JVViews: April 2016 IssueEditor's Note
JV Administration Corner
Save The Date: 2016 GPAC/PJVA Joint Conference
Early Morning Discussion Summary
PJVA Pub Networking Night Summary
Mini Information Session
National Volunteer Week in Canada was April 10-16, 2016. This excerpt, taken from the Volunteer Canada website, speaks to National Volunteer Week and the important role that volunteers play in our communities:
”Volunteers are the roots of strong communities. Just like roots are essential for trees to bloom, volunteers are essential for communities to boom. Thanks to volunteers, our communities grow strong and resilient. Even the tiniest volunteer effort leaves a profound and lasting trace in a community, much like tree rings that appear over time.
April 10 to April 16, 2016 is National Volunteer Week (NVW), a time to celebrate and thank Canada’s 12.7 million volunteers. This year marks the 13th consecutive year that Volunteer Canada and Investors Group have partnered to deliver the NVW campaign. Volunteer Canada and Investors Group’s Volunteer Recognition Study indicates that most volunteers prefer a genuine thank you for their efforts. Sincere words that highlight the impact of a volunteer’s contributions or simple personalized tokens are meaningful and appreciated.
The “Volunteers are the roots of strong communities” campaign will celebrate volunteers across Canada, by offering NVW-branded recognition items made from all natural seed paper that can be planted. Gift packs of seed paper confetti, seed paper journals and seed paper postcards will include space to add a personalized thank you message to a volunteer. Recipients can then plant their recognition item, allowing it to sprout roots that shape new paths and keep growing, much like the incredible efforts of volunteers.“
PJVA would not be successful without the commitment and support of amazing volunteers. The PJVA Board of Directors extends their thanks and gratitude to the 111 dedicated, hard-working volunteers who each contribute to the success of our Association. Click here to see a list of volunteers from the 2014-2015 year. This list is currently being update for 2015-2016.
Oil Industry Tidbits
|1942 -||Federal Government took control of the Abasand project at Athabasca to try and accelerate production from tar sands as part of the war effort.|
|1942 -||CANOL pipeline project commenced; a US wartime effort to link Norman Wells to Whitehorse. It was only used from 1944-1946. Oil from this pipeline had a true cost of $137.19 per barrel.|
|1943 - 1945 -||First offshore well is drilled by Mobil from an artificial island off Prince Edward Island.|
|1944 -||Jumping Pound field is discovered by Shell - first efforts to recover sulphur from sour gas.|
|1947 -||February 13th, Leduc field is discovered – the famous “Imperial Leduc No. 1” well.|
|1948 -||Atlantic Leduc #3 blew out.|
|1948 -||Redwater oil field is discovered (Leduc formation).|
|1948 -||Pouce Coupe - first gas discovery in northeast B.C.|
|1949 -||Golden Spike field is discovered (Leduc formation).|
JV Administration Corner
Agreement Maintenance - Disposal of Interest Documentation and Name Changes
In accordance with the Agreements below, it is the Operator's responsibility to ensure all obligations are satisfied by the departing/incoming Owner within a CO&O and Working Interest/Royalty Owner within a Unit.
Clause 905 of the Operating Procedure (Exhibit “A”) states:
- 905 (i) The Person acquiring the interest, if not already an Owner, has executed and delivered to Operator one (1) counterpart of this Agreement; and
- 905 (ii) a copy of the instrument, executed by both the disposing Owner and its assignee, evidencing such change in ownership has been delivered to Operator.
Clause 906 of the Operating Procedure (Exhibit “A”) states:
- An Owner whose name is changed by due legal process shall notify and supply evidence of the change to Operator as soon as possible.
Clause 1201 of the Unit Agreement states:
- At least one of the parties to such disposition has given the Unit Operator written notice of such disposition, together with a copy of a document evidencing such disposition; and
- Any acquiring parties which are not Parties have executed and delivered to the Unit Operator a counterpart of this Agreement and, in the event that the disposition is a disposition of a Working Interest, any acquiring parties which are not parties to the Unit Operating Agreement have executed and delivered to the Unit Operator a counterpart of the Unit Operating Agreement
Clause 1202 of the Unit Agreement states:
- If a Party changes its name or undergoes any other change affecting the information contained in Exhibit “A”, other than by way of a disposition, such Party shall provide the Unit Operator with written notice of such change, together with a copy of a document evidencing the same. The Unit Operator shall thereupon revise Exhibit “A” to reflect such change, and the revised version of Exhibit “A” shall be effective as of 08:00 on the first Day of the calendar Month next following the calendar Month in which such items are received by the Unit Operator.
Did you know / Fun Facts / Tips and Tricks
Nowadays much of the business writing is in the form of emails. Business emails are usually simple and straightforward. However, even in short emails you should include a clear subject line. Start the email with the name of the person you are writing to. Sign off with an appropriate closing formula such as “Best regards” or “Kind regards” and your name. In more formal emails sign off with “Yours sincerely”.- www.englishgrammar.org/business-writing-tips
Please feel free to send feedback to firstname.lastname@example.org
Question of the Month
Is the Operator obligated to provide documentation to support a change of interest revision?
It is the Operator’s responsibility to review the instrument or other documentation evidencing the change and assess whether the information provided satisfies the obligations in the agreement and to keep the supporting documentation on file in the case of a dispute. Once the Operator is satisfied, only then is a revised Appendix/Exhibit completed in accordance with the agreement and sent to the Parties and if applicable, an executed counterpart to the agreement. It is not a requirement of the PJVA model Agreements to forward the supporting documentation with a revised change of interest.
It has only been in recent years that some Operators have begun forwarding documentation to support the Appendix/Exhibit revision. Does this then pose other questions? What’s the purpose of sending the documentation? Is the non-operator now responsible to review this documentation and ensure it meets the obligations of the agreement in regards to their company’s policies and procedures? That could get complicated if the Operator and non-operator disagree on what is accurate… Why does a non-operator believe they too are responsible to keep documentation on the chain of title, even though it’s already provided in the Appendix/Exhibit revision? Or is it just easier for some Operators to send every piece of paper and let the non-operators sort it out?
Please feel free to send feedback to email@example.com
COMING SOON: Stay tuned for the launch of the CO&O Template Letters to be added to the Admin Portfolio Page.
We are all feeling the pressures of the economic environment. Hang in there!
Save the Date: 2016 GPAC/PJVA Conference
The 23rd Annual GPAC/PJVA Conference will be held on Wednesday, November 2 at the Petroleum Club. The theme of this year’s conference is “The Road to Recovery”. The conference committee is securing speakers from industry, media, and academia to talk about downturns in oil & gas industry and how to prepare for the next upswing.
The keynote speaker has already been confirmed. We are pleased to have Ian MacGregor, President, Chief Executive and Board Chairman with North West Upgrading Inc., and Enhance Energy Inc. Ian will provide details on the $8.5 billion refinery being built by NW Upgrading in Sturgeon County (45 km northeast of Edmonton) as well as Enhance Energy’s project to build the world’s largest carbon capture and storage project using CO2 for enhanced oil recovery.
As usual the conference will be a one-day event. Breakfast, lunch, and a post-conference networking social will all be included in the admission fee. Exact costs for admission and sponsorships will be finalized by the conference committee by Q2. Early rates will be offered to encourage our members to attend what will be another educational day.
Early Morning Session Summary
Wednesday, March 30, 2016
CO&O Update Part 2 - Specifications, Measurement & Allocation
The Early Morning Session held on March 30th was moderated by Tim Reimer with assistance from Lynda MacNeil who both sit on the CO&O Task Force. The Task Force's presentation provided an overview of some of the proposed revisions to the model CO&O with a particular focus on Appendices 7, 8 and 9: Specifications, Measurement and Allocation.
Tim started off the presentation by highlighting a common issue that occurs in the JV industry with CO&O agreements which is many disputes arising from the improper application or lack of clarity and understanding of the inlet specifications and the application of allocation programs. At the beginning of the presentation, Tim provided a general overall philosophy and rationale for the changes to the CO&O agreement. The main points were that the new agreement mirrors the way the oil business works in 2016 and beyond and that there will be major changes to the document, however, wholesale retraining will not be required. The agreement has been simplified for routine activities and provides for additional detail only with associated business value. Further into his presentation, Tim made comparisons of the 1999 Appendix 7, 8, and 9 to the proposed new CO&O Appendices. The common theme to the Appendices changes is that there is significantly more detail to them. The proposed changes are meant to help outline and clarify concepts such as allowable inlet substances and principles of the allocation process. Furthermore, the Appendices will include new definitions for facility meters and source effluent and they will address the metering network from source to sales.
Tim did a wonderful job engaging the audience by asking them questions on their experiences with existing CO&O agreements. Some of the questions discussed were, do Operators allow off-spec products into their inlet streams? Do most plants still follow the initial defined allocation procedure? Does the Operator provide enough clarity regarding how allocations are done? Tim’s discussion points really allowed the audience to become engaged in the session which led to a detailed Q&A portion between the speaker and audience. For the members who were unable to attend, a copy Tim’s presentation can be found on the PJVA website.
The next Early Morning Session will be held on Wednesday, April 27th and Tim Reimer and CO&O task force plan on presenting their 3rd update on the new CO&O Agreement. Possible topics could be on Capacity, Enlargements and Alterations, Dispositions and Changes in Operatorship. Stay tuned!
PJVA Pub Networking Night Writeup
March pub night was held on St. Patty's Day at the Palomino Smokehouse with 25 PJVA members. The Palomino served up a fun atmosphere with live music starting at 3:00 pm. There was great networking amongst members as you can see from the photos. Please keep any eye out for our last pub night of the year to be held in May prior to the summer break.
Mini Information Session - MEMBERS ONLY
The mini info session for the Pad Sharing Agreement is scheduled for May 4, 2016 from 8:00 am - 11:00 am at the ConocoPhillips Auditorium. Presenters include Michael Bruch, Lorraine Grant and Jim MacLean.
|Date:||Wednesday, May 4, 2016|
|Time:||8:00 AM - 11:00 AM|
Don’t forget to check out the Resources link of the website for Member Benefits.
PJVA was incorporated in 1985 to represent individuals and organizations involved in petroleum joint ventures. JVViews is published to keep members informed about upcoming PJVA and industry events, courses and seminars offered and/or sponsored by PJVA and current projects being facilitated by the Association.