Growth, Enterprise and Trade
THE OIL AND GAS ACT
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Regulations |
PART 2
Well and Battery Names
Drilling and Production Regulation Table of Contents
2 Section 2 is repealed
3(1) In naming a well or battery, the director may include such identifying information as he or she considers necessary or advisable.
3(2) The well or battery name set out by the director in a well licence or battery operating permit is the name by which the well or battery is to be known and referred to for all purposes under the Act.
4(1) Where the director changes the name of a well under subsection 99(1) of the Act, the director shall give the licensee written notice of the new name.
4(2) An application under subsection 99(1) of the Act by a licensee to change the name of the well may be made to the director and must include:
(a) the application fee set out in Schedule A;
(b) the new name proposed by the licensee; and
(c) if the proposed name change is the result of a reorganization of a corporation or partnership, a copy of the certificate of amalgamation, certificate of amendment or other documentation confirming the change in name of the corporation or partnership.
5(1) Within six weeks after the finished drilling date or after a date on which the well licence is transferred under section 8, the licensee shall post at the wellsite a sign that:
(a) sets out the location of the well and the name of the licensee in letters and numbers not less than 3 cm in height;
(b) is visible from the entrance to the wellsite from the access road; and
(c) if the well is a horizontal well, includes the surface location of the well and the location of the end of each lateral drilled in the well.
5(2) Notwithstanding subsection (1), an inspector may require an additional well sign to be posted in a conspicuous place at the entrance of the access road to the wellsite.
5(3) A permittee shall post in a prominent place at the entrance of the access road to the battery site, a sign that sets out in letters and numbers not less than 5 cm in height:
(a) the location of the battery;
(b) the name of the permittee; and
(c) the telephone number of the permittee or the operator of the battery.
5(4) A licensee or permittee who is required under this section to post a sign shall maintain the sign in good condition until the well or battery is abandoned.
PART 3
Well Licence
Drilling and Production Regulation Table of Contents
6(1) An application under section 90 of the Act for a well licence must be submitted to the director on the form provided by the branch and must include the following:
(a) the application fee and levy set out in Schedule A;
(b) an original copy of a survey plan, acceptable to the director, of the area surrounding the proposed well;
(c) a copy of documentation to support the applicant’s right to the oil and gas in the spacing unit, including:
(i) where the oil and gas rights are not owned by the Crown, an executed lease of the oil and gas rights; or
(ii) where the applicant owns the oil and gas rights, a copy of the certificate of title;
(d) a copy of an executed surface lease or an order under The Surface Rights Act that provides the applicant with access to the wellsite;
(e) two copies of the proposed drilling program, including:
(i) a prognosis of formation tops;
(ii) details of the logging program;
(iii) anticipated core and drill stem test intervals; and
(iv) details of casing and cementing operations.
(f) the performance deposit required under section 10; and
(g) any other information the director may require.
6(2) Where, in the opinion of the director, the location of the proposed well or any related oil and gas facility is in an environmentally sensitive area, the director may require the applicant to submit a plan to prevent or minimize any impact of the well or facility on the area.
6(3) An applicant proposing to drill a horizontal well shall provide the director with the following:
(a) an indication, on the plan required under clause (1)(b), of the bottom hole location of the well and the boundaries of all spacing units that are in the proposed drainage unit for the well;
(b) a diagram that shows the proposed profile of the well;
(c) a copy of any agreement that allocates the production of any oil and gas from the horizontal well among all owners in the proposed drainage unit.
6(4) An application for a well licence for a test hole or for the re-entry of a well that is abandoned must be made in accordance with subsection (1), unless the director specifies otherwise.
Change in ownership of well7 A licensee shall give the registrar written notice of a change in ownership of the well within 15 days after the day of the change in ownership.
8 An application under subsection 100(1) of the Act for approval to transfer a well licence must be made to the registrar and must include the following:
(a) an agreement in the form set out in Schedule B;
(b) the application fee and levy set out in Schedule A;
(c) documentation to support the transferee’s right to the oil and gas in the spacing unit;
(d) documentation to support the transferee’s right to enter the wellsite;
(e) the performance deposit required under section 10;
(f) a list of batteries and flow lines that the transferee would acquire as a result of the transfer of the well licence;
(g) any other information that the registrar or director may require.
Restrictions on locating a well
9(1) Subject to this section, no person shall drill a well at a distance from a surface improvement or feature that is less than is set out in Schedule C unless the director, on application by the licensee,
(a) is satisfied that special circumstances exist that justify drilling the well at a lesser distance; and
(b) provides the licensee with written approval to drill at a specified lesser distance.
9(2) The director may approve an application made under subsection (1) subject to any term or condition that he or she considers necessary or advisable.
9(3) Where an application to the director under subsection (1) relates to the distance from a road allowance, the director:
(a) shall not give an approval under this section without prior written approval of the Department of Highways and Transportation or the municipality; and
(b) shall make any approval subject to any term or condition that is set out in the written approval from the Department or municipality.
9(3.1) No person shall drill a well within 50 m of the boundary of a spacing unit unless:
(a) the spacing unit and the adjacent spacing unit are owned by the same person; or
(b) the owner of the adjacent spacing unit consents to the drilling of the well.
9(4) The director may approve an application to drill a well within one km of a subsurface mine subject to such terms and conditions as the director, after consulting with the Director of Mines under The Mines and Minerals Act, considers necessary or advisable.
9(5) The director may establish special requirments for drilling, completion or abandonment of a well that is drilled below the top of the Prairie Formation in an area where the Prairie Formation may contain salt.
10(1) A performance deposit required under this regulation is payable to the Minister of Finance (Manitoba), and may be in the form of:
(a) cash; or
(b) a term deposit that is acceptable to the director and is:
(i) issued by a bank, trust company, or credit union; and
(ii) assigned as to principal to the Minister of Finance (Manitoba) with confirmation in writing of assignment from the bank, trust company, or credit union.
10(2) Subject to subsections (3) and (4), the amount of a performance deposit required from the holder of or an applicant for a well licence or battery operating permit is $7,500 for each well and battery to a maximum of:
(a) $15,000;
(b) $30,000 where, in the opinion of the director, the net revenue from the wells or batteries to which the performance deposit is applied is, over the six months preceding the day on which the performance deposit is determined, less than the cost of abandoning the wells or batteries; or
(c) $60,000 where, in the opinion of the director, the net revenue from the wells or batteries to which the performance deposit is applied is, over the 12 months preceding the day on which the performance deposit is determined, less than the cost of abandoning the wells or batteries.
10(3) The director may at any time redetermine the amount of a performance deposit required under subsection (2) where the director is satisfied that the circumstances have changed since the amount of the performance deposit was determined.
10(4) Where a performance deposit is required under clause (2)(b) or (c) but the director is satisfied that special circumstances exist, the director may at any time reduce the performance deposit to a minimum of $15,000 and may make the reduction subject to any term or condition that he or she considers necessary or advisable.
10(5) Notwithstanding subsection (1), where a performance deposit is required under clause 2(b) or (c), the licensee or permittee, with the prior approval of the director, may submit the portion of the performance deposit in excess of $15,000 in the form of a letter of credit that is acceptable to the director.
PART 4
Spacing Units, Target Areas and Off-Target Penalties
Drilling and Production Regulation Table of Contents
Standard size of spacing unit and target area
11 Subject to section 12:
(a) for the purpose of this regulation, a spacing unit of an oil well is a legal subdivision; and
(b) the target area in the spacing unit is a square with sides 100 m from and parallel to the sides of the spacing unit.
Application to vary size of spacing unit or target area
12 An application under section 102 of the Act to vary the size and shape of a spacing unit and its target area must be submitted to the director in quadruplicate and must include the following:
(a) a map showing the area of application and boundaries of each proposed spacing unit;
(b) the names and addresses of owners within 0.5 km of the area of application;
(c) a statement of the size and shape of each proposed spacing unit and target area and the formations to which the application applies;
(d) a geological and engineering report that provides justification for the application and includes:
(i) a geological description of the formation;
(ii) a list of rock and fluid properties determined for the reservoir;
(iii) a comparison of the estimated rates of production of oil and ultimate recovery of oil with and without the proposed spacing units; and
(iv) the economics of developing the area with and without the proposed spacing units;
(e) a discussion of the anticipated effect of the proposal on the correlative rights of the owners listed under clause (b);
(f) where the application is to reduce the size of a spacing unit:
(i) the name and address of each owner and occupant of the land surface in the area of the application;
(ii) a statement outlining the current land use in the area of application; and
(iii) a discussion of the impact of the proposed reduced spacing on land use and the environment in the area of application;
(g) any other information that the director or minister may require.
Horizontal well penetrating more than one spacing unit
13(1) An operator is not required to make an application under section 102 of the Act for the purpose of allowing a horizontal well to penetrate or drain more than one spacing unit.
13(2) A horizontal well is deemed to be off-target if the completed interval of the well is within 100 m of a spacing unit to which no production from the well is allocated.
13(3) Where two spacing units are separated by a road allowance, the road allowance is deemed to have zero width, and the boundary of the two spacing units is deemed to be the centre line of the road allowance for the purpose of determining:
(a) the spacing units within the drainage unit; and
(b) whether the well is off-target.
Well completed outside target area
14(1) Subject to subsections (2) and (3), where a well is completed outside its target area, the maximum production rate for the well determined under section 62 shall be reduced by an off-target penalty factor determined under Schedule F.
14(2) A well is not off-target and the off-target penalty set out in Schedule F does not apply:
(a) where the adjacent spacing unit and the spacing unit in which the well is drilled are owned by the same person; or
(b) for an exploratory well, where the well is within 100 m of the boundary of a spacing unit in which the Crown holds all of the oil and gas rights, and:
(i) no disposition of the oil and gas rights in the spacing unit has been made under the Act; or
(ii) the holder of any disposition of the oil and gas rights in the spacing unit is the licensee, or consents to the drilling of the well by the licensee.
14(3) Where the minister varies the size or shape of a spacing unit and its target area under section 102 of the Act, the minister may set an off-target penalty factor to be applied to reduce the maximum production rate if the well is not completed within the target area.
15 The minister may delegate his or her authority to make an order under section 102 of the Act to the director.
Application for waiver of off-target penalty
16 An application under subsection 103(2) of the Act for waiver of an off-target penalty must be made to the director and must include the following:
(a) the well name;
(b) a diagram showing the location of the well within the spacing unit;
(c) the name and address of the owner of the spacing unit in which the well is located and of the owner of any other spacing unit located within 100 m of the well;
(d) a description of the geological, topographic, land use, economic, or other reasons for locating the well outside the target area;
(e) the written consent of each owner referred to in clause (c) to waive the off-target penalty or a discussion of the anticipated effect of the off-target penalty on the correlative rights of those owners;
(f) any other information the director may require.
PART 5
Equipment Registration
Drilling and Production Regulation Table of Contents
Drilling rig, service rig, and truck registration
17(1) Before conducting operations in Manitoba, the operator of a drilling rig, service rig, or salt water truck shall register the rig or truck with the branch on a form provided by the district office.
17(2) The operator of a drilling rig or service rig under subsection (1) shall give the district office written notice of any modification to the hoisting equipment on the rig requiring certification under The Workplace Safety and Health Act within seven days after the modification is completed.
17(3) The operator of a drilling rig, service rig, or salt water truck registered under subsection (1) shall ensure that the rig or truck is labelled with the name of the company and the unit number.
