Bulletin – Subsurface Orders – Oil and Gas Conservation Rules
The AER announced an amendment to the Oil and Gas Conservation Rules (“OGCR”), which now allow for the AER to make subsurface orders. The nature of such new orders is set out in the newly enacted section 11.104 of the OGCR:
11.104 Notwithstanding sections 3.050, 3.051, 3.060, 4.021, 4.030, 4.040, 7.025, 10.060, 11.010, 11.102 and 11.145, if the Regulator is satisfied that it is appropriate to do so, the Regulator may, on its own motion, issue a subsurface order that
(a) designates a zone in a specific geographic area, and
(b) prescribes requirements pertaining to spacing, target areas, multi-zone wells, allowables, production rates and other subsurface matters within that zone, in which case if there is a conflict or inconsistency between the subsurface order and any of the sections referred to above, the subsurface order prevails to the extent of the conflict or inconsistency.
Bulletin 2015-05 explains that:
(a) The AER’s assessment process will include an evaluation of risks to resource recovery and reservoir equity;
(b) The AER will assess trends in down-spacing and other resource applications to identify potential opportunities for subsurface orders;
(c) Subsurface orders will be announced via bulletin;
(d) Subsurface orders will not alter mineral rights, tenure, or royalty matters; and
(e) Subsurface orders will only address regulatory matters under the AER’s jurisdiction, and will not predetermine regulatory approval of any other facilities or activities associated with the development of the resources identified in the subsurface order.
The OGCR remains otherwise unchanged from its previous iteration.
