Manitoba Science, Technology, Energy and Mines

Manitoba Oil & Gas Tenure System

Manitoba Land Administration and Tenure

April, 2000

Petroleum and Energy Branch

Introduction

The Petroleum Branch of Science, Technology, Energy and Mines is responsible for the administration of Crown oil and gas rights and all agreements relating to these rights within the Province as established under The Oil and Gas Act and the Crown Disposition Regulation.

Approximately 80% of the oil and gas rights are held privately by individuals or corporations (freehold), in southwestern Manitoba. The remaining approximately 20% of oil and gas rights are owned by the Province (Crown). This includes a small number of tracts that are owned by the Federal government and Indian lands.

Contacts

Inquiries regarding Crown dispositions and land administration in Manitoba may be directed to the contacts listed below

Dan Surzyshyn
Acting Petroleum Registrar
Science, Technology, Energy and Mines
Petroleum  Branch
1395 Ellice Avenue, Suite 360
Winnipeg, Manitoba 
R3G 3P2
Ph: (204) 945-8102
Fax: (204) 945-0586
E-mail: dan.surzyshyn@gov.mb.ca

Angela Hiebert
Leasing Clerk
Science, Technology, Energy and Mines
Petroleum Branch
1395 Ellice Avenue, Suite 360
Winnipeg, Manitoba
R3G 3P2
Ph: (204) 945-6578
Fax: (204) 945-0586
E-mail: angela.hiebert@gov.mb.ca

For easy access to notices and results of a "Public Offering of Crown Oil and Gas Rights" and information regarding Crown dispositions, or to order an office consolidation of the and The Oil and Gas Act (available in pdf) and the Crown Disposition Regulation legislation, please contact the Branch, or refer to our website at: www.gov.mb.ca/petroleum

Freehold Oil & Gas Leasing

Petroleum and natural gas leases of privately owned mineral rights are negotiated between the owner of the rights and the party wishing to acquire a lease.

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Oil and Gas Lease Agents

In Manitoba, anyone who negotiates the acquisition of an oil and gas interest from a freehold oil and gas rights mineral owner, or an agent of a mineral owner, must be registered with the Branch as an "Oil and Gas Lease Agent" in accordance with the Oil and Gas Lease Agent Regulation under The Oil and Gas Act (available in pdf).

Application for registration must be submitted in writing to the Petroleum Registrar and should include the corporate address and names of all person(s) to be registered as "Oil and Gas Lease Agents" under the registration, accompanied by the registration fee.

There are two categories of "Oil and Gas Lease Agent" registration:

Corporate:

• $200 fee
• 2-year calendar term
• registration renewable every 2 years
• $100 fee to amend or renew registration .
  (includes any additions or deletion to the names listed under the corporate registration, or change in corporate address. Amendments can be made at any time within the term of the registration by written notice to the Petroleum Registrar.)

Individual:

• $100 fee
• 2-year calendar term
• registration renewable every 2 years
• $50 fee to amend or renew registration.
  (includes any change to the name listed under the individual registration, or change in corporate address. Amendments can be made at any time within the term of the registration by written notice to the Petroleum Registrar.)

Manitoba Land Titles Offices

The Land Titles Offices in Manitoba administer the record of land and interests in land within the Province of Manitoba through the maintenance of official registries required under The Real Property Act and The Registry Act.

Titles to privately held lands that include mineral interests, or minerals held by an individual(s) other than the Crown, may be searched by contacting one of the District Land Titles Offices located on The Property Registry Contacts Page
(Figure 1 - (827KB).

Federal & Indian Land Leasing

The leasing of Federal and Indian Lands are administered directly by these authorities. The appropriate sources should be contacted regarding these lands and the acquisition of oil and gas lease rights.

Surface Rights

The Surface Rights Board is a quasi-judicial board established under The Surface Rights Act. The primary function of the board is to arbitrate disputes relating to right of entry or compensation for surface rights used by holders of oil and gas rights. The board also provides mediation services between surface owners, occupants and oil and gas rights holders on a voluntary basis.

The board is an independent, impartial body responsible for hearing all sides and, from the evidence, making decisions within the framework of The Act.

The Surface Rights Actand the board are administered under the Mineral Resources Division of Science, Technology, Energy and Mines.

The Petroleum Branch of Science, Technology, Energy and Mines is responsible for administration of The Oil and Gas Act.  The Oil and Gas Act regulates all aspects of exploration for and development of Manitoba's oil and gas resources.

Surface Rights Board Members:

T.A. (Art) Cowan - Presiding Member

Margaret Hodgson - Member

Claude Tolton - Member

Ivan Carey - Member
 

All inquiries and correspondence related to the board should be directed to:

The Surface Rights Board
360-1395 Ellice Avenue
Winnipeg MB R3G 3P2
Attention: Barb Miskimmin, Secretary to the Board
Phone: (204) 945-0731
Toll-free: 1-800-282-8069   Ext. 0731
Fax: (204) 948-2578
E-mail: barb.miskimmin@gov.mb.ca

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Crown Oil & Gas Leasing

Crown Lease Sales Postings and Notice of Sale

The Crown Disposition Regulation provides for public sales by sealed tender of Crown oil and gas rights in Manitoba. Four sales are generally conducted by the Branch every year, in the months of February, May, August and November. Sale dates and corresponding posting request deadlines are published annually.

Posting requests to be included in any given sale are to be submitted to the Branch by the published deadline. The postings requests are reviewed by the Branch, to verify the ownership of the rights requested, and also by other provincial Branches and Departments to provide comments, particularly with respect to surface access in environmentally sensitive areas.

A notice of "Public Offering of Crown Oil and Gas Rights", listing all parcels and conditions of sale is published 5 weeks prior to the date of the sale. An addendum indicating any special conditions attached to the disposition of any parcel may also be included in the notice. This may involve a drilling commitment as a condition of purchase, or special environmental conditions that may exist with respect to surface access.

The notice is distributed to industry publications and to all interested parties on the Branch mailing list, as well as made available on the Branch internet website.

Any company that intends to purchase a disposition must be registered to do business in Manitoba. Registration may be made by application to the following address:

Manitoba Companies Office
Woodsworth Building
1010 - 405 Broadway
Winnipeg, Manitoba
R3C 3L6
Ph: (204) 945-2500
Fax: (204) 945-1459
E-mail: www.gov.mb.ca/cca/comp_ off/index.html

Bid Offerings

All bid offerings are submitted under "sealed tender", as directed in the sale notice, and must consist of the first year rental fee ($3.50/hectare) and a non-refundable $400 application fee, along with the bonus offer as determined by the bidder. An address for service, GST Registration Number and the names and percentage interest of all parties to the agreement is also required.

The formats for bid offerings acceptable to the Branch are provided in the samples shown in Figure 2, 3 and  4.

Electronic Fund Transfer

It is mandatory in Manitoba that all payment of fees associated with bid offerings, including the first year rental, application fee and bonus offer are submitted electronically. All corporate account information is to be submitted to the Branch prior to the sale in the format shown in Figure 5.

If successful, the bidder's corporate account is debited for the applicable rental, application fee and bonus.

Sale Results

The results of a "Public Offering of Crown Oil and Gas Rights" are published the next day following the date of the sale on the Branch internet website, and are also distributed to all bidders and interested parties on the Branch mailing list.

Types of Dispositions

There are two types of agreements relating to Crown oil and gas rights in Manitoba, "exploration reservations" and "Crown oil and gas leases".

Exploration Reservation

An "exploration reservation" is an agreement with the Crown that grants the holder the exclusive right to drill within the area of the reservation for a term of 3 years.

A 1-year extension to the "exploration reservation" term may be granted if the lessee commits to drill a well during the extension term, subject to Branch approval.

Prior to producing from any wells drilled in the reservation area, the holder must convert the exploration reservation to lease.

The depth of the well(s) drilled in the reservation area determines the number of quarter sections that may be selected as Crown oil and gas leases in accordance with the following formula:

L = 8 + (D - 500)/60

Where;

L is the maximum number of quarter sections for selection (not less than 8)

D is the depth (in metres) of the well(s) drilled

Crown Oil and Gas Lease

A "Crown oil and gas lease" grants the lessee the exclusive right to drill in and produce oil and gas from the area covered by the agreement for a term of 5 years.

If the area is productive, the lease is renewable for further 5-year terms. At the end of the second term, deeper rights are severed and only productive spacing units are renewed.

Extensions to existing terms may be granted if the lessee commits to drill a specified number of wells during the extension term, subject to Branch approval. Where the number of undrilled spacing units contained in the lease is four or less, a one well drilling commitment is required. A one well drilling commitment is required for every four undrilled spacing units contained in the lease after the first four. An additional one well drilling commitment is required for any remaining undrilled spacing units contained within the lease. A penalty fee is levied for each year of extension for up to 5 years (Table 1).

Production from a lease is subject to a Crown royalty (share of production) in accordance with the Crown Royalty and Incentives Regulation.

Where a lease holder is required to attain Crown oil and gas rights to complete a spacing unit under a lease agreement, a private sale of a "Crown oil and gas lease" may be made to the holder of the remaining interest in the spacing unit by the Branch.

Table 1 provides a summary of information regarding fees, rentals and extensions concerning "exploration reservations" and "Crown oil and gas leases".

Table 1: Types of Crown Dispositions

Other

Crown LeaseTransfers/Divisions

In accordance with the Crown Disposition Regulation under The Oil and Gas Act, the holder of a Crown oil and gas lease may transfer the whole, or an undivided part of the interest in a Crown disposition.

Any new holder of a "Crown oil and gas lease" must be registered to do business in Manitoba through the Manitoba Companies Office. Registration may be made by application to the Manitoba Companies Office at the following address:

Manitoba Companies Office
Woodsworth Building
1010 - 405 Broadway
Winnipeg, Manitoba
R3C 3L6
Ph: (204) 945-2500
Fax: (204) 945-1459
E-mail: www.gov.mb.ca/cca/comp_off/index.html

An application for transfer must be submitted to the Petroleum Registrar in the application form prescribed under Schedules D, E or F of the Crown Disposition Regulation (Figures 6, 7 and 8).

The holder may also divide a lease area into parts of not less than one spacing unit in size, in accordance with the Crown Disposition Regulation. An application for division of a lease area must be submitted in writing to the Petroleum Registrar and must include a description of the lease area being requested by the holder for separate lease.

Registration of Crown Lease Holder Name Changes or Company Amalgamations

Any changes to the holders of a Crown disposition that result either from changes to the existing lease holder's name or the amalgamation of the existing lease holder with another company must be registered by the Branch and with the Manitoba Companies Office.

Written submissions must be made to the Petroleum Registrar for registration with the Branch. Submissions should include any changes to the "address for service" of the lease holder, an official copy of a "certificate of amalgamation", where applicable, along with an official copy of the "Manitoba Supplementary Certificate of Registration" obtained through the Manitoba Companies Office, which demonstrates that the lease holder is registered to do business in Manitoba.

Registration of Instruments on Crown Oil and Gas Leases (Caveats and Assignments)

Any person who wishes to register an instrument against a Crown disposition must submit a "Notice of Instrument" to the Petroleum Registrar in the form prescribed under Schedule G of the Crown Disposition Regulation (Figure 9), along with a $25 registration fee.

A registration of an instrument may be discharged by submitting a "Notice of Instrument" to the Petroleum Registrar in the form prescribed under Schedule H of the Crown Disposition Regulation (Figure 10).

Crown Oil and Gas Lease Searches

The Petroleum Branch publishes a "Crown Oil & Gas Rights Map", showing all Crown dispositions and their status. The map may be ordered by contacting the Branch directly, or on-line through our internet website (please refer to the addresses shown above). A searchable "Geographic Listing of Crown Leases and Exploration Reservations" is also available on the Branch internet website which shows the lease holder, disposition number, legal description of the area covered and the expiry date of the disposition for all Crown dispositions under lease in Manitoba. Both the map and disposition listing is updated on a regular basis.

Official disposition search requests may also be made in writing to the Petroleum Registrar at a fee of $10/disposition.

Crown Oil and Gas Lease Surrenders

The holder of a "Crown oil and gas lease" may surrender all or part of the lease area by written notice to the Petroleum Registrar.