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Request for Regulatory Appeal by DBS Resources Ltd. & North Shore Resources Ltd., Request for Regulatory Appeal No.:1922370 & 1922372

Link to Decision Summarized

Request for Regulatory Appeal – Timeframe to File


In this decision, the AER considered DBS Resources Ltd. (“DBS”) and North Shore Resources Ltd. (“North Shore”)’s requests for regulatory appeal of their respective January 4, 2019 Notices to Pay Abandonment Costs (“Notices”) under section 38 of the Responsible Energy Development Act (“REDA”). The AER dismissed the requests for regulatory appeal of the Notices.

Background

On January 4, 2019, the AER sent North Shore two Notices of Abandonment Costs for wells 02/07-09-040-04W5M and 00/07-09-040-04W5M. The AER also sent a separate Notice of Abandonment Costs to DBS for the above wells. The letters advised the parties that the AER had completed the required work to properly abandon the well sites and informed the two companies that payment was required in full by February 4, 2019.

On February 22, 2019, DBS and North Shore responded to the Notices requesting a reduction of 38 percent of the abandonment costs or a meeting with the AER to discuss their concerns with the abandonment costs or an extension on the time for payment. On March 25, 2019, the AER responded to the February 22, 2019 letter outlining the AER’s authority to order a well abandoned, to require working interest partners to pay for this work and extended the deadline to pay from February 4, 2019, to April 30, 2019.

On April 23, 2019, DBS and North Shore filed separate (but identical) requests for regulatory appeal (the “Requests”) of the Notices.

Legislative Framework

The applicable provision of REDA regarding regulatory appeals states:

38(1) An eligible person may request a regulatory appeal of an appealable decision by filing a request for regulatory appeal with the Regulator in accordance with the rules.

Subsection 36(a) of REDA defines an “appealable decision.” For the present purposes, the AER noted that the relevant definition was contained in subsection 36(a)(iv), which states that an appealable decision includes:

A decision of the Regulator that was made under an energy resource enactment, if that decision was made without a hearing.

Reasons for Decision

DBS and North Shore argued that the March 25, 2019 letter contained many “appealable decisions.”

The AER found that the only decision contained in the March 25, 2019 letter, was to extend the time provided to DBS and North Shore to pay their portion of the costs. This was a separate decision from that contained in the January 4, 2019 Notices. While the decision to extend the time to pay was an appealable decision, it was not the subject of this request for regulatory appeal as there was nothing in the grounds for regulatory appeal or the reply materials to suggest that DBS and North Shore were challenging the extension of time that was granted. Accordingly, the AER found the January 4, 2019 Notices were appealable decisions and the subject matter of the Requests.

The AER noted that section 30(3) of the AER Rules of Practice (“Rules”) requires that a request for a regulatory appeal be made within the specified timeframes after the making of the decision for which an appeal is sought. The decision regarding the abandonment costs was made under section 30(2) of the Oil and Gas Conservation Act. Arguably, this cost allocation was an order, and therefore the seven-day timeframe in section 30(3)(j) of the Rules would apply. However, the AER found that even if the applicable timeframe for filing a request for regulatory appeal was the 30 days provided for in section 30(3)(m) of the Rules, then the Requests were out of time as they were made well after that period.

The AER found that, as the Requests were made outside of the timeframes specified in the Rules, the Requests were not filed in accordance with the Rules. The AER dismissed the Requests pursuant to section 39(4)(c) of the REDA.

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