Alberta Energy is also revisiting Oil Sands Tenure Legislation,
Regulations and Policies with industry representatives.
Alberta has struck a Task Force for Alberta Remediation,
Abandonment and Reclamation. Comprised of representatives
from Alberta Energy, ERCB, Alberta Environment, ASRD, and CAPL
as well as other industry groups, the mandate of this Task Force
is to consider the timeliness of wells that have been suspended,
abandoned or are waiting final reclamation certification.
To accommodate E-Tenure, Saskatchewan is proposing amend-
ments to The Crown Minerals Act. This bill is now available for
viewing on the Legislature of Saskatchewan web site (www.legas-
sembly.sk.ca <http://www.legassembly.sk.ca>.) The direct link to Bill
125 is <http://www.legassembly.sk.ca/bills/pdfs/3_26/bill-125.pdf>
With the large number of initiatives currently underway, it
is essential that CAPL be well represented with energetic, dedi-
cated people who have strong communication skills, a spirit of
volunteerism, commitment and professionalism. We thank those
already involved. If you have an interest in participating in one of
these initiatives, please contact me or the CAPL office. m
Frank Terner, P. Land
Director, Business Development
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Get Smartthe CaPl education Committee is pleased to present the following courses:
Understanding Natural Gas And Crude Oil Marketing
march 2, 2010 8:30 a.m. to 4:30 p.m.
This seminar is designed for industry personnel who want an
overview of the fundamentals of gas marketing. The seminar
will begin with a brief discussion of the history of gas marketing
and some of the more commonly used industry terminology and
methods of measurement. It will cover the North American supply
and demand picture including new areas of exploration and
the demand growth forecasts driven by new power generation.
The course will review the transportation of natural gas and how
to devaluate new pipelines and pipeline space. The course will
then examine the fundamentals of natural gas pricing, storage
and the basics of risk management. The second part of the course
will cover crude oil marketing and conventional crude qualities.
The instructor will touch on supply, pricing, and market factors as
it related to Canadian crude.
2007 CAPL Operating Procedure
march 4, 2010 8:30 a.m. to 4:30 p.m.
This one day course is an overview of the 2007 CAPL Operating
Procedure focused specifically on the changes between the
1990 and the new document. It is meant to enable personnel
to appreciate substantive differences between the 1990 and the
2007 documents. All experience levels are welcome but it should
be noted that the course will not be focused on the basics of the
operating procedure.
Constructive Conflict Management (PSL)
march 9, 2010 8:30 a.m. to 4:30 p.m.
This seminar is intended for individuals who deal with conflict in
the workplace on a regular basis and require a platform to better
deal with it. The instructor will discuss how and why conflict
occurs in the workplace and discuss solutions for dealing with it
and avoiding it in the future. Topics will include professionalism,
defusing angry and aggressive subjects, and understanding why
people act as they do during conflicts. Both presentations and
interactive discussion will be used throughout the course to help
identify the difference between people’s positions and their inter-
ests. The course will conclude with an interactive skills practice
session focusing on newly learned Active Listening Skills.
Selected Developments In Oil And Gas Law
march 10 & 24, 2010 8:30 a.m. to 4:30 p.m.
This two day seminar (although valuable to persons at all levels)
is targeted for more senior industry personnel and is suitable for
personnel in all aspects of the oil and gas business, especially,
those involved in the acquisition and administration of oil and
gas lands, leases and other interests, as well as those involved
in the negotiation, drafting, interpretation and application of the
various contracts used in the industry. This seminar will review
the manner in which courts have dealt with selected issues in
oil and gas law; illustrate the effect of the said decisions on the
everyday practices and procedures of the industry; demonstrate
how to identify similar problems in the future; provide practical
suggestions on how to avoid or resolve the said legal issues; and,
most importantly, explain the rationale behind the said decisions
and recommendations.
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Directive 056: ERCB Energy Development Application &
Directive 60 Public Consultation Requirements
march 11 & 12, 2010 8:30 a.m. to 4:30 p.m.
This is a two day seminar which helps participants understand
the public consultation requirements, expectations of the ERCB
and assists companies in completing the application or audit
processes for regulatory compliance. This seminar is designed for
land agents, land administrators, operations engineers as well as
any other personnel who may be responsible for ERCB applica-
tions or regulatory compliance issues.
Fiduciary Duties
march 16, 2010 9:30 a.m. to 12:00 p.m.
This seminar is intended for experienced landmen and joint
venture personnel who are involved in acquisitions, divestments
and other transactions or interpretation of exploration, operating,
joint ventures and other agreements. It is also for P.Land holders
who require re-certification. This seminar will focus on problem
areas arising in the context of both transactions and day-to-day
operations. Case examples and court decisions specific to land
related issues will be presented and discussed. Specifically, this
course will emphasize situations and circumstances where fidu-
ciary duties do and do not arise and the nature of these duties.
Professional Ethics: Theory And Application
march 16, 2010 1:00 p.m. to 4:30 p.m.
This seminar is intended for all interested land personnel, P.Land
holders who require re-certification and all prospective new CAPL
members. This seminar is intended to increase the understanding
of ethics and the dimensions to ethical behaviour by stimulating
the ethical thought process, giving a basic introduction to the
nuances of ethics, introducing a number of methods used in ethi-
cal decision making, and providing a forum for discussions with
respect to land related ethical issues. Case studies will encourage
class discussion and give each participant insight into the moral-
ity vs legality question.
A Practical Guide to Title Review and Acquisitions
march 18, 2010 8:30 a.m. to 4:30 p.m.
This seminar is intended for landmen and other industry person-
nel who are responsible for coordinating the conduct of title
review with outside counsel or those conducting due diligence
reviews and rectifying title deficiencies when acquiring assets.
This seminar will focus on the practical aspects of title and due
diligence reviews when acquiring assets in Western Canada.
Attendees will benefit from the suggestions presented to make the
title review process involving outside counsel more cost-effective
and efficient, enabling you to interpret the title opinion and use it
as a working document in your land administration system.
Surface Land Management
march 23, 2010 8:30 a.m. to 4:30 p.m.
This seminar is directed towards professionals such as mineral
landmen, engineers, and geologists who work with their surface
land department or manage the surface land group as a part
of a larger team. Individuals new to the industry would also
benefit from this course. This course will provide an overview
of the surface land process from project kick-off to licensing.
Areas discussed will include the acquisition process on both
private and crown lands, applicable acts and regulations, compen-
sation calculations, documentation requirements and addendums,
survey plans, ERCB participant involvement and consultation
requirements, ERCB non-routine license applications, Surface
Rights Board applications and how to use these processes to gain
access to land.
Conventional Exploration Agreements: Junior Level
march 25, 2010 8:30 a.m. to 4:30 p.m.
This seminar is intended for those landmen, contract analysts and
administrators requiring an introductory understanding of explo-
ration agreements. The seminar will focus primarily on reviewing
typical agreements such as farmouts, seismic options, pooling
and joint operating agreements through the utilization of sample
letter agreements, formal agreements and precedents.
Resolving Conflict Through Negotiation
march 30, 2010 8:30 a.m. to 4:30 p.m.
This seminar is designed for landmen and other individuals who
wish to upgrade their communication skills through the use of
interest-based negotiations. This negotiation model is the model
used in the settlement of disputes by the ERCB and subscribed
to by the C2C Task Force. This seminar will instruct negotiators
of any level of experience in the skills of interest-based negotia-
tions which is formulated on the Harvard and Justice Institute of
British Columbia Model. The seminar will focus on practicing
select communication skills to: i) identify the negotiation matter
at issue, ii) discover and understand both your own and the other
party’s underlying interests which are motivating the hardened
positions taken in the negotiation; and iii) brainstorm options
which meet the underlying interests common to both parties and
unique to each party so that a win-win agreement can be reached.
When agreements are based on interests rather than positions the
parties are more satisfied with the outcome and the relationships
are preserved for future negotiations. Special attention will also be
paid to handling the other party’s pressure tactics.
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Surface Rights Law (PSL)
april 6, 2010 8:30 a.m. to 4:30 p.m.
This is a full day course for industry personnel working with
Surface Agreements and the applicable legislation governing the
rights of the surface owners and third parties. The course is for the
purpose of learning the applicable Statues and Regulations that
govern freehold surface land agreements and the execution of
such documentation. The course will include a review of the Land
Agents Licensing Act, Land Titles Act, Surface Rights Act, Dower
Act, Devolution of Real Property Act, Agricultural and Recreational
Land Ownership Act, Law of Property Act and a number of other
statues in force in the Province of Alberta that the land agent
should be aware of.
Negotiation Skills For Surface Land Agents (PSL)
april 13, 2010 8:30 a.m. to 4:30 p.m.
This one-day seminar is designed to look at negotiations from a
perspective of positional bargaining vs. interest based negotiation.
Various elements of a typically negotiation will be examined and
strategies for dealing with aggressive and more difficult negotia-
tors will also be addressed. The instructor will lead the participants
through an examination of all of the elements contained within
a typical negotiation. This workshop will provide participants
with numerous interactive industry related negotiation scenarios
throughout the day so that participants can put into action the
skills they have learned during the early stages of the workshop.
1999 CAPL Freehold Mineral Lease
april 15, 2010 8:30 a.m. to 12:00 p.m.
This seminar will be of value to anyone working with Freehold
Mineral Leases. A discussion of the philosophy adopted by the
Freehold Mineral Lease Committee will be followed by a review
and discussion of the changes made to the 1999 Freehold Lease
and its impact on the industry.
Royalty Calculations (New)april 15, 2010 1:00 p.m. to 4:30 p.m.
This seminar would be of value to senior land, accounting,
production and joint venture personnel who require a thorough
understanding of the complexities and implication of royalty
calculations. This half-day seminar will focus on a case study
approach to examining the complexities and implications of vari-
ous actual royalty clauses and calculations.
1990 and 2007 CAPL Operating Procedures
april 20 & 21, 2010 8:30 a.m. to 4:30 p.m.
This is a two-day seminar intended for land personnel who are
involved with joint interest agreements on a day-to-day basis and
therefore require a thorough understanding of the CAPL Operating
Procedure. The CAPL Operating Procedure is the industry bench-
mark document for operations conducted on jointly held lands.
In this seminar, the 1990 and 2007 CAPL Operating Procedures
will be discussed in detail with particular emphasis on its day-
to-day application. Comparisons will be made to previous CAPL
Operating Procedures in certain key areas.
Professional Ethics: Identifying And Applying
Your Core Values (New)april 27, 2010 8:30 a.m. to 4:30 p.m.
This seminar is intended for all interested land personnel, P.Land
holders who require re-certification and all prospective new CAPL
members. In this course the participants will be given the oppor-
tunity to identify their core values, the possible sources for those
values, and how those values express themselves in both their
personal and professional life. Attention will also be given to the
development of personal mission and vision statements and how
they reflect the core values identified. In this seminar there is an
emphasis on the practical application of the themes discussed.
Surface A&D (PSL) (New)april 29, 2010 8:30 a.m. to 12:00 p.m.
This half day seminar is designed for surface land person-
nel requiring an introduction to surface rights management
in the acquisition and divestiture of operated properties.
The course is also valuable to supervisors and managers in the
area. This seminar is designed to provide an overview of surface
land issues in the acquisition and divestiture of operated prop-
erties. Topics include a sample checklist, lease and agreement
conveyancing, well licenses and LLR review, transfers, easements
and rights-of-way, transfer of caveats, road use agreements, notice
to landowners and occupants, electronic processes in Crown
dispositions and license transfers, and environmental approvals.
The course is presented from an Alberta perspective, but much of
the material and process is relevant to other jurisdictions. m
Registration can be done online at www.landman.ca. Full course
descriptions can be found online at www.landman.ca/course_calendar.
php. For further information, please contact the CAPL office either by
phone at 403-237-6635, or email [email protected].
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Phone: 1-866-834-0008 | www.landsolutions.ca
def: LandSolutions Inc., company:1. the acknowledged Experts in Land Acquisition, Land Management, and Public Involvement for the petroleum and renewable energy industries, power generation, transmission and public infrastructure providers; 2. providers of expert management of large or small projects, with complex or simple solutions; 3. an experienced team that works with a well established client-driven process—ensuring unparalleled results over the full range of land services; 4. count on LandSolutions: the Experts.
LAND ACQUISITION & MANAGEMENT
def: LAND, noun: 1. any part of the earth’s surface not covered by a body of water; 2. an area of ground with specific boundaries; 3. rural or farming areas, as contrasted with urban areas
def: SOLUTION, noun:1. the act of solving a problem, question, etc.; 2. the state of being solved; 3. an explanation or answer; 4. the process of determining the answer to a problem, or the answer itself
def: EXPERT, noun: 1. a person or company who has special skill or knowledge in a particular field; specialist; authority; 2. a person or company who has achieved such a rating; 3. possessing special skill or knowledge; trained by practice; skillful and skilled; 4. pertaining to expert work; expert advice
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Roster Updatesnew members
The following members were approved by a
Motion on February 2, 2010:
Applicant Current Employer Sponsors
Active
Sandra Forsythe Paramount energy susan Hargreaves
trust al lyon, P.land
Kari webb
Gavan Gillespie southern Cross Cathy armstrong
land Corp. russell jensen
Gerald talbot
Richard Martens landsolutions inc. shawn Howard
jarvis nicoll, Psl
tyler semashkewich, Psl
Ryan Stackhouse ConocoPhillips dale fox
Canada Gary montgomery, P.land
ron vermeulen, P.land
Associate
Laura Brick energy navigator mike Galvin
Carla neumeier
Peter Parkinson
Kristen McDonald scott land Kristy Halatskulsky
& lease ltd. jeff mcmanus
Greg meidinger
Anthony Melton altus Geomatics lP max Coote
wayne Geddes, P.land
shawn irwin
Student
Patricia Thomas olds College doug Peters
Active to Associate
Terry McFarlane independent
Active to Senior
Brian Baker independent
Harold Hegland Cornell resources ltd.
Margaret Hendriks independent
Margaret Holmes, P.Land lumina energy inc.
David Kinton moose Pasture resources ltd.
Richard Youell Cedar rim resources ltd. m
on the moveDavid Balderston suncor energy inc.
to suncor energy services inc.
Larry Braun, P.Land Canadian forest oil ltd.
to Cordoba resources, ltd.
Barbara Brousseau Paramount resources ltd.
to nal resources management limited
Gary Brown enCana Corporation
to Cenovus energy
Shaun Cooper PetroBakken energy ltd.
to result energy inc.
Carolanne DeBiasio PetroCanada oil and Gas
to suncor energy services inc.
Connie De Ciancio PetroCanada oil and Gas
to Base oil & Gas ltd.
Josh Driedger Pioneer Professional services Group
to Canadian natural resources limited
Patricia Elasz tristar oil & Gas ltd.
to PetroBakken energy ltd.
Christopher Ellis talisman energy inc.
to landsolutions inc.
Dorothy Else ddsB Consulting ltd.
to manitok exploration inc.
Mark Fawcett Breaker energy ltd.
to independent
Sharon Gordon, P.Land enerplus Group
to independent
Brian Hagerman enCana Corporation
to Cenovus energy
Ryan Hall enerplus Group
to independent
Gordon Howe iteration energy ltd.
to Canadian forest oil ltd.
Andrew Hyslop PetroCanada oil and Gas
to independent
Justin Kangarloo enCana Corporation
to Cenovus energy
Chris Koichopolos ConocoPhillips Canada
to 658903 alberta limited
Amanda Kuspira landsolutions inc.
to independent
Gregg Larson, P.Land altia energy ltd.
to independent
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1250, 396 – 11th Ave S.W. T2R 0C5
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Paul Lyzaniwski independent
to terra energy Corp.
Gary McCullough, P.Land independent
to Petrouno resources ltd.
Cory McWhinnie PetroCanada oil and Gas
to suncor energy services inc.
Bente Nelson enCana Corporation
to Cenovus energy
Rob Pitchford enCana Corporation
to Cenovus energy
Jeff Rideout, P.Land independent
to elkhorn resources inc.
Barry Rowe, P.Land landro resources inc.
to maverick land Consultants ltd.
Beverly Shatosky, P.Land enerplus Group
to independent
Jamie Solland enCana Corporation
to Cenovus energy
David Taylor, P.Land independent
to PetroBakken energy ltd.
Christopher Valentine trafina energy ltd.
to westCan Hydrocarbon fund ltd.
Thom Vysohlid, P.Land indepedent
to Hanna oil and Gas Company – Canada ulC
Rick Youell medora resources inc.
to Cedar rim resources ltd.
Jason Zelinski enCana Corporation
to Cenovus energy m
In Memoriamsharon HokansonIt is with deepest sadness that the CAPL announces the recent
passing of a member. Sharon Hokanson passed away on January 11,
2010 at the age of 61. Sharon was born in Wadena, Saskatchewan
and worked at Shell Canada for 34 years and lately contracted at
NAL. She became a member of the CAPL in 1993. Sharon enriched
the lives of those who knew her and will be truly missed. m
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Farmouts. Sales. Opportunities.
PNG Exchange is a web-based service for landmen and oil and gas professionals looking to acquire or dispose of properties. PNG Exchange benefits companies by allowing users to customize their property postings, while reaching the maximum number of interested parties in the marketplace. It is the quickest and most cost-effective way for disposing and acquiring parties to connect. Check us out today.
Find out more by contacting Christian Lindved-Jensen at403 462 8057 or [email protected].
The Canadian Association of
Petroleum Landmen and the
Canadian Association of Petroleum
Land Administration are pleased to
announce the three Western Provinces
will be in attendance for the PNG
Information Exchange. Further details
will be provided on the topics to be
discussed prior to the event.
To continue the success of the PNG Information Exchange, CAPL and CAPLA require industry's support of this event. For more information
and to register, visit the CAPL website at: http//www.landman.ca.
PNG INFORMATION EXCHANGE
April 22nd, 2010 • Telus Convention Centre
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LandSolutions Inc. #200, 601-10 Ave SW Calgary, AB T2R 0B2 1-866-834-0008ALSO SERVING: British Columbia, Manitoba, Ontario, Eastern Canada, and throughout Midwest US.
WESTERN CANADA LAND SALE and DRILLING RIG REVIEW
THE EXPERTS IN LAND ACQUISITIONAND MANAGEMENT SERVICES.
AREATotal Ha Sold (thousands)
Average$ / Ha
BC 9,444 $1,371
AB - Foothills 21,225 $243
AB - Plains 50,411 $853
AB - Northern 60,928 $1,141
SK No Sale $0
MB No Sale $0
January 2010
NOTE: Numbers are rounded
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
6500
7000
7500
8000
8500
9000
9500
10000
Land Sale DataManitoba British Columbia Saskatchewan Alberta
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
January 2010 January 2009 January 2008 January 2007 January 2006 January 2005
Drilling Rig Utilization Rate
Utilization Rate
0
100
200
300
400
500
600
700
800
900
January 2010 January 2009 January 2008 January 2007 January 2006 January 2005
Drilling Report for Last 5 Years
Drilling
Down
Total
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bollywood
HOST RECEPTION: 6:00 - 7:00 P.M. DINNER: 7:30 P.M. DANCE: 9:30 P.M. BAND: THE REAL DEAL TICKETS: $125.00
S P R I N GB A L L
2 0 1 0 C A P L P R E S I D E N T ’ S
SATURDAY, MAY 8, 2010 THE WESTIN CALGARY
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Olds CollegeLand Agent/Land Administrationannual reception/networking evening 2010 ‘sponsorship’We are once again requesting your support in helping sponsor
costs of our student/industry networking evening. Sponsorship
and advertising dollars supplement the College’s contribution and
help maintain the caliber of this event. This annual event provides
companies with the opportunity to personally meet and talk to
potential employees and build your network.
Please consider the following:
1) Donating directly to the program – Citing Sponsorship of the
Land Agent/Land Admin Annual Reception;
2) Company booth space at our annual reception also sold on a first
come – first serve basis;
3) Advertisement space sold on a first come – first serve basis in the
Olds College Land Agent and Land Admin students resume/
profile book.
Advertising spaces available are:
AD Size Amount
inside full page $300.00
1/2 page inside $250.00
1/4 page inside $200.00
Advertising for 2/3 of the Front Page and the Back Cover will “sell”
by “silent” email auction. Please send your bid amount to tlloyd@
oldscollege.ca.
Approximately 75 hardcopies and 50 cds of the Student
Resume Book will be distributed at the Networking Evening to
potential employers of Olds College students. The proofs for the
Ads will need to be submitted by the end of February 2010 for
duplication purposes.
For any one of the above donation/advertising opportunities
please contact Tara Lloyd, via e-mail [email protected] or tele-
phone (403) 556-8207.
Thank you for your continued support of our Annual Event from
the Land Agent and Land Administration Programs at Olds College. m
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Surface • Public Consultation • Freehold Leasing • A & D • Oil Sands • Pipelines • Land Sales • Environmental • Contract Staffing
Experienced professionalsdelivering high quality workout of 6 full service offices.
CalgaryEdmontonLloydminsterReginaGrande PrairieFort St. John
403-261-1000scottland.ca
Scott Land & Lease Ad Final 1/15/09 5:16 PM Page 1
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CAPL Calendar of Eventsmarch 2 Tuesday Understanding Natural Gas & Crude Oil Marketing 4 Thursday 2007 CAPL Operating Procedure 6 Saturday Squash Tournament 9 Tuesday PSL: Constructive Conflict Management 10 Wednesday Selected Developments in Oil & Gas Law 10 Wednesday Alberta Land Sale 11-12 Thur-Fri (PSL) Directive 56: ERCB Energy Development
Application & Directive 60: Public Consultation Requirements
16 Tuesday Ethics 16 Tuesday Fiduciary Duties 17 Wednesday St. Patrick’s Day 18 Thursday A Practical Guide to Title Review and Acquisitions 18 Thursday Networking Night & General Meeting 23 Tuesday Surface Land Management 24 Wednesday Selected Developments in Oil & Gas Law 24 Wednesday Alberta Land Sale 24 Wednesday British Columbia Land Sale 25 Thursday Conventional Exploration Agreements:
Junior Level 30 Tuesday Resolving Conflict Through Negotiations m
april 2 Friday Good Friday 4 Sunday Easter Sunday 6 Tuesday (PSL) Surface Rights Law 6 Tuesday Board Meeting 7 Wednesday Alberta Land Sale 12 Monday Saskatchewan Land Sale 13 Tuesday (PSL) Negotiating Skills for Surface Land Agents 15 Thursday 1999 CAPL Freehold Mineral Lease 15 Thursday Royalty Calculations 15 Thursday General Meeting and Annual Elections 20-21 Tue-Wed 1990 CAPL Operating Procedure 21 Wednesday Alberta Land Sale 21 Wednesday British Columbia Land Sale 27 Tuesday Professional Ethics: Identifying and
Applying Your Core Values 29 Thursday (PSL) Surface A&D m
March Meetingnetworking eveningthursday, march 18, 2010
Reception: 5:00 p.m. until 9:00 p.m.
Location: Murrieta’s Bar & Grill
#200, 808 – 1 Street S.W.
Cost: CAPL Members No Charge
Guests $73.00 includes GST
Drink tickets can be pre-ordered from the CAPL office by download-
ing the order form available on the website starting February 28, 2010.
All members are required to confirm their attendance by fax or email.
Fax registration forms to 403-263-1620, Attn: Karin Steers or email
[email protected]. Please confirm your attendance prior to noon on
Thursday, March 11, 2010. m
April MeetingGeneral meeting and annual electionsthursday, april 15, 2010
Lunch: 11:30 a.m. to 1:30 p.m.
Location: The Westin Hotel
320 – 4 Avenue S.W.
Cost: CAPL Members No Charge
Guests $68.25 includes GST
All members are required to confirm their attendance by fax or email.
Only guests are required to purchase a ticket. guest tickets will be
sent to you with an invoice. Fax registration forms to 403-263-1620,
Attn: Irene Krickhan or email [email protected]. Please confirm
your attendance prior to noon on Thursday, April 8, 2010. m
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AccuMap is the choice of both seasoned oil & gas pros as well as the new tide of explorationists. AccuMap’s ability to quickly and accurately gather and display mountains of surface and subsurface data—using Canada’s most comprehensive dataset (nearly 50 years worth!) makes it a natural for teams like Crescent Point Energy.
In today’s fiercely competitive marketplace, where accurate data translates to added dollars can you afford to take chances with anything less than the industry standard?
Visit us at ihs.com/accumapconnect and discover what “competitive advantage” really means.
“AccuMap® is an integral part ofour interactive team approach.”(Plus without it, we’d need pencil crayons and lots of them.)
“AccuMap’s been on my computer for 10 years.”
“The program’s open on my desktop from the moment I get to work to the moment I leave.”
“For building maps, performingcompetitive research and exploringpositioning opportunities, Accumap delivers.”
“AccuMap is the industry standard.”
— The Crescent Point Energy Trust Land Team
©2008 IH
S Inc. A
ll rights reserved.
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Leading the way with customer-driven data, integrated software and services for your upstream decision-making needs.
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THANK YOU. Without you there, our industry-leading, fully-integrated solution wouldn’t be complete.