April 2017
March Luncheon SummaryApril Early Morning Session
Contracts Corner
May PJVA/GPAC Joint Luncheon
May AIPN Workshop
June 28th Annual Golf Networking Event
JV Certificate Program at SAIT Update
March Luncheon Summary
March 22, 2017
The Luncheon Series
The Luncheon Series held on March 22nd was moderated by Jamie Fisher, Director, Energy Exports at AltaGas Ltd. Jamie’s presentation provided an overview of the Ridley Island Propane Export Terminal, Canada’s first gas export facility on BC’s coast. This topic has had large interest with 85 attendees, since there has been immense interest in the proposed LNG facilities but not one with an approved FID.
Jamie started off the presentation by sharing the background for the $475 million dollar propane facility, stating it was initially conceived as a project to benefit the propane producers, finding a way to take advantage of a more direct route to Asian markets for propane and saving money on transportation fees. This project has the potential to save 15 days in transit to Asia as well as $0.25-$0.40US/gallon. The current ocean freight costs have stabilized after recent lows during the summer of 2016 and economics only stand to improve as freight rates increase. AltaGas is enabling their customers to take control of their production by being able to diversify their propane transportation decisions or at least have another suitable option.
For the members who were unable to attend, a copy of Jamie’s presentation can be found on the PJVA website behind the member’s area.
April Early Morning Session
April 26, 2017
2017 CAPL Property Transfer Procedure
Presented by Jim MacLean, Manager, Mineral Land Asset Management at Repsol Oil & Gas Canada Inc. Jim is the committee chair and principal draftsman of the 2000 and pending 2017 CAPL Property Transfer Procedures. He has also been the principal draftsman of the 1990, 2007 and 2015 CAPL Operating Procedures and the 1997 and 2015 CAPL Farmout & Royalty Procedures, and is actively involved in the creation of the pending 2017 PJVA-CAPL Pad Site Sharing Agreement.
CAPL issued the second draft of the update to the 2000 CAPL Property Transfer Procedure in late January. The third draft will be presented to industry for review in late spring, and CAPL endorsement is expected in October. PJVA is represented directly on the Committee by Paul de Villenfagne as the PJVA Liaison.
This update reflects the need to modify the 2000 document based on industry's experiences and concerns. It also reflects a major change in focus in order to broaden the use of the document. The 2017 document is designed around the typical "vanilla" low to modest value transaction for which users want to optimize transaction efficiencies by “making simple transactions simple again”. This EMS will focus on demonstrating the potential efficiencies that can be gained by using the 2017 CAPL Property Transfer Procedure for the transaction types for which it is designed in the context of a review of several sample case studies. This review will offer helpful insights about A&D processes for JV personnel who are involved in transactions or who wish to learn more about transaction flows by reviewing the annotated version of the document and the other associated materials available on the CAPL website. It is expected that the review will generate questions and discussion on handling JV issues that may arise during a transaction.
Contracts Corner
In the last article, we talked about AFE inaccuracies and the impact small mistakes have on G&A within organizations. In keeping with the AFE theme, have you ever wondered how AFE’s should be handled in an A&D transaction from the Seller’s perspective to ensure that all costs are allocated to the correct Party, the Seller or the Buyer?
There are two scenarios to consider; 1) where Seller is Operator, and 2) where Seller is a partner (non-operator).
Scenario 1 – Seller is Operator
Purchase and Sale Agreement is signed, but prior to Closing Date:- New AFEs and Supplemental AFEs raised may be subject to the new Buyer’s approval, but are sent out to Parties under the Operator’s (Seller’s) name. Seller (Operator) is acting as agent, on behalf of Buyer, from the date the Purchase and Sale Agreement (“PSA”) is signed to the Closing Date, so the Seller would have to obtain approval/direction from the Buyer.
After Closing Date
- Buyer and Seller will adjust all costs back to the Adjustment Date as negotiated in the PSA.
- The working interest of the asset will be conveyed by an Assignment Agreement issued by the Seller and the Buyer is recognized the 1st day of the Month following receipt.
- New AFEs are raised after closing by the new Operator (Buyer).
- Supplemental AFEs raised after the Closing Date:
- If a supplemental AFE applies to work completed prior to the Effective Date of the PSA, the Seller would be responsible to issue to Partners.
- If the supplemental AFE applies to work completed between the Effective Date and Closing Date of the PSA, the Buyer would be responsible issue to Partners.
Scenario 2 – Seller is Partner (Non-Operator)
Purchase and Sale Agreement is signed, but prior to Closing Date:- New AFEs and Supplemental AFEs received from Operator may be subject to the new Buyer’s approval, but are Seller’s responsibility. Again, Seller is acting as agent on behalf of Buyer until Closing Date and would have to obtain approval/direction from Buyer on any AFE’s received from Operator during this period.
After Closing Date
- Buyer and Seller will adjust all costs back to the “Adjustment Date” as negotiated in the PSA. Correct.
- The working interest of the asset will be conveyed by an Assignment Agreement issued by the Seller and the Buyer is recognized by the Operator the 1st day of the Month following receipt of notice.
- New AFEs raised by the Operator prior to the new Buyer being recognized are issued to the Seller. Seller would likely forward on to the Buyer to handle if it relates to work between Effective Date and Closing Date.
- New AFEs raised by the Operator after the 1st day of the month, are issued to the Buyer.
- Supplemental AFEs issued by Operator and received after the Closing Date, will always be issued using the working interest of the original AFE:
- If a supplemental AFE applies to work completed prior to the Effective Date, the Seller would be responsible.
- If the supplemental AFE applies to work completed between the Effective Date and Closing Date, the Buyer would be responsible.
If you have any questions regarding this topic, please do not hesitate to email us using the link below.
Coming Soon
Coming very soon are the Mail Ballot Template Letters. Please stay tuned for this exciting new addition to the suite of Administration Portfolio template letters, which are already available for use.
Ask a Question/Feedback
Do you have a question about an agreement? Do you constantly get stumped with the same Agreement clause? Do you have something to share about a unique contractual situation you have dealt? We want to hear from you.
Please send in your questions or feedback to admin@pjva.ca.
May GPAC/PJVA Joint Luncheon
May 24, 2017
Carbon Capture, Storage and EOR –
NW Redwater's Sturgeon Refinery & the AB Carbon Trunk
Line the world's largest carbon capture and storage project
The Alberta Carbon Trunk Line (ACTL), is a 240 kilometer pipeline running from Northern to Central Alberta, built by Enhance Energy Inc., a company specializing in enhanced oil recovery (EOR) and CCS technology.
The CO2 sourced from North West Redwater’s Sturgeon Refinery and Agrium’s Facilities will be delivered via the Alberta Carbon Trunk Line to Central Alberta for EOR to be injected into depleted oil reservoirs.
The ACTL will act as a CO2 solution to industrial facilities looking to reduce their GHG footprint. At full capacity, it will be the world’s largest carbon capture and storage project capable of storing 14.6 million tonnes per year, the equivalent to removing every car in Alberta off the road. It will help Producers add another 10 per cent or more to production profiles at their wells, while trimming their emissions profile.
May AIPN Workshop
May 4 and 11, 2017
Model Dispute Resolution Agreement Workshop
This two-part workshop will provide a detailed review of what counsel and executives need to know to anticipate and manage international business disputes with a focus on the international oil and gas business. The presentation will include a detailed review of the following topics:
Part one- Anticipating disputes in international business transactions and how to plan for them
- Types of dispute resolution methods
- International legal framework for resolving business disputes
- Effective drafting of dispute resolution clauses
- The new AIPN Dispute Resolution Agreement and how to use it in your agreements
| Presenter | Tim Martin Managing Director, Northumberland Chambers, AIPN Past President, Co-Chair of AIPN Model Dispute Resolution Agreement Committee |
| Commentary | David Tupper and Mike McCachen from Blake, Cassels & Graydon LLP |
| Date |
Part one May 4, 2017 Part two |
| Location |
Calgary Petroleum Club
Devonian Room 319 – 5 Avenue SW T2P 0L5 |
| Agenda |
Registration Presentation Breakfast will be served between 7.30am and 8am. There is no charge for this event, which is supported by Blakes. Registrants are kindly requested to provide a minimum 24hr notice of cancellation if they are unable to attend. |
Register now
Use the password AIPN2017 to register!
June 28th Annual Golf Networking Event
June 8, 2017
Celebrate the 28th Annual Golf Networking Event on June 8, 2017 at Inglewood Golf & Curling Club!
Breakfast is included this year, so be sure to check in at 7.30am!
| Location |
Inglewood Golf & Curling Club 19 Gosling Way SE (off 19 St SE) T2B 3V7 |
| Time |
Shotgun Start 8.30am |
| Fees |
PJVA members $115 (plus GST) Non-members Dinner Club rental Fee includes green fees, driving range, power cart, lunch and prizes! |
| Deadline | June 1, 2017 |
Register now
Register before May 15 to qualify for door prizes!
JV Certificate Program at SAIT Update
The SAIT curriculum will begin September 2017. I know it has been a long time coming, but it is finally here for those individuals whom would like to take the Joint Venture Certificate at SAIT. Please be advised that the PJVA estudies program is not transferrable to SAIT. With this being said, PJVA has been able to create a process for those whom want to get credit for the Petroleum Overview Course and the Facilities Course.
Petroleum Overview Course – PTOV 126
In regard to the Petroleum Overview Course – PTOV 126, SAIT has asked that the following process be followed:
Click here for the Introduction to Facilities – OPMT 100. If a student has five years or more experience in the Oil and Gas industry or has taken a similar course; the prerequisite Petroleum Overview — PTOV 126 will be waived.SAIT has offered some other options in order to obtain credit for the Petroleum Overview Course.
- Write a challenge exam if they had less than five years of industry experience. The cost for this would be $250.
- Go through the PLAR (Prior Learning Assessment Request) process. The cost of this method is $150.
PLAR (Prior Learning Assessment Request)
Should a student want to go through the PLAR (Prior Learning Assessment Request) process please follow the below guidelines:
To apply, all students need to fill out application form to our office along with learning portfolios, one for each SAIT course you are seeking credit for, which outlines your experience and knowledge in relation to the learning outcomes of a SAIT course. Please be sure to review the portfolio criteria document that is attached.
Portfolios generally include but are not limited to the following:
- A recent resume
- Detailed job description
- Letters from employers/supervisors confirming skill level and ability in regards to the SAIT course in which credit is being sought
- Samples/examples/drawings/blue prints etc. of relevant work completed
- Proof of non-formal or informal training and education
- Plus, any other documentation you feel will help strengthen your request for credit
Should a student want to get credit for the Facilities Course, the PLAR process is applicable for obtaining this credit.
To view program schedule, click here.
Should you have any inquiries in regard to receiving credit for courses, please use the contact information below.
Leah ChanghasengProgram Coordinator
(403) 210-2017
leah.chanthaseng@sait.ca
Upcoming Events
April 26, 2017 – Early Morning Discussion
May 11, 2017 – Land Agreements Seminar
May 17, 2017 – Intro to JV Auditing Seminar
May 24, 2017 – PJVA/GPAC Joint Luncheon
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.