June Regulatory Newsletter

June 2021

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AB: Invitation for Feedback on Revisions to Directive 040

The AER is seeking feedback on a new edition of Directive 040: Pressure and Deliverability Testing Oil and Gas Wells. The following are the key changes that the AER is seeking feedback until July 4, 2021:

· Modernized and updated guidance for minifrac tests, also known as diagnostic fracture injection tests (DFIT), pressure gauge information, and drill stem tests.

· Increased the exemption eligibility criteria for the initial pressure test requirements on oil, gas, and step-out wells.

· Rescinded the requirement to conduct an absolute open flow (AOF) deliverability test on new gas wells.

· Rescinded the requirement to conduct annual pressure tests for oil and gas pools under primary production.

Additional information can be found Bulletin 2021-21

AB: OneStop Upcoming Trainings

Starting on July 8, 2021, industry must submit the following using OneStop. The AER is hosting a virtual training session to explain the changes and demonstrate how to submit applications through the platform.

Submit Well Log Files - submitting LAS and Raster logs through the platform. Register here

Submit a Record of Site Condition (RoSC) - This training does not include submissions required under an Environmental Protection and Enhancement Act (EPEA) approval for mining operations. Register here

Surface Material (Borrow) - surface material dispositions. Register here

Alberta Energy: Carbon Sequestration (CCUS)

On May 12, 2021, the Government of Alberta announced that by late spring 2021 due to increased interest it intends to implement a competitive process to issue Carbon Utilization and Storage (CCUS) sequestration tenure rights to hub operators.

A successful hub operator will provide carbon sequestration services to a number of industrial facilities, ensure open access to the hub, provide fair service rates, account for carbon offsets or future credits, and provide an opportunity for Albertans to realize a fair economic benefit as operations advance.

The competitive process is intended for dedicated geologic storage hubs only. It does not refer to, or preclude, projects that will inject and store carbon dioxide for enhanced oil or gas recovery. Such operations will continue to operate under the appropriate mineral rights tenure system.

Alberta Energy encourages industry partners to consider submitting a proposal when the competitive process is put forward in late spring.

Stay tuned for upcoming news.

Additional information can be found here

Alberta Energy: Crown Mineral Activity Authorization (CMA) – Well Licence Transfers

Alberta Energy is now accepting applications for Crown Mineral Activity Authorization (CMA) where active operations are underway at the same time an application is made to the Alberta Energy Regulator (AER) to transfer a well licence.

Wells with a pre-existing CMA will receive priority reviews. Although CMA applications may be accepted prior to a well licence transfer being approved, the potential CMA authorization would not have an effective date that is earlier than the well transfer date. CMA applications submitted following a well licence transfer will not be retroactive.

Well licences being transferred, and which do not have a pre-existing CMA authorization, will not be eligible for the priority review. Similarly, wells that have not been completed or are not under active operation during the 12 months prior to the well licence transfer will not be eligible.

CMA authorizations are specific to both the well event and well licensee and cannot be transferred.

Additional information can be found here

SK: High Water-Cut Oil Well Program (HWCP)

The new expanded High Water-Cut Oil Well Program (HWCP) that was announced in the 2021-2022 Saskatchewan budget is now accepting applications. The HWCP provides a royalty status re-assignment for qualifying high water-cut oil wells that incur an average minimum investment of $20,000 per well, to directly improve water handling capabilities and extend the producing life of the well.

· Oil wells drilled prior to October 1, 2002, will receive Fourth-Tier Royalties on their incremental high water-cut oil; and

· Oil wells drilled on or after October 1, 2002, will receive a 2% royalty rate deduction on all oil produced.

Additional information can be found here

SK: BT2021-005 Revised Directive PNG030: Fees for Oil and Gas Data and Related Services

On May 21, 2021, an updated version of Directive PNG030: Fees for Oil and Gas Data and Related Services came into effect.

Additional information can be found in BT2021-005

BC: Update to the Application Management System (AMS) – Consultation & Notification (C&N)

Further to INDB 2021-16, the C&N tab in AMS will be temporarily disabled effective June 1, 2021 for Oil and Gas Activities Act (OGAA) applications and OGAA amendment applications.

To assist applicants with amendment applications during this period, an OGAA Amendment Application Form has been developed and is required to be submitted with OGAA amendment applications, where the C&N tab has been temporarily disabled.

Additional information can be found here

Well Testing Services at Benoit

To support Benoit's regulatory application and compliance related submissions, Benoit utilizes an in-house well test analysis expert, Mr. Reza Ali, C.E.T.

Mr. Ali has over 30 years of experience specializing in domestic and international Flow and Build-Up, Production Data and DFIT Analyses.

If you would like a well test analyzed or if you would simply like more information on our well testing services, please feel free to contact Robyn (at 403.263.3690) or Jason (at 403.874.6769). You may also contact Reza Ali directly at 403.454.0430

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