Bulletin – Good Production Practice
The AER announced changes to the administration of Good Production Practice (“GPP”) for wells in a newly defined oil pool. The AER may grant GPP status under section 10.060 of the Oil and Gas Conservation Rules (“OGCR”), either of its own discretion, or by approving an application under Directive 065: Resources Applications for Oil and Gas Reservoirs (“Directive 065”). Effective October 1, 2015, the AER will begin using AER form O-38: Application for New Well Base MRL (“O-38”) to assign GPP status to a well in a newly defined oil pool where gas is being conserved in accordance with Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting.
However, in the following circumstances, GPP status will not be administered through the O-38 application process and wells will be subject to maximum rate limitation (“MRL”) administration:
(a) Wells within a primary depletion area of a pool with enhanced oil recovery approvals; and
(b) Wells in a pool with a gas cap but no approval for concurrent production.
Licensees that wish to operate under GPP in such circumstances must apply in accordance with Directive 065.
The AER also announced that it would be reviewing and assessing GPP status for wells, and noted that as part of such review, it may:
(a) Remove GPP and establish rate controls where necessary;
(b) Require licensees to provide data, reports, and interpretations, including performance reports, to characterize the resource and ensure optimum resource recovery under sections 11.005 and 11.006 of the OGCR; and
(c) Review pools on maximum rate limitation (MRL) administration and propose GPP if appropriate.
The AER will further be reviewing pools under MRL administration, and beginning October 1, 2015, will grant GPP to pools based on the criteria set out above. GPP status will be posed for qualifying pools in the AER’s monthly MRL order.
