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NEXUS ◗ February 2005
NEXUS
ANATOMY OFAN OIL AND GASPROPERTY TRANSACTION
NEXUSNEXUS
mailing address goes in this box
RETURN UNDELIVERABLE CANADIAN ADDRESSES TO1600, 140 – 4 Avenue S.W. Calgary, AB T2P 3N4Offi ce email: offi ce@caplacanada.org
PM 40825561
February 2005
ALSO IN THIS ISSUE◗ Executive Nominees
◗ CAPLA Management/Supervisor Roundtable
◗ Saskatchewan Land Registry –
Online Submission Tool
FIRST ANNUAL CAPLA/IRWA
SKI TRIP at LAKE LOUISE
Friday, March 4, 2005Members: $60
Non-Members: $70
Includes: round-trip bus ride, lift ticket, lunch,
après ski party and prizes!
Tickets can be purchased online at CAPLA or IRWA websites:www.caplacanada.org www.irwaonline.org
1600, 140 – 4 Avenue S.W. Calgary, AB T2P 3N4
Ph: (403) 571-0640 Fax: (403) 571-0644
Website: www.caplacanada.org
Offi ce Email: offi ce@caplacanada.org
NEXUS Email: nexus@caplacanada.org
Board of Directors President Audrey Atkins
Past President Candace Bakay
Vice-President Ty Hansen
Secretary Barbara MacBeath
Treasurer Sherry Sturko
Certifi cation Kevin MacFarlane
Communication Nancy Howes-Olmstead
Education Margarita Cowan
Events Joanna Pelletier
Government Relations Lynn Gregory
Industry Relations Gordon Dainard
Member Services Kelly Erickson
Special Events (Interim) Deb Waterhouse
Technology Kathy Ward
CAPLA NEXUS is a publication of CAPLA
Produced by the Communication Committee
NEXUS Email: nexus@caplacanada.org
Director Nancy Howes-Olmstead
Editor Wendy Walker
Assistant Editor Nadine Campbell
Design Folio Publication Design
Printing McAra Printing
Editorial Team Holly Anderson
Maarnie Shakespeare
Melissa Sadal
Publication Schedule Meeting Dates Article Submission Deadline Mailout March 22, 2005 March 17, 2005 April 26, 2005
September 27, 2005 June 17, 2005 August 24, 2005
November 22, 2005 September 8, 2005 October 13, 2005
Eff ective February 2005 CAPLA’s membership was 2011.
All 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.
IN THIS ISSUE
NEXUS FEBRUARY 2005
President’s Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Executive Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Trying to Find the Right Contact at Another Company? . . . 6
Government Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Come and Volunteer at the Food Bank! . . . . . . . . . . . . . . . . . . 7
Anatomy of an Oil and Gas Property Transaction . . . . . . . . . 8
Upcoming CAPLA Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
e-Tenure Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
CAPLA Management/Supervisor Roundtable . . . . . . . . . . . 27
Upcoming CAPL Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Events Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Saskatchewan Land Registry – Online Submission Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Asset Management Education Initiative . . . . . . . . . . . . . . . . . 33
CAPLA information at a glance . . . . . . . . . . . . . . . . . . . . . . . . . 34
Upcoming Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
NEXUS ◗ February 20052
President’s Message
Welcome to 2005. CAPLA is now into its 11th
year and we have a lot to celebrate.
We now have over 2000 members and
many of those who have volunteered over this past decade
have helped raise the profi le and standards for the profes-
sion of Land Administration.
Just some of our successes to date:
Certifi cation is well underway with 12 members
certifi ed with the designation CPLCA. This is a volun-
tary Certifi cation Program available to all active CAPLA
Members. Certifi cation acknowledges the CAPLA member
designated as one who has successfully completed one or
more of the three Certifi cation Exams. The certifi ed desig-
nations include the following:
◗ Certifi ed Petroleum Land Contract Administrator
(CPLCA) (available now)
◗ Certifi ed Petroleum Mineral Administrator
(CPMA) (estimated 2005/2006)
◗ Certifi ed Petroleum Surface Administrator (CPSA)
(estimated 2006/2007)
Communication will have a
new look for the Nexus in 2005
and the PR & Promotion sub-
committee has offi cially moved
under this portfolio with a Chair
appointed for both the Nexus
group and PR & P.
Conference 2004 was a
success with 724 people in
attendance. This sub-commit-
tee has been moved under a new
portfolio of the Special Events
Director. The Special Events committee will focus on
events such as all conferences, management night and work
with the Events committee as needed.
Education has continued to add to its list of courses
being offered, having added two new courses in 2004 and
revising another three. Two more courses are in the devel-
opment stage and will be added during 2005. The continu-
ing education provided by this committee to our members
did not exist just a mere decade ago. The shortage of time
and/or personnel that some companies face make this
increasingly ever more critical in the years to come.
Events volunteers continue
to work hard in order to
offer many opportunities for
networking and fun for its
members. They try hard to
come up with fresh ideas and
to partner with other industry
associations as much as possible
in order to help facilitate good
relations among the various
disciplines related to Land.
We now have over 2000
members and many of
those who have volunteered
over this past decade have
helped raise the profi le and
standards for the profession
of Land Administration
3NEXUS ◗ February 2005
Government Relations volunteers helped facilitate a
strong working relationship with government agencies with
task forces that didn’t previously exist and in doing so, the
government relations team has won the Premier’s Award of
Excellence not once, but twice.
Industry Relations has worked together with industry
to continue to enhance standard practices within industry
and continue to review practices and agreements to better
assist Land in their function.
Member Services and Mentoring have been working
hard to fi nd additional benefi ts for our members with vari-
ous member benefi ts and discounts, including a Jubilations
Dinner Theatre Club Membership joining the list in 2004.
Mentoring has taken a role in the electronic world with the
Mentoring Committee Knowledge Bank being a new addi-
tion to their services.
The Technology team has a great deal to celebrate.
The website continues to
provide benefi ts to our
members as an interactive tool,
as a resource for information
and a tool for registration of
education courses and events.
Executive is a committee
that consists of the Offi cers
of the Association. Their
mandate is to manage the day-
to-day business needs of CAPLA, as well as review the By-
Laws and current Policies to help identify gaps or changes
that may be required. This committee has had a very busy
2004 due to the growth of CAPLA and the fact that we are
now in a transition phase of this growth. Managing change
can be very challenging, to say the least.
One of the major changes that occurred in 2004
was moving into a downtown offi ce location as well as
the hiring of staff as opposed to contracting this service
out. Our two full-time, permanent offi ce staff will allow
CAPLA to offer service to our members coinciding with
industry business hours.
The Nominations Committee has found it diffi cult
throughout the history of our Association to formulate an
overwhelmingly successful recruitment strategy for Board
Membership. We have had many successes and many
individuals have aided the call to take on a leadership role
within CAPLA; however, there are still many members
who have leadership potential and are either unaware of
their potential or have other commitments preventing
them from stepping forward. Our Association needs each
and every one of you and, in order to continue on into the
future, leadership is essential. I would encourage those who
are not involved as a volunteer to do so and those who are
already volunteering in some capacity to consider a leader-
ship opportunity.
Part of the development plan that we have for our
members is not only to aid in their professional develop-
ment, but their personal development as well. The benefi ts
of volunteering may not be
tangible, but they are defi nite
and absolute. It is the goal of this
Board to assist new members in
order to get and create the greatest
benefi t to both parties. We have
implemented a Board orientation
program as well as training in the
areas of both Board Development
and Leadership.
Thank you for your support. Together we can continue
to look forward to both elevate the profession of Land and
to help give members the tools to do so.
Audrey Atkins
CAPLA President 2004-2006
Our Association needs each
and every one of you and in
order to continue on into the
future; leadership is essential
NEXUS ◗ February 20054
ExecutiveNominees
Name: Barbara MacBeathRunning for: SecretaryCurrent Employer: Baytex Energy Ltd.Years of Experience: 16 years Industry
Experience (8 years in Land Administration)
Focus Upon Successful Attainment of Position:CAPLA has entered into its second decade and we are now
a large association with approximately 2000 members.
My focus will be on ensuring that the decisions made by
the association and the policies developed by the Board
are properly documented to assist members in accessing
this information quickly and efficiently. I will do this by
reviewing and updating CAPLA’s record retention policy
and archival processes, taking full advantage of CAPLA’s
new downtown offices. Having already served as Board
Secretary for the last 2 years, I believe my experience gives
me the background required to properly structure CAPLA’s
archives for the benefit of the membership.
As a Board Member, I will fully participate in Board
Meetings and Planning Sessions and will represent the
members of CAPLA in a professional manner and to the
best of my abilities.
Contributions to Assist in Fulfilling Position:◗ 16 years industry experience.
◗ 5 years teaching courses in Land Administration
◗ Over 20 years of volunteering in 8 different organiza-
tions, including 6 years of volunteering with CAPLA
Name: Brandy K. BrhelleRunning for: Member Services DirectorCurrent Employer: Talisman EnergyYears of Experience: 2.5
Focus Upon Successful Attainment of Position:Highly Motivated, Team Player, Task & Goal Orientated.
If elected as Member Services Director, I would like
to work on continuing to expand our new membership as
well as maintain our present membership. One of my goals
is to raise awareness to the Myra Drumm Student Achieve-
ment Award and promote the importance of this award.
I would also like to strive to expand our membership
benefits and to continue to maintain the high standards
put in place by the past Member Services Directors.
I am proud to be a member of CAPLA and thankful for
the many opportunities being a member has brought me.
Contributions to Assist in Fulfilling Position:◗ Member since January 2003
◗ Volunteered for the Member Services Committee since
February 2003 and as Secretary since April 2003
◗ Mount Royal College – Petroleum Land Contact &
Administration Certificate
◗ The Career College – Oil & Gas Terminology
Diploma
◗ The Career College – Business Office Skills Diploma
Name: Deb WaterhouseRunning for: Special Events DirectorCurrent Employer: ConocoPhillips Canada
Resources Corp.Years of Experience: 20 years
Focus Upon Successful Attainment of Position:By working together with CAPLA’s executive team,
I will ensure CAPLA’s special events are effectively
5NEXUS ◗ February 2005
coordinated. As the Special Events Director, I envision my
role as providing guidance and expertise while facilitating
the volunteers who plan and implement the many special
events our membership enjoys. I will encourage CAPLA’s
members to participate and attend our many functions in
order to benefit from both the education and the network-
ing opportunities. Our members are fortunate in that our
many functions allow them to connect and communicate
at both business and personal levels. Furthermore I seek to
promote a greater awareness of CAPLA to our industry.
Contributions to Assist in Fulfilling Position:With my commitment towards professional growth in
CAPLA and my superior organization and communication
skills, I believe I have the contributions to fulfill the position
as the Special Events Director. I am a confident, articulate
and results-oriented professional who offers previous Confer-
ence practical experience. I believe I am capable of coordi-
nating the special events, as my position at ConocoPhillips
allows me to supervise and mentor junior contract and land
analysts. I am creative and cooperative, and I work equally
well individually or as part of a team. I have been involved
with CAPLA’s last three Conferences in both education
and exhibitor/signage roles. ConocoPhillips has assured me
of their support in this role.
Name: Joanna Pelletier Running for: Events Director Current Employer: NAL Resources LimitedYears of Experience: 4 years
Focus Upon Successful Attainment of Position:I will continue to work on providing quality networking
opportunities for the association. My focus this term is to
implement procedures for the various events and meetings.
With the completion of the procedures we will focus on
having reliable records and archives to ensure the contin-
ued success of the events.
Contributions to Assist in Fulfilling Position:I have been the director for the past two (2) years. I have
worked closely with the office staff, the board of directors, the
advisory counsel and past committee members to establish
the required training and mentorship necessary to fulfill my
commitments as director. I have established relationships with
various vendors; these relationships are beneficial when negoti-
ating the costs and availability of the venues.
Name: Karen PugsleyRunning for: Communication DirectorCurrent Employer: ConocoPhillips CanadaYears of Experience: 20
Focus Upon Successful Attainment of Position:I believe that good communication within CAPLA and
with industry stakeholders is the key to providing mean-
ingful value to our membership.
The focus I will make will be to support the Public
Relations and Promotions Committee in their initiatives to
increase CAPLA’s image within industry and to promote
land administration as a career destination. I would also
steer the NEXUS Committee to continue their efforts
in providing CAPLA’s membership with an informative
newsletter.
Finally, I will also focus on ensuring that CAPLA’s
membership has a voice that will be represented on the
Board of Directors.
Contributions to Assist in Fulfilling Position:My past contributions that will assist me in filling this
position are:
1. I served on CAPLA’s Standardization Surface Commit-
tee from the inception of CAPLA. Volunteering for
this committee for approximately 8 years we created
a contact list used by CAPLA members. We created a
sub-committee, which initiated the CAPLA Road Use
currently used by industry. We continually worked
NEXUS ◗ February 20056
with industry and governments stakeholders on
attempting to improve our business.
2. I also served on the Exhibitors Committee for the very
1st CAPLA Conference.
3. I also volunteered on the Accreditation Committee,
Surface Sub-Committee, now known as the Certifica-
tion Committee.
4. I served on the Board of Directors of The Minor
Hockey Association of Calgary (MHAC) as the Regis-
trar for 8 years. This position involved working with
the provincial governing body of minor hockey, our
Board of Directors, community associations, coaches,
parents, athletes. I also assisted MHAC in other volun-
teer capacities over the years.
5. I volunteered with Hockey Alberta for their high
performance program for male athletes for 4 years.
In the capacity as Director of Operations, I was
charged with working with the coaches, trainers,
Hockey Alberta, host committee, parents, athletes, and
host tournament committee. I found facilities for on
and off ice practice, created a budget, booked transpor-
tation and accommodation for the team. I can proudly
say some of the athletes I worked with have are now
playing in the NHL!
6. I have worked in the oil and gas industry for 24 years
and have a highly developed network people in indus-
try and government.
Vice-PresidentThe Nomination period for the position of Vice-President
has been extended to February 4, 2005. Any nominations
received for this position will be published on the CAPLA
website after February 4, 2005. In addition, any announce-
ments regarding the position of Vice-President will be
communicated via the website or mass e-mail distributed
by the CAPLA Office. For details of the position and for a
copy of the Nomination Form and Biography Form, visit
www.caplacanada.org under Downloads > Sign-In >
Executive Documents.
Trying to Find the Right Contact at Another Company?
The CAPLA Roster provides an opportunity for
each member to assist each other by enter-
ing their ‘Discipline’ on their Member Profile
information. Armed with this information, you may
not contact the person who can assist you right away
but at least you are more certain that your call will
be directed to the correct person more quickly.
Please take the time to check your Member
Profile information in the CAPLA Roster for accu-
racy and we encourage you to choose the discipline
that best describes your major area of responsibility
at your current company. If you are an Indepen-
dent, choose the category that best describes the
major contract service that you provide (e.g. Land
Contracts or A&D).
The categories that are currently available are:
A&D, Accounting, Business/Systems Support, Govern-
ment, Joint Venture, Management/Supervisory,
Mineral, Student, Surface and Related Discipline.
7NEXUS ◗ February 2005
Government Relationse-Transfer Broker Sub-Group Update
T his Task Force was initiated as a result of the imple-
mentation of e-Transfers and the appreciation of
the potential impact e-Transfers have on the process
used between Brokers and E&P Companies when acquir-
ing land at Crown Sales. The process under review is the
preparation, execution and delivery of a paper transfer by
the Broker to the E&P Company to hold on its fi le until
it chooses to register the transfer. As e-Transfers are now
mandatory, an alternative interim process is being recom-
mended. To date, the following has occurred:
◗ Sub-Group formed and several meetings have been
held and various Master Agreements and other types of
agreements were reviewed.
◗ Initially the committee recommended a “Master”
form of agreement be created to cover the relation-
ship between Brokers and E&P Companies on all
lands acquired at Crown sale or other acquisitions
as an alternative to the current Crown transfers that
are prepared. However, after reviewing all the vari-
ous agreements that were submitted the committee
decided to proceed with a more simple set of service
orders and a Trust and Agency Agreement that related
only to Alberta Crown.
◗ The committee will review the fi nal service and
Agency and Trust agreements in January 2005 with the
plan to roll out the agreements shortly thereafter.
Come and Volunteer at the Food Bank!
On March 23, 2005 from 6:00 to 8:00 p.m. the
Public Relations and Promotions Committee is
seeking volunteers who would like to come out
and make a difference in the community! The Committee
has volunteered two hours at the Calgary Interfaith Food
Bank to help out in any way we can whether it be making
food hampers, sorting through various goods, we want
to help! The only cost associated with this event is two
hours of your time… Please help CAPLA demonstrate its
support to those in need. Registration can take place via
the CAPLA website or by emailing the CAPLA offi ce at
offi ce@caplacanada.org.Deadline Registration is February 28, 2005.
Calgary Interfaith Food Bank
5000, 11th Street SE
Calgary, Alberta
Phone: (403) 253-2059
NEXUS ◗ February 20058
Anatomy of an Oil and Gas Property TransactionPart I – Conducting Due Diligence
Introduction
T he business environment for oil and gas property
acquisitions in Western Canada has never been more
competitive than it is today. Consequently, ensur-
ing that all elements of a transaction are fully understood
is critical to winning bids and ensuring that the transac-
tion meets expectations. The conduct of due diligence
in connection with a property acquisition is one way of
obtaining that understanding.
Due diligence is not limited to simply a review of the
vendor’s ownership of the assets or the conduct of corpo-
rate, courthouse and like searches in respect of the vendor,
but can be undertaken in respect of all aspects of the acqui-
sition. This point is illustrated by the multi-discipline team
of professionals often involved in the due diligence process:
landmen, engineers, geologists, accountants, tax specialists,
environmental specialists, lawyers, paralegals, administra-
tive personnel, marketing personnel, operations personnel
and human resources personnel. Specifi cally, due diligence
forms an essential and vital role in the following elements
of the transaction:
◗ evaluation of properties for bid purposes;
◗ confi rmation of assumptions and information used
in establishing bid price;
◗ identifying and addressing ownership concerns;
◗ identifying and addressing co-ownership and joint
venture relationship issues;
◗ identifying and addressing operational and infra-
structure issues;
◗ negotiating solutions to identifi ed issues;
◗ negotiating appropriate sale agreement provisions
and closing documentation; and
◗ assisting post-closing property integration, adminis-
tration, development and exploitation.
Goals and Bid FactorsAn appreciation of the goals of the purchaser and the
various bid factors applicable to a given transaction is
relevant to understanding what due diligence examinations
should be undertaken and will assist you in assessing the
signifi cance of any previously undisclosed issues discovered
pursuant to the due diligence process. The purchaser’s goals
can include some or all of the following:
9NEXUS ◗ February 2005
◗ add acreage to a core area, add new landholdings,
reserves and interests;
◗ enhance asset, facilities and reserves synergies,
including cash fl ow;
◗ opportunistic purchase, favourable acquisition price;
◗ increase shareholder value; and
◗ improve operational and administrative effi ciencies.
Prior to bidding for the properties, a purchaser will
consider its goals and all available information and data in
determining a bid price, including any publicly available or
vendor provided data, land and lease information, produc-
tion information, marketing, transportation, gathering and
processing related information, regulatory requirements,
environmental issues, human resource issues, competitor
issues and area activity. Bid factors relevant to this consid-
eration will include:
◗ type of asset: development, exploration, gas, oil, etc.;
◗ fi eld-area size and characteristics (e.g., remoteness,
diffi culty to produce, technically diffi cult play, etc.);
◗ existing contracts;
◗ operations considerations;
◗ facilities considerations; and
◗ competition for acquisition.
In assessing the information and data provided to it, the
purchaser will proceed to value the assets and transaction
taking into account some or all of the following:
Value Assessment◗ discounted cash fl ow
◗ proven and probable reserves
◗ period of payout
◗ rate of return
◗ tax pools
◗ tax effect
◗ price forecast
Accounting Information◗ volume/production
◗ operating costs
◗ revenue/income
◗ royalties
Production Information◗ volumes
◗ production profi les, water cuts
◗ well histories, status, operatorship, test information
◗ reservoir size and characteristics
◗ exploration information
◗ geological and reserves reports, studies and/or
mapping
◗ geophysical data
◗ production marketing
◗ existence of gas sales contracts
◗ ship/take or pay obligations
◗ crude oil, liquid, sulphur or other substances
(substance type)
◗ transportation obligations
◗ tax implications
◗ facilities information (plant, batteries, compressor
stations)
◗ geological considerations (upside, vertical rights)
◗ unit and operations details
◗ pipeline information and terms (gathering and trans-
portation)
◗ production penalties and encumbrances.
At some point, the purchaser will build a purchase price
model which will be used as the basis for arriving at a
proposed purchase price and addressing critical non-
monetary business terms. For example, the value of the
assets might be obtained by calculating the present value of
future net cash fl ow that one can expect to derive from the
properties. This is purely an estimate of net revenue, before
and after tax, which is then discounted and takes into
account the time value of money and other risks, to come
NEXUS ◗ February 200510
up with the present value. All such formulas and price
models are based upon assumptions of what will happen
in the future. Obviously, the impact of other material
issues will be considered, including environmental liabili-
ties, the monetary and strategic value of existing facilities
and infrastructure, the financial terms of midstream and
downstream material contracts, and operational and other
efficiencies and synergies.
Comprehensive Approach to Due DiligenceExperience indicates that the most successful approach to
conducting due diligence is a systemic approach requir-
ing the purchaser to obtain a comprehensive and inte-
grated understanding of the properties: from the reserves
through to the point of sale of production. A successful
due diligence process, accordingly, will result in a thorough
knowledge of all relevant matters including the vendor’s
ownership interest in the reserves, encumbrances thereon,
title deficiencies associated therewith, material terms of the
title and operating documents, details respecting exist-
ing wells, spacing units, facilities and surface rights, how
produced substances are gathered, processed, disposed of
and transported to market and ultimately sold and under
what contractual terms.
The information obtained from the due diligence
process can be used to revisit the purchase price model and
the various factors, information and assumptions gathered
and made in creating such model and assess the impact
of discrepancies and issues on the purchase price and the
critical non-monetary business terms. In addition, the due
diligence results can sometimes be used in conjunction
with the provisions of the sale agreement to terminate the
transaction, to seek amendment of key terms, to reduce the
purchase price or to address risk and liability in other ways.
Once closing has occurred, such due diligence results will
assist the purchaser in pro-actively addressing identified
issues and will assist the process of efficient and immedi-
ate digestion of the assets allowing operations to proceed
without unnecessary delay.
With this comprehensive understanding, a purchaser
can ensure that the assumptions and information that went
into its bid for the properties is consistent with reality
as disclosed pursuant to the due diligence examination.
However, a comprehensive review of all aspects of the
transaction and the target assets may not always be practi-
cal, economical or otherwise warranted.
How Much Due Diligence?The purchaser must always balance the degree, nature, and
type of due diligence to be conducted within the context
of the transaction itself. Informed decisions considering
the investment value of various due diligence investiga-
tions are critical when economics, time limitations or other
factors require that due diligence be selectively conducted.
However, making arbitrary decisions to carve back certain
due diligence investigations without an appreciation of the
assumptions and information used in arriving at the bid
price and the manner in which non-monetary business
issues were addressed may result in key investigations not
being conducted.
Similarly, a reasonable understanding of the types of
due diligence examinations that can be conducted will
assist a purchaser in determining what is required in a
particular transaction. The types of due diligence examina-
tions that can be conducted will be discussed in Part 2.
Part 2 – Types Of Due Diligence Examinations
Due Diligence in Respect of Reserves OwnershipThe information contained in a reserve report or a property
report is a critical component in establishing the bid price.
Accordingly, it is important that the purchaser ensure that
the information that forms the basis of the reserve report or
property report is accurate. A key element of that informa-
tion is the vendor’s stated ownership of the evaluated or
stated petroleum and natural gas rights (for purposes of this
discussion, we use reserves and petroleum and natural gas
rights interchangeably) and the lessor royalties and other
11NEXUS ◗ February 2005
encumbrances thereon. In establishing the value of the
reserves attributable to the vendor, evaluators will utilize the
property reports and information provided by the vendor.
Accordingly, the purchaser must ensure that those prop-
erty reports and information are accurate. In addition, in
reviewing the reserve report, the purchaser should consider
whether it agrees with the manner in which the evaluator has
arrived at the vendor’s net interest in such reserves pursuant
to the evaluator’s process of evaluating working interests,
convertible interests, net profits interest, carried interests,
gross overriding royalties, lessor royalties, regulatory or other
limitations on production and other encumbrances.
It is obvious that there would be a material negative
effect on the purchase price model if the vendor’s stated
ownership of reserves associated with a particular well is
overstated or the encumbrances on such interest are payable
on a higher percentage of production or paid at a higher rate
than stated. For example, if the vendor’s interest in a well
is evaluated as a 100% working interest but such interest is
subject to conversion to an undivided 50% working inter-
est upon payout of the well and the reserve report does not
reflect this, this may amount to a significant difference in
value, notwithstanding that an associated overriding royalty
may have been factored in. It may be an even more signifi-
cant difference in value if the well is very close to paying out.
Accordingly, any examination conducted in respect of the
vendor’s ownership of such reserves must be directly linked
to the information used in the evaluation of such reserves.
The process for conducting such investigation is
commonly referred to as a title review and may result in a
law firm preparing and providing a title opinion in respect
of the vendor’s interests in some or all of the assets or it can
be conducted by lawyers, landmen or other professionals
resulting in a non-opinion title report. Typically, the latter
report does not undertake all of the examinations which
would otherwise be required to have been made in connec-
tion with a title opinion.
A full title review will provide the purchaser with a
reasonable degree of comfort in regard to the vendor’s title
to and ownership of the target reserves. During this review,
all documents including correspondence, lease and contract
summary sheets and agreements contained in the mineral
contract files and mineral lease files and all relevant titles
and search letters and registered encumbrances are reviewed
and a title opinion is provided. In some instances a title
review on selected properties is conducted particularly
where most of the value associated with the transaction is
concentrated on specific assets. In some cases the scope of
the review might be narrowed to simply conduct relevant
searches, review land summary sheets and review the key
documents relating to such interests but not conduct the
scope of review required to render a title opinion.
Why is a title review necessary? Simply put, a title
review is necessary because (i) there is no registry of work-
ing and other interests on which prospective purchasers can
rely to ascertain a vendor’s ownership of reserves and (ii)
vendors are not prepared to provide an adequate warranty
and indemnity in respect of its ownership of reserves and
consequently the risk of title failure is passed on to the
purchaser. Generally, mineral ownership in Western Canada
is subject to either the freehold system or the Crown land
system. While both systems offer some (but not perfect)
protection and comfort in respect of obtaining and deter-
mining ownership of mineral interests, each has limitations
in ensuring that the current and proper beneficial owners
of the interests have recognized, registered and accurate
interests in the relevant lands or leases. Often, ownership
interests in petroleum and natural gas rights are acquired
through various sale agreements and joint venture title and
operating documents derived from a source document,
typically being a lease. Such owners may or may not have an
actual registered interest in the lease or lands. Accordingly,
it is necessary to examine all title documents relevant to a
vendor’s chain of title in order to ensure that the vendor has
acquired the interest that it purports to have as disclosed in
its property reports and land schedules. In addition, these
reviews are designed to determine that the encumbrances
on such interests are also as stated, that the leases and other
NEXUS ◗ February 200512
title and operating documents on which such interests are
based or derived are in good standing and that there are no
other defaults or issues existing under the leases or other
title documents including material terms of an adverse
nature (e.g., an ongoing area of mutual interest covenant).
This due diligence examination is designed to determine
the vendor’s ownership of reserves subsurface but does not
address surface assets, activities and operations.
Operations Due DiligenceWhere the asset profi le warrants it and where such matters
are strategic to the purchaser’s goals, the purchaser should
conduct at least some due diligence investigations into opera-
torship issues, the location, capabilities, contractual terms and
other aspects of gathering, processing, disposal and transpor-
tation facilities, transportation and marketing arrangements,
third party contract operating arrangements, third party
service arrangements and other aspects of the operations.
Such a review can be broken into the following multi-
faceted components:
◗ identifi cation and examination of surface rights;
◗ identifi cation and examination of facilities;
◗ identifi cation and examination of material contrac-
tual arrangements, including agreements for the
gathering, processing, disposal, transportation and
marketing of production, construction, ownership
and operating agreements, contract operating agree-
ments and other service arrangements;
◗ review of accounts, books and records; and
◗ equipment, fi eld and site inspections and environ-
mental audit.
Surface Rights ReviewIn conducting a surface rights review, the purchaser will
examine the existing surface leases, surface access agreements,
easements and rights-of-way to ensure that such rights are
suffi cient for all existing facilities and wells, there has been
material compliance with such arrangements, there are no
instances of trespass and there are no arrangements in respect
of which there is a current default. As well, if relevant, the
purchaser will wish to examine such documents (and often
the existing leases and title and operating documents associ-
ated with the hydrocarbon rights) with respect to any surface
access restrictions that might otherwise apply. Examples of
areas where surface access restrictions will apply include mili-
tary facilities, animal habitats and mating grounds, historical
sites, cemeteries and populated areas. In addition, such review
will assist the purchaser in determining whether the costs of
access are consistent with the assumptions which purchaser
has made in establishing its bid price. As an added bonus,
surface fi les are often a helpful source of determining whether
or not any environmental issues currently exist or have ever
existed in respect of the assets. In addition to the fi le review,
a surface review can include physical site inspections, obtain-
ing road ban information, and the conduct of searches with
Alberta Energy and the Land Titles Offi ce.
13NEXUS ◗ February 2005
Facilities ReviewIn connection with a facilities review, a purchaser will
attempt to learn the means by which production is gathered,
processed, disposed, transported and ultimately brought to
market from the wellhead through to the sales point and
confirm that the results are consistent with the data and
assumptions that went into its purchase price model.
The types of questions often asked by a purchaser in
connection with such a review include:
◗ What’s there?
◗ Who owns it?
◗ Who operates it?
◗ Where do produced substances go?
◗ How do produced substances get there?
◗ Are different substances gathered, processed, trans-
ported, marketed or disposed of differently and, if
so, how?
◗ Are licences and approvals in place?
◗ Can licences and approvals be transferred to
purchaser?
◗ What are the facilities’ capabilities and capacities?
◗ What ownership, co-ownership and operational
issues are there?
Such an examination includes a review of all of the vendor’s
relevant files and obtaining publicly available informa-
tion either directly from public sources (e.g., Energy and
Utilities Board) or from available third party sources (e.g.,
AccuMap) which is then synthesized with other pertinent
information gathered from other investigations and can
then be mapped for visual reference.
Material Contracts ReviewIn connection with the review of material contracts, the
purchaser may wish to review all gathering, processing,
disposal, transportation and marketing arrangements and
CO&O agreements, contract operating agreements and
service arrangements to confirm the information provided
to it in the data room. In some cases, written contracts may
not have been entered into and, accordingly, the purchaser
will have to rely upon whatever accounting or other infor-
mation that is available to it. In conducting such a review,
the purchaser will take into account:
◗ confirming financial terms and ownership interests
are as assumed;
◗ assessing the credit risk of counterparties;
◗ assessing the market value of fees and terms of
arrangements;
◗ assessing the stranded production risk (if behind
third party facilities);
◗ assessing competitor/counterparty issues; and
◗ assessing general business terms and conditions of
arrangements.
Accounts ReviewAn examination of the vendor’s accounts will help to
confirm much of the financial and other information
provided to the purchaser and could disclose material
issues such as the non-payment or late payment of royal-
ties, other encumbrances, AFE’s, trade creditors and other
cost items having a bearing on the assets.
Equipment, Field and Site Inspections and Environmental ReviewDuring equipment, field and site inspections, purchaser
will assess the condition, capability and suitability of the
assets, will conduct an inventory of equipment and will
complete some level of environmental review.
In connection with the foregoing, the purchaser may
also find it valuable to review the following:
◗ minutes of meetings of any operating committees of
common facilities of properties;
◗ equipment leases;
◗ government licences and permits;
◗ equipment warranties;
NEXUS ◗ February 200514
◗ utilities agreements;
◗ equipment schedules;
◗ maintenance records of significant equipment;
◗ fuel contracts and related agreements;
◗ equipment service agreements; and
◗ equipment purchase agreements.
Part 3 – The Bidding Process
Corporate Due DiligenceTypically, a purchaser conducts, or has its legal or other
representatives, conduct due diligence searches against the
vendor. Regardless of what other due diligence is being
conducted in connection with the transaction, we recom-
mend that a purchaser always conduct such searches
although, in some cases, depending upon the nature of
the assets involved, certain searches may not be necessary.
These searches do vary on a jurisdiction to jurisdiction
basis and, accordingly, we recommend you contact a
lawyer or other professional familiar with such searches to
determine what searches are appropriate with respect to
your specific transaction. The types of searches that can be
conducted include the following:
◗ Corporate: to determine the current status of the
vendor;
◗ Courthouse: to determine whether there are any
actions commenced against the vendor which might
impact the assets or the ability of the vendor to
complete the transaction;
◗ Personal Property Registry: to determine whether
or not there is any general or specific security
granted against the assets of the vendor;
◗ Bank of Canada: to determine whether or not
there is any Bank Act security granted by the vendor
which would attach to the assets;
◗ Workers’ Compensation Board: to determine
whether there are any statutory liens in existence
under the applicable statute;
◗ Employment Standards: to determine whether
there are any statutory liens in existence under the
applicable statute;
◗ Bankruptcy: to ensure the vendor has not commit-
ted an act of bankruptcy and, therefore, could not
complete the transaction; and
◗ Environmental: to determine whether there are
any environmental breaches or occurrences that
may affect the assets or the ability of the vendor to
complete the transaction.
Part 3 – The Bidding Process
Data Room Marketing ProcessIn some cases, a vendor and purchaser may complete a transac-
tion without the vendor having committed the assets to a
broader marketing process. Often this will happen in circum-
stances where vendor and purchaser own joint interests in the
subject properties and there is corresponding motivations to
sell or buy as the case may be (i.e., the property is non-core
to the vendor and the purchaser is interested in consolidat-
ing interests in it). In such circumstances, the purchaser will
already have a great deal of knowledge respecting the assets
and may not require any additional information disclosure in
order to make its initial bid. There are obvious advantages to
both the vendor and the purchaser in such an arrangement.
From the vendor’s perspective, these include minimizing the
transaction costs and eliminating the challenges of dealing with
purchasers unfamiliar with the assets while at the same time
achieving a reasonable premium to its retention value.
The purchaser will benefit from reduced or lack of competition
for the asset, a high degree of confidence in its knowledge of
the assets and its plans for them and reduced transaction costs.
In many cases when a vendor has committed itself to
disposing assets, it will wish to proceed with the marketing
of such assets through a formal process and to a broader
spectrum of potential purchasers. By doing so, the vendor
can dictate the rules of the process, the manner in which
bids may be made and ultimately obtain some comfort
15NEXUS ◗ February 2005
that it is obtaining the highest bids available at that time
under current market conditions. One key trade-off will
be the higher transaction costs involved, however, this can
be offset by obtaining a higher purchase price than vendor
otherwise would.
In connection with the marketing process, the vendor
will work with marketing professionals to prepare an
actual and/or virtual data room containing information,
documentation and evaluations relevant to the assets and
the valuation of the assets and a confidential information
memorandum and/or a data book summarizing such infor-
mation. The vendor will control access to the data room,
the form of bid letter or letter of intent and the process
by which a purchaser is selected. It is important that both
the vendor and the prospective purchaser understand the
rules of the bidding process and the terms of the form of
bid letter or letter of intent to ensure they understand what
obligations, if any, derive from the offering of the assets,
bidding on the assets and the execution and delivery of a
letter of intent.
On the basis of the information provided in the confi-
dential information memorandum and the data room, the
bidders will be requested to make bids on the assets on or
before a specified date. Typically, the vendor will specify
that it is under no obligation to accept the highest bidder’s
offer or any offer in respect of the assets. It is common
for the vendor to request non-binding bids, indications
of interest or letters of intent wherein the purchaser is
asked to provide the basic terms of its proposed purchase
such as purchase price, effective date (if not already set
by the vendor) and specifically required conditions. In
some cases, the vendor may have provided a copy of the
form of sale agreement that shall be entered into and may
require comments in respect of it be submitted with the
purchaser’s bid. Once the vendor has received such bids, it
will then narrow down the bids and meet with the leading
prospective purchasers with a view to finalizing the terms
of each bid and ultimately selecting the winning bid.
Confidentiality AgreementsPrior to providing a copy of the confidential information
memorandum, data book and access to the data room,
the vendor will typically require a prospective purchaser
(herein, a “bidder”) to execute a confidentiality agreement.
Some of the key points to be negotiated in a confidentiality
agreement include:
Definition of confidential information. The vendor
and the bidder will have different goals in identifying what
is confidential information and what exceptions there are
to it. Obviously, the vendor will want as broad a definition
as possible and the bidder will want it as narrow as possi-
ble. Typically the following are exceptions to what is to be
treated as confidential:
One. Information already in the public domain or
which subsequently becomes part of the public domain
through no fault of the bidder;
Two. Information that was in the possession of the bidder
at the time the information was disclosed and not directly or
indirectly acquired under an obligation of confidence; or
Three. Information that was received by the bidder
from a third party who had not acquired it directly or indi-
rectly from the vendor under an obligation of confidence.
Use and disclosure of confidential information.
Typically the use of confidential information is limited to
use in evaluating a possible transaction and there will be a
prohibition against its use for any other purpose. In some
cases, a vendor may attempt to include a provision whereby
the bidder will hold such confidential information, and any
benefits arising from the improper use of it, in trust for the
vendor. Such an inclusion may raise the bidder’s obligations
to a fiduciary standard and, accordingly, a bidder may require
that such provision is excluded from the confidentiality agree-
ment. In addition, the confidentiality agreement will likely
specify what representatives of the bidder are permitted to
obtain such information and provide for an indemnification
from the bidder against improper use or disclosure by such
representatives. The agreement should provide that the bidder
may disclose confidential information if required to by law.
NEXUS ◗ February 200516
Restricted transactions. Where the vendor is publicly
traded, the confi dentiality agreement will likely prohibit any
negotiations, solicitations or agreements acquiring the secu-
rities of the vendor
or its affi liates
without the approval
of the vendor’s board
of directors. This
allows the directors
to assume control
over the ability of
the bidder to use the information obtained by it to acquire
shares or other securities in the vendor or its affi liates.
Survival of legal obligations. The survival period of
the confi dentiality obligation is a critical component.
Typically these are between 12 months and 24 months.
One purpose of the clause is to protect the successful
bidder who obviously does not want rival bidders to use
and disclose the information obtained through the data
room process, particularly given that the vendor will not
be concerned about disclosure of confi dential information
after closing.
Entire agreement/superseding clause. An additional
provision common to confi dentiality agreements is that no
contract or agreement between the bidder and the vendor
providing for a transaction is deemed to exist unless and
until a defi nitive agreement has been executed and deliv-
ered. It should be noted that this provision may have an
impact on the enforceability of any letter of intent which
the vendor and the purchaser execute and, accordingly, this
may need to be addressed in the letter of intent.
Letters of IntentOnce the vendor has settled on the basic terms of a
proposed transaction with a purchaser, the parties will
likely execute some form of letter of intent which will form
the basis of the formal purchase and sale agreement.
Typically the letter of intent will express the basic terms of
the transaction including:
◗ description of the assets and any specifi cally excluded
assets;
◗ purchase price with an allocation;
◗ effective date; and
◗ special conditions.
It is always a concern whether or not a letter of intent
constitutes a binding agreement and is therefore enforce-
able. Generally speaking there are three possible scenarios:
One. Non-Enforceable. Provided that a letter of intent
is properly drafted with the inclusion of conditions which
prevent the formation of a contract, it is possible to prevent an
agreement from arising. The distinction between a condition
which prevents the formation of a contract and a condition to
an obligation arising under a contract is very important. If it is
the intention of the vendor and purchaser to prevent an agree-
ment of purchase and sale to arise, or to prevent any other
contractual obligations fl owing from the letter of intent, the
parties may wish to include express language which states that
the letter of intent is not intended to be binding and there is
no agreement between the parties until a formal agreement
is executed. There are other less obvious circumstances where
it is possible that an agreement has not been formed such as
where there is a condition requiring negotiation, execution
and delivery of a mutually satisfactory agreement of purchase
and sale (i.e., “an agreement to agree”).
Two. Fully Enforceable. A binding agreement can
come into effect if the essential terms of the contract have
been agreed to and there are no conditions preventing the
formation of the contract. As noted above, the simple exis-
tence of conditions will not necessarily prevent a contract
from coming into effect as such conditions may simply
suspend the obligation to perform under the contract until
such condition is satisfi ed (this is illustrated by the numer-
ous conditions found in binding formal agreements of
purchase and sale). For example, vendor may have agreed
to sell to purchaser subject to purchaser obtaining all
required regulatory approvals. This type of condition does
not prevent the formation of a contract.
17NEXUS ◗ February 2005
Three. Partially Enforceable. It may be that the letter
of intent does not represent an agreement of purchase
and sale (i.e., it is simply an agreement to agree) but does
contain enforceable obligations. Short of a letter of intent
actually forming a contract to sell and to buy between
the vendor and the purchaser, there are a number of
covenants which a purchaser may want a binding commit-
ment from the vendor. For example, letters of intent
almost always provide that the obligation to sell and to
purchase is subject to the execution of a formal agreement
and, therefore, will likely not be binding. However, the
purchaser may want a binding obligation imposed on the
parties to negotiate, execute and deliver the agreement of
purchase and sale in good faith. In addition, the purchaser
will likely wish to obtain an exclusivity or no shop provi-
sion whereby the vendor is prohibited from offering the
assets to third parties until a reasonable negotiation period
has passed. Accordingly, the purchaser may wish to take
care that key provisions of the letter of intent are in fact
enforceable even though no agreement respecting a trans-
action has been reached.
Once the letter of intent has been finalized, the vendor
and the purchaser will proceed to negotiate and execute
the agreement of purchase and sale which, along with
pre-closing, closing and post-closing considerations, will be
discussed in Part 4.
Part 4 – Sale Agreement To Closing
The Asset Purchase and Sale AgreementThe Asset Purchase and Sale Agreement is the means by
which the purchase and sale of assets takes place. It docu-
ments the respective rights and obligations of the parties
to each other, the process by which the assets are to be
sold and transferred and the pre-closing and post-closing
rights, obligations and liabilities of the parties. Typically,
this arrangement is documented in a formal Agreement of
Purchase and Sale (the “Sale Agreement”) which will be
discussed below in fairly broad terms.
Defined Terms. One key element of the Sale Agree-
ment is the defined terms section and specifically those
defined terms which identify the assets to be sold and
purchased thereunder. Too often, vendors and purchasers
rely upon conventional definitions without careful consid-
eration of this issue with the result that the Sale Agreement
fails to adequately address the inclusion or exclusion of
specific assets. This is particularly important in circum-
stances where shallow or deep petroleum and natural gas
rights or facilities are being retained and where there are
assets to be sold which are not directly related to the petro-
leum and natural gas rights or tangibles. For example, the
parties should specifically address whether or not propri-
etary seismic, vehicles and loose equipment and materials
and production sales and transportation contracts form
part of the assets or do not.
Deposits. A typical Sale Agreement will require the
purchaser to deliver a deposit as security for its obligations
thereunder and provide that if the purchaser wrongfully
fails to close, the vendor shall be entitled to retain the
deposit and interest accrued thereon “as a genuine pre-esti-
mate of liquidated damages and not as penalty”.
Some recent Alberta judicial decisions have revisited the
question of the enforceability of such deposit forfeiture
mechanisms in circumstances where a purchaser of assets
has repudiated the Sale Agreement by wrongfully not clos-
ing the transaction. This case law confirms that notwith-
standing such wording, the courts will examine whether or
not the circumstances of the deposit constitute a penalty.
If it is determined to be a penalty, such provision will be
deemed unenforceable and the vendor will be entitled to
collect only the actual proven damages it suffered from the
purchaser’s repudiation. Accordingly, while it is prudent
for a vendor to ensure that such wording is included in
the Sale Agreement, it will not necessarily be definitive of
the issue. Conversely, a purchaser may wish to expressly
provide that it is not liable for any damages over and above
the deposit and wording to this effect should be effective to
prevent any such additional damages.
NEXUS ◗ February 200518
Conditions Precedent. Part 3 of this Article mentions
conditions which prevent the formation of a contract and
conditions to an obligation arising under a contract.
Conditions precedent utilized in a Sale Agreement are condi-
tions to an obligation; the obligation being that of the vendor
to close on the sale of the assets or that of the purchaser to
close on the purchase of the assets. Typically, each party will
attempt to minimize the other party’s conditions thereby
minimizing its risk that either party will abort the transac-
tion. However, this is somewhat limited by the fact that it has
become customary that such conditions largely be reciprocal.
In some cases, distinct from any expressly provided for title
and due diligence mechanisms, the purchaser may be able
to negotiate in conditions in respect of its satisfaction with
material contracts, the condition of tangibles, surface rights,
and environmental damage or contamination.
Due Diligence Mechanisms. In addition to condi-
tions to close, a Sale Agreement will typically contain due
diligence mechanisms with respect to title due diligence (i.e,
due diligence in respect of reserves ownership as discussed in
Part 2) and sometimes environmental due diligence. Rarely
does a Sale Agreement contain mechanisms in respect of
the other due diligence components as discussed in Part 2
(i.e., surface rights, facilities, material contracts and accounts
review and equipment and facility inspections). Accordingly,
should a purchaser require such due diligence, it should
either ensure that it has completed it prior to executing the
Sale Agreement or obtain some means whereby it can ensure
that it is satisfied with such review prior to being obligated
to close. To a certain extent, and subject to my comments
below, the purchaser may be able to obtain comfort in
respect of these matters, in addition to or in lieu of conduct-
ing actual due diligence, by obtaining appropriate represen-
tations and warranties from the vendor.
Representations and Warranties. Representations
and warranties are a means of allocating some of the risk to
the vendor, however, the purchaser should be very cautious
about substituting due diligence on the assets for repre-
sentations and warranties as they will not cover all of the
issues to be addressed by a due diligence review and are of
limited value once closing has occurred in that they merely
give the purchaser a cause of action but no guarantee of
a judgment and successful collection on such judgment.
If utilized properly, they can provide the purchaser with a
useful condition to close in that where its review in respect
of a represented matter indicates that the representation is
materially inaccurate, purchaser can utilize the non-satis-
faction of the condition that the vendor’s representations
be true at closing to terminate closing or threaten such
termination in order to renegotiate the terms of the sale
with the vendor. This will be valuable in circumstances
where the misrepresentation is significant to the transac-
tion and affects the purchaser’s goals and bid factors as
outlined in Part 1. However, this is of limited value given
that purchaser will have made significant expenditures of
time, money and energy and may have press released the
existence of the pending transaction, and accordingly it
will not wish to waste such efforts or incur negative public-
ity by terminating the transaction for anything less than a
significant discrepancy.
Indemnities. The typical practice in Sale Agreements
is for the purchaser to provide the vendor with a broad
indemnity with respect to the assets and anything pertain-
ing thereto from and after the effective date (or alterna-
tively the closing date) of the transaction. In addition, the
purchaser will assume responsibility for and indemnify the
vendor in respect of any and all reclamation and abandon-
ment obligations and any environmental liabilities, regard-
less of whether they existed or accrued before, on or after
the effective (or closing) date. The purchaser indemnity is
typically unlimited by time and in quantum of damages
that could be suffered by the vendor.
There are basically two approaches to vendor indem-
nities. The more common approach today is for the
vendor to only indemnify the purchaser for any liabilities
as a result of the inaccuracy or untruthfulness of any of
its representations and warranties and the purchaser will
provide a reciprocal indemnity for its representations and
19NEXUS ◗ February 2005
warranties. This type of indemnity likely does not give
either vendor or purchaser significantly greater rights or
remedies than it already had at common law by virtue of
a breach of representation and warranty cause of action;
however, depending upon how it is worded, it may have
some benefits in terms of the breadth of remedies or
damages which the indemnified party can seek and as to
whether or not such party may have to prove reliance upon
the inaccurate representation or warranty.
The other approach is for the vendor to indemnify the
purchaser with respect to any liabilities accruing in respect
to the assets prior to the effective date excluding anything
relating to vendor’s title to the assets and excluding liabili-
ties in respect of land reclamation obligations and environ-
mental matters. Conceptually anyway, this is potentially
broader than the indemnity given by the vendor in respect
of the representations and warranties and may provide the
purchaser with some additional recourse against the vendor
in the event that it suffers some loss in respect of a matter
not covered by vendor’s representations and warranties.
In most circumstances, vendor indemnities will
be limited by time (12 month survival), by quantum
(amount not more than purchase price) and by type of
damages (excluding consequential and punitive damages
and business losses). A vendor may seek two additional
means by which to reduce its potential liability for losses
suffered by the purchaser. Firstly, the vendor may attempt
to require a threshold be reached before the purchaser
can make a claim for any losses. Secondly, the vendor
may attempt to make the amount of such threshold a
deductible so it is only liable for amounts of losses over
and above the threshold amount. These matters are often
negotiable and will depend upon the existing transaction
climate (vendor or purchaser favourable) and how signifi-
cant the issue is relative to vendor’s retention value and
purchaser’s price model.
Negotiation of Sale Agreement. What is an effec-
tive and useful Sale Agreement in one transaction will not
necessarily be effective in another transaction given dispari-
ties in material elements of such transactions and the assets
involved. As alluded to in Part 1, obtaining a reasonably
thorough understanding of the assets and elements of the
transaction is extremely valuable to effectively negotiate the
terms of the Sale Agreement. It will assist in assessing the
relative importance of various issues and in ensuring that
vulnerabilities under the Sale Agreement are limited to the
less important elements of the transaction. Accordingly,
a seasoned negotiator will take advantage of his or her
knowledge of the transaction and assets to ensure the Sale
Agreement contains the provisions necessary to achieve
his or her side’s key goals while sacrificing position on less
relevant terms.
Pre-Closing, Closing and Post-Closing ConsiderationsPre-Closing Consents and Approvals. There are a
number of pre-closing governmental or quasi-governmen-
tal approvals the parties may be required or otherwise wish
to obtain prior to closing, including:
◗ Competition Act (Canada): Required for notifiable
transactions which is based upon (i) size of the
parties (the parties and their affiliates have combined
Canadian assets or combined gross annual revenues
from sales greater than $400 million) and (ii) size
of the transaction (the aggregate value of Canadian
assets being acquired or gross annual revenue from
sales therefrom is greater than $50 million).
◗ Investment Canada Act (Canada): A transaction is
reviewable or notifiable that involves the acquisition
of control of a Canadian business by a “non-Cana-
dian” if it is a “direct acquisition” (i.e., acquisition of
all or substantially all of the assets or majority of the
shares of an entity carrying on business in Canada)
where the value of such assets are equal to or greater
than $237 million (assuming purchaser is a defined
World Trade Organization investor).
NEXUS ◗ February 200520
◗ AEUB (LLR) Well License Transfer (Alberta):
In some circumstances, the parties may wish to cause
the transfer of well licenses from the vendor to the
purchaser prior to closing to ensure such issue is
addressed to each party’s satisfaction prior to clos-
ing. Satisfactory arrangements will likely be required
to address concerns regarding how such transfer is
reversed if closing does not occur.
In addition to the foregoing approvals and consents and
any applicable rights of first refusal, the parties may wish
to attempt to obtain third party consents to the proposed
assignment of material contracts. Typically, consents in
respect of standard industry agreements are not obtained
until after closing; however, certain particularly material
contracts and certain circumstances may warrant address-
ing this consent issue in advance of closing.
Interim Operations. Sale Agreements typically have
provisions which address how the vendor is to maintain the
assets from the execution of the Sale Agreement until clos-
ing. The parties will need to consider how much discretion
and influence each has with respect to:
◗ notices, operations and approval of operations
including associated expenditures and expenditure
limits;
◗ rights of first refusals that accrue to the vendor
during such period;
◗ emergency situations; and
◗ contract continuation, renewal amendment and
termination.
Post-Closing Transition. Similar to the above, vendor
will typically be required to provide agency services until
such time as the purchaser is properly novated into the
title documents and accordingly hold such assets as trustee
for the purchaser. Typically, purchaser will provide vendor
with an indemnity for acting in such capacity and, in turn,
vendor will carry out the lawful instructions of the purchaser.
In some cases, vendor may provide additional accounting,
administrative and operational services and these services may
be provided for an additional fee to be paid by the purchaser
for a specified period of time beyond closing.
Specific Conveyances. Typically it is vendor’s respon-
sibility to prepare all specific conveyances and, in an ideal
situation, table such conveyances to purchaser for execu-
tion and delivery at closing. In very large transactions
where numerous specific conveyances are required, this is
not always practically possible and, accordingly, convey-
ances are sometimes prepared and delivered post-closing.
Typically, registration and circulation of such convey-
ances is for the account of purchaser and it is a matter of
negotiation between vendor and purchaser as to which
party will be responsible to carry out such registration and
circulation. Vendors often wish to control all or part of this
process to ensure that it is completed in a timely fashion.
In part, this will depend upon the respective abilities of
vendor and purchaser to complete such matters.
Craig Spurn
©2004 Blake, Cassels & Graydon LLP
This four-part article on the anatomy of an oil and gas deal appeared earlier this year in consecutive editions of the Canadian Association of Petroleum Landmen’s publication, The Negotiator. Thank you to Craig Spurn and Lynn Spencer for providing permission to re-print.
21NEXUS ◗ February 2005
Upcoming CAPLA CoursesFor Course Registration visit www.caplacanada.org.
Engendering Success: Bridging the Gender Gap in Communication
Course Date(s) Registration Deadline
March 08, 2005 February 26, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
08:30 am – 04:30 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$315.65 ($295.00 + $20.65 GST) $401.25 ($375.00 + $26.25 GST)
DescriptionWhen it comes to land administration, the effective
communication with clients is of primary and utmost
importance. Scientific research has demonstrated that
miscommunication is more likely to occur when the client
is of the opposite gender due to fundamental differences
in thinking and conversational styles of men and women.
This course will give you strategies and techniques on how
to communicate better with the other gender in work and
everyday life. Understanding gender differences between
men and women can lead to better communication,
creativity and harmonious relationships. In this seminar,
you will:
◗ Explore the latest scientific research on brain differ-
ences between men and women and the ramifica-
tions of these differences on perceptions, priorities
and behaviours.
◗ Examine the critical differences between men and
women in thinking, problem solving, decision-
making, conflict resolution and communication styles.
◗ Identify your own “brain software” preference, its
benefits and challenges and what you can do to
upgrade it.
◗ Learn how to overcome common sources of misun-
derstandings, promote harmony and gain influence.
◗ Evaluate your own skills in reading body language.
◗ Expand your own repertoire of body language skills,
especially those unique to the opposite gender.
Target AudienceIndividuals wishing to improve their communication skills,
especially with those of the opposite gender. This seminar
also gives you valuable insights into how to gain rapport
and create harmonious relationships not only in work, but
also in your everyday life.
InstructorDr. Sonia Herasymowych is principal of Self Energetics,
a consulting firm that assists organizations and teams in
developing high performance by incorporating diverse
ways of thinking. Her academic qualifications include
receiving a BA Honours in Chemistry and MSc in Physical
Chemistry and a PhD in Biochemistry. She is a certified
practitioner in Myers-Briggs Type Indicator (MBTI)(r) and
the Herrmann Brain Dominance Instrument (HBDI)(r).
In addition to her private practice, she is an associate of
MHA Institute Inc., Calgary. She is noted for her dynamic
presentations on the use of science in everyday life.
Resolving ConflictCourse Date(s) Registration Deadline
March 15, 2005 March 5, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
08:30 am – 04:30 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$267.50 ($250.00 + $17.50 GST) $347.75 ($325.00 + $22.75 GST)
NEXUS ◗ February 200522
DescriptionThis one-day workshop deals with the causes and effects
of interpersonal conflict, with particular emphasis on
the dynamics of conflict, conflict resolution styles and
the cycle of conflict. Participants begin by examining
how they currently handle interpersonal conflict, learn a
model for collaborative communication and then through
case studies and role-playing, consider a broad range of
skills, approaches and techniques useful in solving inter-
personal disputes.
Target AudienceSenior, Intermediate and Junior personnel interested in
improving their skills at managing conflict to achieve posi-
tive outcomes.
Instructor(s)Alberta Arbitration & Mediation Society – Barbara McNeil,
B.Sc. M.A. C.R.C. (Justice Institute)
Barbara is a Chartered Mediator and Trainer in conflict
resolution, mediation and communication skills with
experience in commercial, contract, estate, organizational,
community and police issues.
Administration of EUB Guide 56Course Date(s) Registration Deadline
April 20, 2005 April 10, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
08:30 am – 12:00 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$133.75 ($125.00 + $8.75 GST) $219.35 ($205.00 + $14.35 GST)
DescriptionThis half-day course provides an understanding of EUB
Guides 56 and 60 and how they affect various aspects of
surface land acquisition from an administrative perspective.
Target AudienceSurface Land Administrators or others who require an
understanding of the administration process pertaining to
EUB G56 regulations.
InstructorsR.G. (Bob) Leitch – Antelope Land Services Ltd.
Bob has experience in contract drilling in Alberta, oilfield
servicing in Northern British Columbia and agricultural
experiences obtained from farming operations in South-
ern Alberta. Bob studied Economics at the University of
British Columbia and joined Antelope Land Services in
1985. His land experience includes Surface and Mineral
Right’s acquisitions in Alberta, Saskatchewan and British
Columbia; Alberta Surface Rights Board & AEUB Hear-
ing preparation and attendance; AEUB Guides 56 & 60
compliance; and extensive experience with Sustainable
Resource Development Applications. He currently works
with and is a partner of Antelope Land Services Ltd.
Calgary/Canmore Course & Field TripCourse Date(s) Registration Deadline
May 05, 2005 April 25, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Heritage Park Overflow ParkingSW Corner of Heritage Drive and 14 Street SW
07:45 am – 09:00 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$444.05 ($415.00 + $29.05 GST) $444.05 ($415.00 + $29.05 GST)
What to BringSouthern Alberta’s weather can be beautiful, and, in a
matter of hours, it can get ugly. Bring a hat, sunglasses,
sunscreen and a daypack complete with some warm
weather clothing, wind jacket and rain gear. Remember
your camera and/or camcorder.
23NEXUS ◗ February 2005
Bad Weather NoteIf weather is too disagreeable you will be contacted the evening
before if the date is to change (please provide your home or
cellular telephone number on your registration form).
DescriptionThe course/field trip begins in Calgary, proceeds to Turner
Valley, passes through the foothills and ends in Canmore
prior to returning to Calgary. En route, participants learn
the basics about exploration/exploitation geology, geophys-
ics and engineering – how oil and gas reserves are found,
extracted and marketed – as well as gaining insight into the
history of the petroleum industry and the impact changing
technology has had throughout the years. From outcrop to
discovery well site, from oil pool to sour gas pool, partici-
pants are taken to some of the very spots that changed
Alberta’s history. By days end, participants will understand
the basics of rock and reservoir types, seals, traps, explora-
tion/drilling methodologies, processing, transportation and
play economics. Aside from the technical and economi-
cal aspects of the industry, participants will also gain a
comprehensive insight into the historical and present day
economic importance of the oil and gas industry within
the economy of Alberta and Canada. Tours depart from
Calgary at 8:00 am and return at 9:00 pm.
Target AudienceThis one day course/field trip is designed for:
1. oil company non technical staff (legal, land,
accounting, support personnel) and less experi-
enced technical individuals,
2. oil industry support companies (legal, service
sector, etc.) and
3. any group interested in learning about the oil
industry in Alberta.
Instructor(s)Alberta Geo History Tours Inc. provides a Professional
Geologist to guide participants through this field trip.
Notice of Assignment – NoviceCourse Date(s) Registration Deadline
May 10, 2005 April 30, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
08:30 am – 12:00 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$160.50 ($150.00 + $10.50 GST) $240.75 ($225.00 + $15.75 GST)
DescriptionTopics covered include the history of, and review of, the
Industry Agreement, the Assignment Procedure, Amend-
ing Agreement and the Notice of Assignment. Attendees
will be provided with some specific work related exercises
which will provide a hands-on approach to the use of the
Notice of Assignment. A comprehensive binder will be
provided for each participant.
Target AudienceRecommended for individuals who are new to the Notice
of Assignment procedure and would like to gain an under-
standing of the assignment process.
Instructor(s)Curt Hamrell – Land Consultant
Curt has been working within the Oil and Gas Indus-
try since 1981. He has a Petroleum Land Management
Degree. His 20 plus years of Land experience includes
Land Administration Contracts, A&D, Mineral Leases,
Mineral Negotiations and maintenance of various Land
Systems. Curt is currently consulting at Canadian Natural
Resources and has been a CAPLA Education Commit-
tee Volunteer since April 2002. He supports the CAPLA
Education DACUM Process, 5 year Education Plan and
Curriculum Development Program. Curt is also affiliated
with CAPL, as an active member he also has volunteered
on the CAPL Membership Committee.
NEXUS ◗ February 200524
Notice of Assignment – AdvancedCourse Date(s) Registration Deadline
May 10, 2005 April 30, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
01:00 pm – 04:30 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
DescriptionAn overview of the assignment process will be presented
followed by various NOA related exercises. This will
provide the user with hands-on experience and ensure the
correct application of the assignment process. A compre-
hensive binder will be provided for each participant.
Target AudienceRecommended for individuals who have worked with
the Notice of Assignment, have an understanding of the
assignment process, wish to further their knowledge and/or
individuals who have taken the Notice of Assignment
Novice course.
Instructor(s)Curt Hamrell – Land Consultant
Curt has been working within the Oil and Gas Indus-
try since 1981. He has a Petroleum Land Management
Degree. His 20 plus years of Land experience includes
Land Administration Contracts, A&D, Mineral Leases,
Mineral Negotiations and maintenance of various Land
Systems. Curt is currently consulting at Canadian Natural
Resources and has been a CAPLA Education Commit-
tee Volunteer since April 2002. He supports the CAPLA
Education DACUM Process, 5 year Education Plan and
Curriculum Development Program. Curt is also affiliated
with CAPL, as an active member he also has volunteered
on the CAPL Membership Committee.
Third Party Surface AgreementsCourse Date(s) Registration Deadline
May 11, 2005 May 1, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
08:30 am – 04:30 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$187.25 ($175.00 + $12.25 GST) $272.85 ($255.00 + $17.85 GST)
What to BringParticipants are encouraged to bring their own samples and
questions, which will be discussed if time permits.
DescriptionTopics covered will include an overview of the various
types of agreements in use, the legislation governing them
as well as a practical hands-on workshop on how to use
these agreements. Additional topics include an overview of
standard requests and how to process such requests.
The course will also discuss the use of CAPLA’s Master
Road Use Agreement.
Target AudienceIndividuals who deal directly with Third Party Surface
Agreements, requests for Third Party Surface Agreements
and Crossing Agreements.
Instructor(s)Dave Grzyb – Senior Technologist
Dave has over 15 years experience working in various facets
of the Resource Industry, and has worked in the Produc-
tion Operations Group of the Energy and Utilities Board
for three years. Dave is involved with issues arising from
pipeline work, such as materials specification, hydrostatic
testing, corrosion and integrity assessment, crossing agree-
ments of orphaned pipelines, and landowner queries.
25NEXUS ◗ February 2005
Karen Riep – D.R. Hurl & Associates
Karen has over 20 years of Administration and Agent expe-
rience in all aspects of surface land, from rights acquisition
through to abandonment and reclamation. She has previ-
ously owned and operated two surface land companies
and, as Surface Land Coordinator, currently oversees the
daily operations of the surface land department at Comp-
ton Petroleum Corporation. Karen holds a Land Agents
Licence and is active in several industry associations, past
Chairman of the Field Management Committee for CAPL
as well as involvement in the Alberta Association of Surface
land Agents and CAPLA.
Reading Survey Plans WorkshopCourse Date(s) Registration Deadline
May 25, 2005 May 15, 2005 @ 04:30pm
Location & Lunch Duration & Check-in Time
Rotary House located at the North end of the Big Four Building Stampede Grounds – Victoria Park/Stampede LRT Station or Parking $7.00
09:00 am – 05:00 pmCheck-in begins 1/2 hour prior to start
Member Fee Non-Member Fee
$240.75 ($225.00 + $15.75 GST) Complimentary
This is a CAPLA Members Only course.
What to BringAttendees will tour a completed wellsite (not drilling). Please
dress appropriately for weather conditions ensuring warm
clothing and hiking boots or similar footwear is worn.
DescriptionThe in-class portion of this course will provide the
information required to read and interpret survey plans
correctly to ensure all required consents and agreements are
identified. The field trip will enable attendees to gain valu-
able field experience and bring the survey plan to “life”.
Target AudienceJunior to Intermediate Surface Land Personnel and Interim
Land Agents.
Instructor(s)Mark A. Selander – McElhanney Surveys, Edmonton AB
Mark has over 23 years experience as a Surveyor in the
oil and gas industry. His assignments have taken him all
over the world, both on land and the high seas. He was
commissioned as an Alberta Land Surveyor in 1988 and
presently lives and works out of Edmonton, Alberta.
e-Tenure UpdatePhase One of the e-Tenure initiative, e-Transfers,
was implemented on March 31, 2004 and became
mandatory on January 1, 2005.
Phase Two, entitled e-Postings, will be imple-
mented on March 30, 2005.
◗ Volunteer companies took part in a Pilot Project
for the January 5-18, 2005 posting request
acceptance period.
◗ Overview and hands-on training will take place
during February and March 2005. Please refer
to the website (www.caplacanada.org) under the
heading “Announcements” for more information
about training sessions.
◗ e-Postings is mandatory, so faxed or mailed
posting request forms received on or after March
30, 2005 will be returned to the submitting
company.
Phase Three is e-Bidding and is scheduled for
implementation in March 2006. The e-Bidding
working group will begin planning and develop-
ment in April 2005. Please contact Brenda Allbright
(Brenda.Allbright@gov.ab.ca) or Retha Purkis
(Retha.purkis@gov.ab.ca) if you would like to be a
part of this group.
NEXUS ◗ February 200526
GROUP BENEFITS REMINDER
EVERYONE BENEFITS!
CAPLA has arranged for its
members to be eligible to
belong to a comprehensive
benefits program, including:
Group Life
Dependant Life
Accidental Death & Dismemberment
Long & Short Term Disability
Extended Healthcare
(Major Medical & Prescription Drugs)
Vision Care
Dental
Health Spending Account
These benefits are available to you as a CAPLA Member, and in addition to the benefits listed
above, CAPLA members can feel free to contact Dann Kepford for quotations for personal/
corporate life insurance, disability and critical illness quotations. Dann is a broker and can
obtain quotes for the entire insurance market.
Please contact: Dann Kepford @ (403) 264-6690
GroupInsurance Program
AUTO – HOME – COMMERCIALVACATION AND REVENUE
PROPERTIES
LOW PREMIUMSSUPERIOR COVERAGE
Authorized Brokers for CAPLA Members
Contact:Kathy Findlay or Dianna Suttie
Phone 403-255-2876
www.fma-ins.com
Email: Kathy@fma-ins.comEmail: Dianna@fma-ins.com
100, 6001 – 1 A Street SWCalgary, Alberta T2H 0G5
27NEXUS ◗ February 2005
CAPLA Management/Supervisor Roundtable
The fi rst forum for Land Administration managers
and supervisors was held on the morning of
December 7, 2004 in a Roundtable format.
Petro-Canada was pleased to provide a Conference Room
at Petro-Canada Centre for this session. Invitations were
sent to all CAPLA members who have their discipline in
the CAPLA Roster indicated as Management/Supervisory.
There were 41 members from various sized companies in
attendance. Thank-you to Karen Behar, Human Resources,
from Husky Oil Operations Limited for volunteering her
time as the session facilitator and the following Roundtable
facilitators who navigated the discussion on the topics at
each table:
Jim Wickens Husky Oil Operations Limited
Linda Bernier EnCana Corporation (and CAPLA
Advisory Council member)
Brenda Allbright Alberta Energy (and CAPLA Advi-
sory Council member)
Bonnie-Lynn McLaren Canadian Natural Resources
Limited (and CAPLA Advisory
Council member)
Lisa Regan Burlington Resources Canada Ltd.
Jonathan Chapman Legacy Land and Title Ltd. (and
CAPLA Advisory Council member)
Curt Hamrell Hamrell Consulting Ltd.
This session focused on Human Resource Manage-
ment with the main topics being Recruitment, Train-
ing and Retention and to confi rm some issues that have
been identifi ed during Education planning. The keynote
speaker, Rick Davidson from Human Resources at EnCana
Corporation, set the tone for the morning with a presenta-
tion on the issues, challenges and trends faced by compa-
nies attracting, developing and retaining employees.
The 41 participants were placed into seven groups.
These groups were determined by individual years of
experience in land, size of company and land discipline.
This was done to help ensure a reasonable cross section of
industry was represented within each group.
The groups tackled the topics of Recruitment and Train-
ing by identifying challenges and then determining potential
best practices. Retention was approached from a non-fi nan-
cial perspective and the groups shared their best practices.
NEXUS ◗ February 200528
A common Recruitment challenge identified was
hiring the right person for the job. This would encom-
pass an individual who would thrive in the corporate
culture and possess the appropriate blend of technical and
non-technical skills. A few suggested best practices were
ensuring the interview had a balance of technical and non-
technical questions to draw out the candidates experiences,
conducting team interviews and promoting from within.
A common Training challenge identified was a lack
of time and resources needed to conduct a comprehensive
training program. There was also discussion concern-
ing the current education courses available and if these
courses were meeting the needs of industry. Some of the
suggested best practices were using individuals within the
organization that can act as a mentor, ensuring procedures
are current and readily accessible, working with educa-
tional institutes to influence curriculum development and
conducting internal lunch and learn sessions.
Some of the Retention best practices that were shared
by the group included providing timely and consistent
feedback, recognizing individual accomplishments, main-
taining communication and supporting a collaborative
work environment.
This was an excellent forum for Land Administration
managers and supervisors to bring forward their issues,
observations and challenges, as well as presenting some
best practices. It was also a great opportunity to meet
peers and confirm that they are all sharing similar issues
and concerns. Significant interest and positive feedback
was received for future sessions on a bi-annual basis with
a CAPLA Management/Supervisory Conference to be
held late Spring 2005. Please ensure that your discipline
is updated in the CAPLA Roster to indicate Manage-
ment/Supervisory so that you are not missed on invita-
tions for future sessions.
Submitted by the CAPLA Management/Supervisory
Roundtable Committee: Rhonda Aiello, Jim Wickens,
Lisa Regan and Verna Moodie
Upcoming CAPL CoursesFor registration or more information on these or any other CAPL seminar, please contact the CAPL office at 237-6635, fax 263-1620 or e-mail dgrieve@landman.ca. Visit our website www.landman.ca for the full calendar of seminars
Alberta Limitations ActFebruary 22, 2005 8:30 a.m. to 12:00 p.m.
This seminar is suitable for personnel in all aspects of
the oil and gas business looking for a better understand-
ing of the Limitations Act.
Fee: CAPL Member $175.00 plus GST
Non-Member $225.00 plus GST
Economic Considerations For Land DealsFebruary 23 & 24, 2005 8:30 a.m. to 4:30 p.m.
This seminar is intended for Senior Landmen and
individuals involved in conducting project economic
evaluations. The emphasis is on the use of economics to
assist in the structuring and evaluating of land deals.
Fee: CAPL Member $450.00 plus GST
Non-Member $550.00 plus GST
Drilling And Production OperationsFeb. 28 & Mar. 1, 2005 1:30 p.m. to 4:30 p.m.
This seminar will give a non-technical overview of
oilfield operations in Western Canada. The major
topics of drilling, well completion, and production
operations will be covered.
29NEXUS ◗ February 2005
Fee: CAPL Member $450.00 plus GST
Non-Member $550.00 plus GST
Freehold Mineral LeaseMarch 3, 2005 8:30 a.m. to 4:30 p.m.
This seminar is intended for industry personnel who
require a detailed knowledge of freehold mineral rights.
Fee: CAPL Member $350.00 plus GST
Non-Member $400.00 plus GST
Selected Developments In Oil & Gas LawMar. 4, 11 & 18, 2005 8:30 a.m. to 12:00 p.m.
The seminar 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.
Fee: CAPL Member $550.00 plus GST
Non-member $650.00 plus GST
Understanding Oil & Gas Startups – Part IIMarch 8, 2005 8:30 a.m. to 4:30 p.m.
This seminar is targeted for more senior personnel of
all disciplines within the industry that have an entre-
preneurial spirit.
Fee: CAPL Member $350.00 plus GST
Non-Member $400.00 plus GST
ROFR Law – Overview In Practical IssuesMarch 10, 2005 8:30 a.m. to 12:00 p.m.
This seminar is suitable for the “go to” people in their
organizations for ROFR issues.
Fee: CAPL Member $175.00 plus GST
Non-Member $225.00 plus GST
EthicsMarch 22, 2005 1:00 p.m. to 4:30 p.m.
All interested land personnel, P.Land holders who require
re-certification and all prospective new CAPL members.
Fee: CAPL Member $175.00 plus GST
Non-Member $225.00 plus GST
A Practical Guide To Title ReviewMarch 24, 2005 8:30 a.m. to 4:30 p.m.
This seminar is intended for landmen and other indus-
try personnel who are responsible for conducting due
diligence reviews and rectifying title deficiencies when
acquiring assets.
Fee: CAPL Member $350.00 plus GST
Non-Member $400.00 plus GST
Conventional Exploration AgreementsMarch 31, 2005 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 conventional exploration agreements.
Fee: CAPL Member $350.00 plus GST
Non-Member $400.00 plus GST
Don’t Miss These Upcoming Courses:CAPL Operating Procedure – Apr. 13&14, 2005
Fundamentals of Oil & Gas Law – Apr. 25&26, 2005
NEXUS ◗ February 200530
For details and registration information please visit the Events Page on the CAPLA web site at www.caplacanada.org.
Events CommitteeCommittee Members
Joanna Pelletier – Director
Mark Flaherty Jenna Scott Katerina Gilbert Bev Curley
Shelley McInnis Debra Wade Shannon Facey Shyanne Woroniuk
The Events Committee is responsible for organizing Breakfast, Lunch and Dinner Meetings. Our committee also
plans quality-networking opportunities through social functions in an enjoyable and fun environment.
Membership feedback is welcome and encouraged;
suggestions and comments from our members assist us in the planning of CAPLA events.
Some examples of feedback are:
• Types of topics addressed at the meetings
• Speakers you are interested in hearing from
• Types of events
• Feedback/suggestions on current events or meetings
We encourage you to contact anyone on the Events Committee with feedback or questions. The names are listed
above and their contact information can be found on the CAPLA website at www.caplacanada.org.
JANUARY
Lunch Meeting
FEBRUARY
Breakfast Meeting
MARCH
Dinner Meeting – AGM
CAPLA/IRWA Ski trip
APRIL
Breakfast Meeting
Golf Clinic Starts
MAY
Dinner Meeting
(Management Night)
Monda y Night
Golf League Begins
JUNE
CAPLA/CAPL Family Day
at the Calgary Zoo
CAPLA Golf Tournament
CAPLA/CAPL Pre-stampede Party
JULY
No scheduled Events
AUGUST
Monday Night Golf League Ends
SEPTEMBER
CAPLA/IRWA Wine Tasting
Dinner Meeting
OCTOBER
No scheduled Events
NOVEMBER
Dinner Meeting
DECEMBER
CAPLA Christmas Cheer
Upcoming Events For 2005
31NEXUS ◗ February 2005
Saskatchewan Land Registry– Online Submission Tool
Conducting some Land Titles transactions in Saskatch-
ewan will soon become easier and faster with less
chance of error. Information Services Corporation
of Saskatchewan (ISC), the Crown Corporation responsible
for Saskatchewan’s Land Registry, is creating a method for
customers to submit transaction information online that will
provide real-time validation of data.
With an objective to greatly increase the accuracy of
information that enters the LAND System, ISC will be
creating an Online Submission tool as an alternative to
the current packet submission methods that will result in
decreased rejections, faster packet preparation time and is
expected to improve
processing times.
“This project is
the most signifi cant
initiative currently
underway at ISC,” says
Mark MacLeod, ISC
President and CEO.
“We’ve done extensive
work around opportu-
nities to improve our business processes and as a result, the
Online Submission Project has been implemented to have
a considerable positive impact on both customers of ISC
and the corporation itself.”
ISC will be implementing Online Submission (OLS) in a
phased approach, with the fi rst phase slated for implementa-
tion by summer of 2005 and focusing on the most common
transactions in the LAND System: transfers, interest registra-
tion and discharges and transforms. Phase two, slated to begin
later in 2005, will include interest assignment and amend-
ment capabilities among other transactions.
OLS will support easing the process of large volume
transactions, including an easy process for multiple title
setups, capacity to assign digital copies of authorizations
and attachments across multiple packets and applications
within the system, as well as the ability to create templates for
NEXUS ◗ February 200532
common transactions to prevent
rework during preparation.
The new application
includes a management system
of all packets in draft, pending,
registered and rejected status.
If rejected, users will have the
ability to simply make correc-
tions to a copy of the rejected
packet and submit it again
online under a new packet
number. OLS also brings value
by identifying errors in specifi c
fi elds through validation with
the LAND database throughout
the packet creation process to
prevent potential errors and rejections.
To ensure business and functional requirements of
customers are met, including those of the oil and gas industry,
a customer advisory team has been working closely with ISC
throughout the development of the application. Husky Energy
provided industry input to the team, which was made up of
representatives from various stakeholders, with the services of
Jonathan Chapman of Legacy Land and Title Company Inc.
“It is obvious that ISC is committed to making
this tool work for users of the system,” said Chapman.
“Industry will see further value from OLS in the next
phase of implementation, and I compliment ISC in their
efforts to ensure this tool meets customer needs and is
easy to use.”
The launch and implementation of the new Online
Submission tool is an initiative that has received detailed
attention. “Although using OLS is not mandatory and is
not a signifi cant change in current concepts,” said Kim
Coppola, ISC Customer Relationship Manager, “ISC will
be very diligent in ensuring that we can help users prepare
their work environments for OLS to ensure that our
stakeholders are able to use the tool to complete their work
faster and more accurately.”
“In the coming months,
we will communicate through
various channels the recommen-
dations and requirements for
work environments to use the
OLS, such as the requirement
of high-speed internet access as
well as the recommendation to
scan authorizations and attach-
ments to realize the full poten-
tial of the system.” ISC will also
make training available to users
by providing self-guided and
classroom training in Calgary
sometime in the spring.
ISC is looking to fully real-
ize the advantages of an online Land Titles system and the
new Online Submission tool will allow land administrators
and all users of the system to complete their transactions
faster, easier and more accurately.
Be sure to visit ISC.ca in the months to come to
receive updates and details regarding the launch of OLS or
sign up to receive E-Mail Notifi cations for the latest infor-
mation on this initiative.
Jason Fiske
Marketing/Communications Consultant
Information Services Corporation of Saskatchewan
Speaker NotesLuncheon Meeting of January 24, 2005Please see the CAPLA website for Kim Coppola’s excellent
presentation on “What ISC is Doing to Address the Needs of
the Oil and Gas Sector.”
ISC will be implementing
Online Submission (OLS) in
a phased approach, with
the fi rst phase slated for
implementation by summer
of 2005 and focusing on the
most common transactions
in the LAND System
33NEXUS ◗ February 2005
Asset Management Education Initiative
CAPLA has been the initial sponsor of a new Asset
Management education initiative that began
with the presentation of a CAPLA 5 Year Educa-
tion Plan to the CAPLA Board of Directors. Upon the
recommendation of the board, a steering committee was
formed to facilitate the kick-off and implementation of
the initiative. Phase 1 was completed in December and it
included a high level strategic plan with vision and mission
statements, objectives, goals, action plans and an informa-
tion brochure. A presentation was given at the CAPLA
Manager/Supervisor Roundtable held on December 7th
and it was very well received.
CAPLA fully funded Phase 1, however, the steering
committee is looking for funding to begin and complete
Phase 2 of the initiative. Phase 2 will include the devel-
opment of bylaws, governance structure, business plan,
budgets, marketing, communication and fundraising plans.
Phase 3 will include presenting the initiative to senior
management within the industry and seeking their support
and funding of the development of asset management
learning modules.
For further information please click the following link
to view an information brochure.
◗ http://www.caplacanada.org/bb_asset_management.php
If your company would be interested in providing funds
for Phase 2, or if you have further questions, please contact
Gale Breen at (403) 651-1760 or gbreen@mhcs.net.
Vision Statement“To be recognized as the centre of excellence in support
of Asset Management skills development for the energy
industry”
Mission StatementA non-profi t and independent society infl uencing and
motivating Asset Management skills development for the
energy industry by:
◗ Developing potential learning strategies and career
paths for Asset Management personnel
◗ Developing and maintaining the currency of learn-
ing modules and associated materials
◗ Providing learning modules and associated materi-
als to various education providers
◗ Establishing standards for instruction for the
learning modules
CAPLA information at a glance
UPCOMING EVENTS:March 4th
CAPLA/IRWA Ski Trip
March 17thNEXUS Deadline for the April Issue
March 23rdCharity Night at the Food Bank
March 30the-Postings are Mandatory
February Breakfast MeetingDate:
February 28, 2005
Registration Deadline:February 21, 2005
Location:Calgary Petroleum Club
Time:7:30 am to 8:45 am
Event Cost:$20.00
Registration:Visit the CAPLA website at
www.caplacanada.orgfor registration and event details.
Annual General MeetingDate:
March 22, 2005
Registration Deadline:March 15, 2005
Location:Calgary Petroleum Club
Time:4:30 pm to 8:00 pm
Event Cost:$30.00 members $35.00 non-members
Registration:Visit the CAPLA website at
www.caplacanada.orgfor registration and event details.
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