The Magazine of the Canadian Association of Petroleum Landmen

March 2010

THE NEGOTIATOR

Effective Date vs. Closing DateWho bears the burden during

the Interim Period?

ERCB vs. AB CourtsDiffering Interpretations of a

Freehold Lease Habendum Clause

The Plight of the Income TrustConversion Considerations and Deadlines

EffECTivE DATE vs. CLosing DATE

McMillan LLP | Lawyers | Avocats | Calgary | Toronto | Montréal | mcmillan.ca

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2008–2009 CAPL Board of DirectorsPresident

Ken Gummo, P.Land [ph] 403-296-6044Vice-President

Dalton Dalik, P.Land [ph] 403-478-0528Director, Business Development

Frank Terner, P.Land [ph] 403-691-3056Director, Communications

Margaret Ariss [ph] 403-539-1107Director, Education

Jan McKnight [ph] 403-290-3406Director, Field Management

Jason Tweten, PSL [ph] 403-526-8590Director, Finance

James Condon, P.Land [ph] 403-215-8614Director, Member Services

Gloria Boogmans, P.Land [ph] 403-246-4173Director, Professionalism

Robyn Van den Bon, P.Land, PSL [ph] 403-503-5276Director, Public Relations

Robin Thorsen [ph] 403-203-4050Director, Technology

Sally Jackson [ph] 403-232-5570Secretary/Director, Social

John Covey [ph] 403-232-7323Past President

Robert Telford, P.Land [ph] 403-503-5265 Suite 350, 500 – 5 Avenue S.W. Calgary, Alberta T2P 3L5 [ph] 403-237-6635 [fax] 403-263-1620www.landman.ca

Meghan Cobb mcobb@landman.caDenise Grieve dgrieve@landman.ca Irene Krickhan ikrickhan@landman.caKarin Steers ksteers@landman.ca

Also in this issue

12 2010 Kelowna Conference Update

16 Thirteenth Annual CAPL 9–Ball Pool Tournament

27 Olds College Land Agent/Land Administration

THE NEGOTIATORThe Magazine of the Canadian Association

of Petroleum Landmen THE NEGOTIATOR

Features March 2010

2 Effective Date vs. Closing Date: Legal and Tax Issues

John W. McClure and Nadia Talakshi

6 From a Well on the Lands at the End of the Primary Term

Paul Negenman

9 The Plight of the Income Trust Kathleen L. Keller-Hobson

In Every Issue14 Board Briefs

17 Message from the Executive – Technology

18 Message from the Executive – Business Development

19 Get Smart

23 Roster Updates

24 In Memoriam

28 CAPL Calendar of Events

28 March Meeting

28 April Meeting

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written BY

JOHN W. MCCLuRE

AND NADIA TALAkSHI1

GowlinG lafleur Henderson llP

Effective Date vs. Closing Date: Legal and Tax Issues

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written BY

JOHN W. MCCLuRE

AND NADIA TALAkSHI1

GowlinG lafleur Henderson llP

In A&D transactions, the time in between the effective date and

the closing date, referred to as the “interim period”, can be a period

of uncertainty from a tax perspective with respect to determining

who is responsible for declaring income from the property and to

whom liabilities should be allocated. This article will discuss the

requirements for an effective date to be respected for legal and

tax purposes, and certain legal and tax implications for the vendor

and purchaser during the interim period.

effective date vs. Closing dateA contract is formed the moment the parties have agreed to the

essential elements, such as object and price. If a formal writ-

ten agreement is subsequently drafted, parties are entitled to

have the contract made effective from the time it was formed.2

In typical A&D transactions, the effective date is the date which

the parties intend that the revenues from the properties, which

are the subject of the transaction, are to belong to the purchaser

and the purchaser is to also bear the burdens of the ownership of

such revenue and properties from such date. The closing date, on

the other hand, is the date on which the transaction closes (i.e.

final execution of the closing documentation conveying the prop-

erties which are the subject of the transaction).

transfer of Beneficial ownershipTypically, for income tax purposes, the key date for a transac-

tion will be the date on which the purchaser acquires beneficial

ownership of the property.3

The concept of beneficial

ownership refers to rights in the

property which are normally

associated with true owner-

ship, as distinct from registered

legal ownership. Black’s Law

Dictionary defines “beneficial

owner” as one who is recog-

nized as the owner because use

and title belongs to that person,

even though legal or registered title may belong to someone else.4

If on a particular date all the essential elements were agreed upon

and the purchaser became the true beneficial owner of the prop-

erty, then that date will be respected as the effective date of the

transaction for tax purposes.5

In an Interpretation Bulletin (“IT Bulletin”), the Canada

Revenue Agency (the “CRA”) stated that possession, use and risk

are the primary attributes of beneficial ownership. The CRA went

on to state that strong indicators of beneficial ownership include

(i) physical or constructive possession; (ii) entitlement to income

from the property; (iii) assumption of responsibility for insur-

ance coverage; and (iv) commencement of liability for interest on

purchaser’s debt that forms a part of the sale price.6

In the same IT Bulletin, the CRA provided the following expla-

nation as to the time of entitlement:

…the sale price of any property sold is brought into account

for income tax purposes when the vendor has an absolute

but not necessarily immediate right to be paid. As long as

a “condition precedent” remains unsatisfied, a vendor does

not have an absolute right to be paid. However, the fact that

an event subsequent to the completion of a sale restores the

ownership of the property involved to the vendor or adjusts

the sale price does not alter the fact that the vendor was

at a particular time entitled to the sale price and therefore

disposed of the property for tax purposes at that time.7

INTRODuCTION

it is Common for oil and Gas transaCtions to Be

arranGed so tHat tHe PurCHaser enjoYs tHe Benefits

of ownersHiP as and from an “effeCtive date”, tHat

is Before tHe date tHe transaCtion is ComPleted (tHe

“ClosinG date”).

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Generally speaking, if the purchase and sale agreement is

absolute and the indices of ownership of the property including

possession, use and risk pass to the purchaser on the effective

date, the CRA will accept that date as the disposition date to the

seller, and the acquisition date to the purchaser for tax purposes.8

It is, however, not typical in an A&D transaction for possession

or ownership to transfer on the effective date. Usually, physical

or constructive possession and assumption of responsibility for

insurance coverage (i.e. risk) transfer on the closing date while

entitlement to income from the property and the liability for inter-

est on the purchase price transfers at the effective date.9

In situations where the purchase and sale agreement contains

a “condition precedent” which must be met prior to beneficial

ownership being transferred, then the CRA’s position is that there

has been no disposition/acquisition until the condition precedent

has been satisfied. For example, if an A&D transaction is condi-

tional upon the purchaser being satisfied with the title of the

vendor to the properties, then the CRA will likely not recognize

the earlier effective date as being the date of the transaction.

In response to a question regarding allocation of income where a

condition precedent exists, the CRA stated that because the trans-

fer does not occur, for tax purposes, until the condition precedent

is satisfied, income arising prior to the transfer belongs to the

vendor. On the other hand, if the vendor is entitled to payment

for the property and beneficial ownership has been transferred to

the purchaser, then any income earned in the interim period will

be for the purchaser’s account.10

who bears the burden?In 1994, a hypothetical situation was put forth to the CRA in which

a purchase and sale agreement specified both an effective date

and a closing date. The beneficial ownership and assumption of

liabilities were passed to the purchaser on the effective date with

the exception of a few minor liabilities which were to be passed

on the closing date. There were no conditions precedent to be

satisfied except the usual due diligence and the completion of the

appropriate documentation.

The CRA’s response was that the transfer was not legally

effective until the closing date even though beneficial owner-

ship had been transferred, and therefore the vendor was legally

liable to report the income during the interim period. However,

in its response, the CRA did acknowledge instances where it had

accepted that the transfer occurred on the effective date because

(i) both parties to the transaction agreed that the effective date

should be used; and (ii) there were no significant tax benefits aris-

ing from the use of this date.11

By their nature, A&D transactions are conditional until clos-

ing.12 The CRA’s position with respect to A&D transactions remains

consistent with its position laid out above but it seems to allow

for exceptions in short-cycle transactions (where the effective

date and the closing date are within the same calendar month).

In addition to being a short-cycle transaction, if the amounts are

minor and there are no significant tax benefits to either party, the

CRA allows the effective date to be used as the transaction date

for tax purposes.13 This exception is made for A&D transactions

notwithstanding the fact that beneficial ownership of the assets

may not pass to the purchaser as of the effective date.14

There is a risk in relying on the CRA rulings and IT-Bulletins

as they are not binding. In situations where the CRA views the

interim period to be lengthy, the risk of the CRA challenging the

post-effective date allocation of income is increased. To minimize

the risk of a CRA challenge in these circumstances, the parties

… if commercially feasible in the transaction, the parties should keep the

time between the effective date and the closing date as close as possible

(preferably within the same calendar month).

Rockford Land Ltd.➣ Alberta Crown Sales

➣ Freehold Mineral Acquisitions

➣ Surface Acquisitions

Scott Clapperton

rockfordland@shaw.ca

Suite 119, 2526 Battleford Ave SW Calgary, Alberta T3E 7J4 287-3500

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should ensure that the written agreement clearly stipulates their

intentions with respect to ownership of the property and alloca-

tion of income and liabilities during the interim period, and if

commercially feasible in the transaction, the parties should keep

the time between the effective date and the closing date as close

as possible (preferably within the same calendar month). m

notes1. The authors would like to thank Patrick W. Burgess for his

contribution.

2. Marie-Pierre Allard, “Retroactive Effect of Conditional Obli-

gations in Tax Law,” (2001) vol. 49, no. 6 Canadian Tax Journal, 1751.

3. D. Blair Nixon and Sandra E. Jack, “The Deal: The Price Tag &

Adjustment Mechanisms” Report of Proceedings of Fifty-Second

Tax Conference, 2000 Tax Conference (Toronto: Canadian Tax

Foundation, 2001), at 11:6.

4. Black’s Law Dictionary, 8th ed., s.v. “beneficial owner”.

5. M.N.R., CRA Views 96161800, “Effective date and closing date” (9

May 1996).

6. M.N.R., Interpretation Bulletin IT-170R, “Sale of Property –

When Included in Income Computation” (25 August 1980) at

para. 8.

7. Ibid at para. 5.

8. Supra note 6.

9. However, we note the provisions of Clause 3.02 of the 2000 CAPL

Property Transfer Procedure, which states that the “transfer of

the Assets from the Transferor to the Transferee and the assump-

tion of the benefits, obligations and risks associated with the

Assets by the Transferee will be effective as of the Effective Date,

provided Closing occurs. As between the Parties, possession of

the Assets, however, will not pass to the Transferee until Closing.”

The annotations regarding this Clause state that “[t]he provision

was structured to link risk to the Effective Date because: (a) it

matched revenues with risk; (b) the Transferee has a high degree

of influence on operational decisions under Article 5.00; (c) the

Transferee is protected by the “No Substantial Damage” condi-

tion in Clause 10.02; and (d) it encourages the parties to select the

Effective Date on a current basis.” With respect to the authors of

those annotations, it is the experience of this firm that risk and

possession are linked, and both pass at Closing.

10. “Revenue Canada Round Table,” in Report of Proceedings of the Forty-

Third Tax Conference, 1991 conference Report (Toronto: Canadian

Tax Foundation, 1992) 50: 24-25.

11. M.N.R., CRA Views 9418865, “Effective date vs. closing date”

(22 December 1994).

12. Jim MacLean, “CAPL Property Transfer Procedure Update”

The Negotiator (May 2001) 16.

13. Ibid at 19.

14. Supra note 3 at 11:15.

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Be Careful wHat You wisH for. This

was the first thought that popped into my head

after reading the Alberta Court of Queen’s Bench,

Master’s decision in Desoto Resources Ltd. v. EnCana

Corp. (2009 CarswellAlta 818).

The case deals with EnCana’s lapse proceeding

against caveats filed by Desoto on EnCana’s fee

simple mineral title. Very common and straight

forward process. EnCana sends a Notice to Take

Proceeding on Caveat to Desoto. Desoto then filed

a statement of claim to defend its caveat (and

therefore the underlying lease).

The kicker comes from how the court inter-

preted the text of the habendum clause in the

lease. The clause reads as follows:

From a Well on the Lands at the End of the Primary Terma unique Court interpretation of a freehold lease Habendum Clause

written BY

PAuL NEGENMANenerlaw

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The Lessor, for the initial consideration paid by to the

Lessor by the Lessee … DOES HEREBY GRANT AND

LEASE … the leased substances … for the primary term

and so long thereafter as any of the leased substances is being

produced or is capable of production in paying quantities from

a well or wells on the said lands at the end of the primary

term, but subject to sooner termination as provided

in this lease; provided that if at the expiration of the

primary term each well drilled on the said lands by the

Lessee is abandoned and the Lessee is then drilling a

further well on the said lands for the leased substances,

this Lease shall remain in force so long as such drill-

ing is diligently and continuously prosecuted and so

long thereafter as any of the leased substances is being

produced or is capable of production in paying quantities

from the said lands from the well so drilled (paragraph

23. Emphasis mine)

This is not uncommon wording. Most of my time, and most prior

court decisions, deal with determining if wells on the lands are

“capable of production in paying quantities”. I must admit I had

not put very much thought into the bolded text that follows.

That bolded text qualifies the prior italicized wording and requires

that only production “from a well or wells on the said lands at the end

of the primary term” will continue the lease.

Think about those words again for a minute. I mean, really,

really think about them. This wording literally means that the only

wells that can continue the lease are those wells drilled during the

primary term. The only wiggle room comes from the proviso at

the end of the clause that allows for certain wells drilled over the

primary term to be included as continuation wells.

The court very succinctly summarizes this view by stating:

27 Whether or not the Lands are capable of produc-

tion in paying quantities, the plain terms of the Leases

require that the production be from a well or wells drilled

during the primary term. A well drilled in 2007 cannot

operate to satisfy this requirement.

the new well ProblemThe obvious problem for industry with this interpretation of the

lease is that is does not allow for lease continuation by wells

drilled after the primary term. This is a deal stopper if you are

considering drilling new wells on this form of lease and then

abandoning the old wells. Think infill drilling. Think new fangled

horizontal wells on old leases.

Under a traditional “capable of production in paying quan-

tities” test, you are ok so long as you continue to produce the

old well until the new well is on production. Simple strategy.

Simple risk management process.

However, under this new interpretation, your new well will

never be able to continue the lease. You lease simply cannot be

continued by production from wells drilled after the primary term.

Never ever.

Holy crap. This is what I mean by being careful what you wish

for. I never really thought a court would interpret this text literally.

I am constantly blathering on about how important it is for courts

to stop trying to interpret the intention of the parties to leases

and to avoid results based reasoning. Just read the darn words

I bellow. We will all be much better off it we just read the words

and leave it at that. Certainty is the holy grail of lease interpretation.

Fairness just screws everything up.

Well don’t I look foolish. I can’t argue with the court’s strict

interpretation of the words in the lease. Once you really read the

words, it is what they say. The only way to challenge this interpre-

tation is to start yelping about how this could not possibly be what

the parties intended, or that the result is to harsh or unjust. This is

hippy socialist speak that I cannot bring myself to utter.

summary judgmentJust a note that this case was an application by EnCana for

summary judgment against Desoto. Summary judgment is a

somewhat unusual remedy that allows the court to make a final

decision in a matter without having a full trial. Summary judg-

ment will only be granted where the court decides that “… there is

no genuine issue of material fact requiring trial.” (paragraph 20).

The obvious problem for industry with this interpretation of the lease

is that is does not allow for lease continuation by wells drilled after the

primary term. This is a deal stopper if you are considering drilling new

wells on this form of lease and then abandoning the old wells. Think

infill drilling. Think new fangled horizontal wells on old leases.

E L E X C OG R O U P

Elexco Ltd.Tel: 1-800-265-1160Local: (519) 686-0470Fax: (519) 686-9088557 Southdale Road EastSuite 101London, OntarioCanada N6E 1A2Jack Norman, PresidentDale Norman, Land Manager

Elexco Land Services, Inc.

Tel: (716) 372-0788Fax: (716) 372-0515PO Box 383505 W. Henley StreetOlean, New YorkUSA 14760Randall Hansen, CPL, PresidentJack Norman, Vice President

Elexco Land Services, Inc.

Tel: (810) 364-7940Fax: (810) 364-8120PO Box 313106 Huron Blvd., Suite AMarysville, MichiganUSA 48040Randall Hansen, CPL, PresidentPaul Boyce, Land Manager

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For our purposes, a summary judgment application is material

in that the decision is made by a “Master”, which is a special class

of judge that is just below a Queen’s Bench justice. The decision

therefore may have slightly less precedent value than a decision

by a full Court of Queen’s Bench Justice.

Caution appeal by trial de novoAlso important is that this decision is currently under appeal.

The latest ruling I could locate was a September 9, 2009 prelimi-

nary ruling on some procedural matters (see Desoto Resources Ltd.

v. EnCana Corp., 2009 CarswellAlta 1376). This ruling is interest-

ing in that it confirms that the appeal to a Justice of the Court of

Queen’s Bench will be a de novo hearing. This is just fancy Latin

meaning lets start all over again. For us this means that the next

court may not agree with the Master’s decision above and is not

really bound by the Master’s reasoning.

Continuing the desoto erCB sagaOh yeah, you may remember Desoto from my May 2009 article

“Is the Board Bored?” which dealt with the ERCB decision regard-

ing the validity of this exact same cursed freehold lease in the

context of the ERCB’s jurisdiction to grant and revoke well licences

in Alberta. How can this be you say? The ERCB already found that

the lease was dead and terminated the well licence, what more

could a court decide?

Well, as I ranted on ad nauseam in my prior article, an ERCB

decision on the well licence issue cannot bind a court when it

deals with a separate action dealing with the lease. The court in

the current case makes note of the ERCB decision, but then starts

over again, as it should. Nuff said. No use beating a dead horse.

Ok, maybe just a few whacks. The court totally starts over and

comes to a completely different rational as to why lease is dead.

Totally different. Totally. The ERCB goes on and on about what it

really means for a well to be capable of production. Never looks at

when the well was drilled. The current court decision deals strictly

with when the well was drilled and does not even consider the

capable of production issues. Arrrgghh.

As a poor oil and gas solicitor I am now left with two sets of

reasoning on the same lease wording depending in which forum

the lease is challenged in. One set of reasoning applies to the ERCB.

A different set to the courts. Plus the court decision is currently

under appeal by a trial de novo. I am not complaining (much), but

this makes my job quite difficult. All I ask is that my clients try to

remember just how screwed up this single clause in one form of

lease has gotten the next time you call with a “real simple lease

question”. I should have been an engineer. m

The court totally starts over and comes to a completely different rational

as to why lease is dead. Totally different. Totally. The ERCB goes on and

on about what it really means for a well to be capable of production.

Never looks at the when the well was drilled. The current court decision

deals strictly with when the well was drilled and does not even consider

the capable of production issues.

Since 1999, in the regulatory consultation and land business, our team’s contributions have been integral in helping our clients get...

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toll free: 1.877.998.1500 | www.integrityland.com

Delivering Exceptional Land Servicesto Our Valued Clients Since 1999

negotiator ad feb cmyk 2/3/10 12:29 PM Page 1

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The Plight of the Income TrustConversion Considerations and deadlines

muCH Has Been written aBout tHe PliGHt of tHe Canadian inCome trust. At the height of the income

trust boom in 2006, there were more than 250 publicly-traded

income trusts in Canada with a total market capitalization of in

excess of $200 billion. As at December 31, 2009, approximately

160 income trusts were left with a total market capitalization of

approximately $130 billion. Of these, 18 were energy trusts and

alone accounted for just over $55 billion of the total market capi-

talization of all income trusts.

Adverse tax changes, market meltdown and economic reces-

sion have all contributed to the precarious situation in which

many income trusts have found themselves and all income trusts

face difficult decisions as to the future, including whether or not

to convert to a corporation.

Though management and trustees of income trusts will, by now,

have considered conversion and other alternatives, many deferred

making a final decision until closer to the end of 2010 in the face

of poor economic and market conditions. Now, as the December 31,

2010 deadline for the end of the tax holiday on income distributions

draws close, the pace of conversions will significantly pick up.

BackgroundIncome trust structures typically involve the operating business

being held in a limited partnership or corporation, with the trust

owning the equity in the operating entity either directly, or indi-

rectly, through one or more flow-through entities.

The tax changes announced in October 2006, which will

prevent income trusts (other than certain qualifying real estate

investments trusts) from continuing to deduct income distri-

butions for tax purposes, will become effective on January 1,

2011. Since the introduction of tax legislation in July 2008 (since

enacted in March 2009) to facilitate tax-deferred conversions,

approximately 30 income trusts have converted to corporations.

This includes a number of energy trusts which converted to corpo-

rations, such as Bonterra Income Trust (November 2008), Crescent

Point Energy Trust (July 2009), Advantage Energy Income Fund

(July 2009) and True Energy Trust (November 2009).

Some income trusts converted prior to the introduction of the

tax legislation facilitating conversions, and many more were the

targets in acquisitions when the mergers and acquisitions market

was active and market prices for trust units were depressed as a

result of the Government’s announced tax changes.

The objective of the conversion is to substitute shares in a

listed corporation for outstanding units of the income trust on

a tax deferred basis and, typically, to also collapse the former

income trust structure to simplify operations from a commercial

and tax point of view.

deadline for Conversion decisionPublicly-traded income trusts in existence on October 31, 2006

can continue to enjoy the tax-free holiday on income distributed

to unitholders until the end of 2010 provided that the “normal

growth” guidelines are not exceeded. After that time, the effec-

tive rate of tax for these trusts will approximate that applicable

to corporations and income will, effectively, be distributed to

unitholders as dividends.

The tax conversion rules permit these trusts to convert to

corporations on a tax-deferred basis at any time up to the end

of 2012 and, depending upon the conversion method selected, to

transfer the tax attributes of the income trust to the new corpo-

ration. Depending upon a trust’s particular tax situation, it may

defer a conversion decision until the end of 2012 if the impact

of the tax change during the preceding two-year period is not

expected to be material.

alternatives availableThere are many considerations to be taken into account in deter-

mining whether to convert ahead of the December 31, 2010 deadline,

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100, 4124 9th Street SE, Calgary AB

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the most important question being whether the non-tax benefits of

immediate conversion outweigh the benefit to the income trust of the

rapidly diminishing tax holiday until December 31, 2010. However,

depending upon the income trust’s business strategy, financial and

market outlook and other considerations, there may be other more

attractive alternatives to conversion, such as putting the income

trust up for sale, merging with another income trust, being taken

private by a significant unitholder or a management-led buy-out,

converting to a U.S. master limited partnership if there are significant

U.S. unitholders or assets, or “staying the course” and restructuring

to achieve tax efficiency prior to 2011.

Deciding whether to convert from an income trust to a corpo-

ration, and the most appropriate timing for doing so, is complex.

Management and trustees of an income trust must consider a

number of factors, particularly strategic, tax, financial, market and

legal considerations. In doing so, the trustees must keep the best

interests of the trust (including consideration of the interests of

unitholders and other stakeholders) top of mind.

Convert nowKey reasons for implementing a conversion now rather than wait-

ing until closer to the end of 2010 include:

If the income trust wants to grow through acquisitions: • the income

trust’s tax holiday on income distributions will immediately

terminate if the trust exceeds the “normal growth” guidelines;

as well, if the trust wants to fund acquisitions through the issue

of its own securities, shares of a corporation may be more highly

valued than trust units as financial performance of shares may

be more easily valued relative to corporate industry peers and

selling shareholders of the acquired entity could receive tax-

deferred rollover treatment if paid in shares.

If the income trust wants to grow organically:• the “normal

growth” guidelines restrict capital-raising efforts, which could

be problematic for capital intensive industries.

If the income trust will reduce or suspend distributions: •

if distributions have been or will be reduced or suspended

because of liquidity problems or because the trust plans to

reinvest income in acquisitions or other expenditures, the loss

of the tax holiday may not be a concern. Reducing or suspend-

ing distributions often significantly impacts the market price

of an income trust’s units since its investors are typically yield-

focused; however, the certainty of conversion may be attractive

to new financers or investors.

If the income trust has an increasing number of foreign investors •

or needs access to foreign capital: the trust (other than certain

trusts in the energy sector) will not be able to maintain its

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advantageous tax status as a “mutual fund trust” if it is consid-

ered to be established or maintained primarily for the benefit

of non-residents. Most trusts have provisions in their governing

documents restricting non-residents from owning 50 percent or

more of the outstanding units.

• If conversion will have a tax neutral effect until end of 2010:

if the income trust has other bases on which to reduce

its taxable income (such as tax depreciation, tax pools, tax

losses, resource expenses and undeducted financing expenses),

then early termination of the trust’s tax holiday may not be

adverse. The income trust may be able to return capital rather

than distribute income, such as through the use of resource

expenses, thereby avoiding the tax on distributions.

wait and seeReasons an income trust may defer conversion until closer to the

end of 2010, apart from losing the tax holiday, include:

If the income trust does not want to be a take-over target: •

the potential for churn in an income trust’s units on announce-

ment of conversion, and the resulting market price drop, will

make the trust a more attractive take-over target.

If sale of the income trust or merger is a more desirable alter-•

native: deferring a conversion decision until the end of 2010

(or even until 2012) may see the benefit of increased M&A activ-

ity; a merger transaction with another trust will not normally be

considered growth terminating the tax holiday.

However, given the lead time required to implement a conversion,

which typically also requires a unitholder meeting to be held to

approve of the transaction, a decision to proceed with a conver-

sion should be made by mid-2010.

stay the CourseIf there are no significant benefits to conversion, an income trust

might stay the course and not convert, but structure its affairs to

remain as tax efficient as possible. However, in making such deci-

sion the trust must consider:

The end of the transitional tax conversion rules on December 31, •

2012: not converting to a corporation by the end of 2012 may

significantly impair the ability of the income trust to structure

a future conversion on a tax neutral basis and will result in

forfeiting the ability to transfer certain tax attributes to the

new corporation.

Complexity and cost:• the cost of restructuring to improve tax

efficiency, as well as the administrative cost and burden of

maintaining the income trust structure.

the road aheadExpect the number of publicly-traded income trusts to fall at an

increasingly faster rate as 2011 approaches. Much of this will be

the result of conversions to corporations. Energy trusts which

have announced their intention to convert include Arc Energy

Trust, Daylight Resources Energy Trust and Vermillion Energy

Trust. However, as the warming trend in the mergers and acquisi-

tions market continues, together with gradual improvement in

credit markets, expect also to see acquisitions of income trusts

increase. There is no doubt that the income trust is becoming an

endangered species in Canada. m

Kathleen L. Keller-Hobson, Partner, Bennett Jones LLP

© Bennett Jones LLP/All Rights Reserved

Kathleen Keller-Hobson is a partner in the Toronto

office of Bennett Jones LLP who practices in the

mergers and acquisitions and corporate finance areas.

The author acknowledges the assistance of Russel

Drew, an associate in the Toronto office of Bennett

Jones LLP, in the preparation of this article.

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dear CaPl members:in tHis, mY tHird artiCle aBout tHe 2010 CaPl ConferenCe, I continue the release of significant tidbits

of information as they are developed by

my committee Chairmen and their hard-

working volunteers.

ProgramThe Program committee will beef up

the educational offerings at this year’s

Conference. We will continue the practice

of offering seminars on Sunday morn-

ing and afternoon prior to the Opening

Reception on Sunday night. These have

been very popular and well attended

over the past few years. This year we are

also going to offer seminars on Tuesday.

We understand that some of our dele-

gates may have had trouble in the past

getting activities funded and in addi-

tion, some of our members may be in

need of educational credit for profes-

sional re-certification purposes. We will then be trying to look

after some of these concerns by offering seminars on Tuesday.

This beefed up program may also help

senior management in some compa-

nies approve Conference funding for

members in their land departments

who want to go to Kelowna.

Last month we reported that econo-

mist and author, Jeff Rubin will be

a keynote speaker at our Conference.

This month I am excited to report

to you that Dave Horn’s group has

signed up Brian McKeever as a motiva-

tional speaker. I am writing this article

in early February but when you read

this you will be very familiar with

this incredible man. He is a legally

blind Olympic and Para-Olympic skier.

Mr. McKeever’s story is a story of resil-

iency, and, of course, resiliency is our

Conference theme.

finance and marketingI am very pleased to report that a number

of companies that could not attend last

year’s Conference have committed to support the 2010 edition.

These companies have pledged delegate attendance and renewed

2010 Kelowna Conference Update

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sponsorship support. We are happy to have everyone back that could

not come last year and most pleased that some brand new individu-

als and companies will be with us for the first time in 2010.

We are ahead of the budget on a number of budget items and

can confirm that we even got some free stuff! Our beautiful logo

was designed and contributed by Ms. Claire Ouchi at no cost to

the CAPL. Mary Lou Ediger and Cathy Armstrong get kudos for that

achievement.

administrationI promised to provide you with the means to book your rooms at

the Delta Grand Okanagan and below is the URL that will take you

directly to CAPL’s registration page. http://www.deltagrandoka-

nagan.com/g912petr. This will also soon be available on the CAPL

website.

activitiesJeff Leitl and his group have been working closely with onsite and

offsite venues to put together something of interest to all of our

potential delegates. At this time I can confirm that our golf tourna-

ment will be held at the Harvest Golf Club in Kelowna. If you have

not played the course you can check it out at www.harvestgolf.com.

Greg Meidinger was in charge of negotiations on the golf package

and he did a wonderful job of ensuring us a great golf experience

at a fantastic value.

Thanks to all of the volunteers that have already contributed

so much time to this endeavour. Please stay tuned. m

Jim Moore

2010 Conference Chairman

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Board Briefsthe key issues discussed at the

CaPl Board of directors’ meeting

held february 2, 2010 at the

CaPl office were as follows:

In Attendance Absent Guest

G. Boogmans J. McKnight M. Ariss Denise Grieve

J. Condon R. Telford S. Jackson

J. Covey R. Thorsen F. Terner

D. Dalik J. Tweten

K. Gummo R. Van den Bon

Jim Condon presented a Treasurer’s Report as at January 31, •

2010 showing CAPL investments totalling $528,728.08 Canadian

and $38,009.80 U.S. along with a cash balance of $154,679.70

Canadian and $2,756.87 U.S. The CAPL Scholarship Fund has a

balance of $234,919.88. There were no transfers made since the

last report. There was $4,387.21 interest earned in 2009 in the

T.Bill Account and $255.85 interest earned in the Scholarship

Trust Fund Account. Jim Condon also advised that the Board

Briefs, which are included in The Negotiator each month, will

also be emailed to each Committee Chair to ensure that these

individuals are apprised in a timely fashion, and thus able to

communicate to their committees, regarding Board decisions

on financial and other relevant matters.

Gloria Boogmans presented one student, four active and three •

associate membership applications to the Board of Directors,

which were approved. In addition to the above, one member

was approved to change from an Active to Senior member.

Vince Boden was approved by the Board of Directors for •

the position of CAPL’s External Liaison for the Reclamation,

Remediation and Abandonment Task Team. As part of an

Alberta Government Cross Ministry Initiative, the Task Team

has been established to develop draft recommendations for

regulatory changes related to the timely remediation, abandon-

ment and reclamation of wellsites and related surface facilities.

This position is a two year term reporting directly to the CAPL

Field Acquisition and Management Chair.

Robin Thorsen, Director of Public Relations, provided the follow-•

ing information:

The Committee has evaluated alternate advertising oppor-•

tunities to the Alberta Beef insert used over the past several

years. In 2010 we will be using various publications to reach a

wider audience of readers and at a reduced cost.

The Committee is in the process of preparing the CAPL 2009 •

Annual Report and all Directors will be contacted for their

information.

Robyn Van den Bon, Director of Professionalism, provided the •

following update:

The following members recently wrote and passed the •

Professional examination:

Amy Gowertz, P.Land

Monte Hurt, PSL

The revised Professionalism Manual will be available in •

February. Current P.Land and PSL members will be contacted

to pick up their complimentary copy from the CAPL office.

Applicants for the P.Land and PSL designation whose appli-•

cations are received in the CAPL office by April 1, 2010

may choose to write either the new or old examination.

Individuals who submit their applications after that date will

be required to write the new examination, scheduled to be

ready in September, 2010.

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Jan McKnight, Director of Education, advised that the Committee •

is working with the Conference Committee on courses to be

offered at the 2010 Conference in Kelowna.

Rob Telford advised that the deadline for nominations for the •

2010/11 Elections is March 15, 2010 (30 days prior to the April

15, 2010 Annual General Meeting and Elections). To date, the

Nominating Committee has several candidates that have put

their name forward.

In Frank Terner’s absence, Dalton Dalik advised that a PNG •

Information Exchange will be held April 22, 2010 at the Telus

Convention Centre. The CAPL and CAPLA will co-host the

event and the CAPL will be handling all administrative duties.

Additional information will be available on our website and in

The Negotiator.

Gloria Boogmans, Director of Member Services, advised that •

as of February 1, there were approximately 400 members that

had not yet paid their annual 2010 membership dues (which

were due December 31, 2009). After discussion, it was agreed

that members that have not paid their dues will have no access

to the members’ section on the CAPL website and will also be

charged a collection fee of 15% (as per the CAPL By-Laws Article

11.3). Once the member has paid their membership and collec-

tion fee, access to the members’ section will be reinstated.

Ken Gummo advised that Olds College will be holding a recep-•

tion on Thursday, March 25, 2010 at the Fairmont Palliser

Hotel for students from the Land Agent/Land Administration

Programs. Ken encouraged all Directors to attend the event and

noted that he will be addressing the students at the reception.

The Board endorsed Chris Bartole as the 2011 Conference •

Chairman.

Ken Gummo reminded Directors of the following:•

The next Board of Directors’ Meeting will be held March 2, •

2010 at the CAPL office.

The next General Meeting is a luncheon on Wednesday, •

February 24, at The Westin Calgary. The guest speaker will

be Morris Seiferling, Stewardship Commissioner for the Land

Use Secretariat. m

John Covey

Secretary/Director, Social

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celebrating 25 years 1984-2009

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Thirteenth Annual CAPL 9–Ball Pool TournamenttHe tHirteentH annual CaPl 9–Ball Pool tour­nament will be held at the Garage in Eau Claire Market on

Thursday, May 6th, 2010 beginning at 4:45 pm.

9–Ball is a game where luck plays a very big role, so come out and

test your luck with your fellow CAPL members. All levels of players

are welcome to participate and team pairings are designed to mini-

mize any requirement for talent. Non-playing spectators are also

welcomed and heckling is encouraged and completely acceptable.

The format will be assigned teams of two players and all are

guaranteed at least two best of three matches. We anticipate over

60 players and a variety of prizes for surviving teams as well as for

others through random draws. The entry fee is $40 (GST included)

and, given the historically high level of interest in this event, we

suggest you submit your entry as soon as possible.

The deadline for entries is April 29th, 2010 and forms are

included in The Negotiator. Sponsorships are welcome and incen-

tives are provided for sponsors. Details may be obtained from any

member of the Pool Committee. m

Harry Ediger 515-5554 harrye@stormexploration.com

R.K. Howard 999-2136 rk8@shaw.ca

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Murray Wade 232-7021 murray.wade@dvn.com

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Message From the Executive

CommuniCation, tHe exCHanGe of information, and teCH­noloGY sHould Go Hand in Hand. The modern world is

constantly striving for faster, more

efficient, more effective communica-

tion. Just look at how effective we’ve

become at keeping in touch: we have landlines, cell phones,

better yet BlackBerrys and iPhones, text messaging, instant

messaging, emails, faxes, Facebook, Twitter, and, oh yes, good

old in person, face to face conversation.

As quickly as we move forward with technology, the more

quickly it seems to evolve, what seems cutting edge today, is

outdated tomorrow. With so much new information and technol-

ogy available how do you determine what is relevant to the needs

of an organization such as the CAPL?

The CAPL membership is over 1700 strong and very diverse.

With that diversity come varying degrees of appreciation for

technology. For some, just turning the computer on and navigat-

ing the internet is trouble enough. For others, “Cloud Computing”

is on the next horizon. Keeping this broad spectrum in mind, the

Technology Committee is developing a number of initiatives that

will keep the CAPL membership informed and technologically

savvy, but won’t leave anyone behind. Some of these initiatives are

already in the early stages of development. For example, the new

CAPL website; which can become multi-purpose, with all the tools

and technology the “techies” can handle, while at the same time

maintaining a user friendly, intuitive platform that all members

can easily navigate.

While the website is the most obvious of these initiatives, it is

not the sole focus of the Technology Committee. The Committee

is researching ideas that will improve other procedures and

processes and is always looking for new ideas.

Hopefully, by now, you have had an opportunity to view and use

the new CAPL homepage. If not, please take a few minutes to do so.

CAPL members, it is your website; should you have any questions,

comments or suggestions about the website, please contact me

directly at sally.jackson@dvn.com and give me your feedback. m

Sally Jackson

Director, Technology

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Message From the Executive

tHe Business develoPment Portfolio manaGes all Current CaPl PreCedent doCuments, working with the

various committees to develop new

precedent documents as well as update

current documents. Our mandate also

includes government liaison on a wide variety of initiatives, includ-

ing the P&NG Information Exchange each year involving Alberta,

British Columbia and Saskatchewan. The area of government and

regulatory liaison has been especially interesting with initiatives

such as shallow rights reversion, BC DL reform, to name but a few.

I can’t recall a time in recent memory when CAPL has been

presented with more opportunities to participate in direct consul-

tation with governments, at all levels, in the development of

legislation, regulation and policy. These relationships are based

upon trust, respect and agreed objectives/principles that form the

basis of conversations for change.

accomplishmentsThe 2009 Petroleum Information Exchange was well attended.

Many thanks to the organizing committee, consisting of CAPLA

and CAPL members, who made this event a success. Alberta

featured its Energy Strategy, Land-use Framework, FH Mineral

Tax, and ERCB’s – Licence Liability Rating Program. Saskatchewan

focused on ISC title developments, Petroleum Tenure Branch

changes, and well/facility liability management.

Revisions to the BC Drilling Licence Regulations were completed

and subsequently implemented during the summer. By and large

we successfully advanced our goal of creating a “best in class” DL

regulatory process for oil and gas activities in British Columbia.

That said, the need for tenure reform has become clearer as P&NG

play types rapidly evolve from conventional to unconventional.

Work continues on redrafting the CAPL Farmout and Royalty

Procedure, with more to follow...

Redrafting continues on the CAPL Freehold P&NG Lease.

This project has become more complicated in light of an unprec-

edented ERCB decision wherein they attempted to establish the

validity of a Freehold P&NG Lease. As the ERCB decision is the

subject of an appeal, it is hoped that the Courts will provide clarity

as to the criteria for establishing validity of freehold leases, as well

as the ERCB’s role in making these determinations.

looking aheadWork is progressing well on the 2010 Petroleum Information

Exchange. Commitments from Alberta Energy, ERCB, BC MEMPR

and Saskatchewan promise to make this years Information

Exchange both exciting and informative.

The BC MEMPR has invited CAPL and other industry groups

to participate in an extensive Tenure Review process which will

review selected sections of the BC Petroleum and Natural Gas

Act and related Regulations. This will commence with a one-day

opportunity framing meeting to be held the first week of February,

and is expected to take some 20 months to complete.

You will recall that, effective January 1, 2009, Shallow Rights

Reversion legislation was introduced in Alberta. Alberta Energy

will be presenting an Information Letter as to how and when the

affected leases will be reviewed. The final plan includes details

on timelines along with how shallow rights reversion will apply to

new agreements as well as existing agreements. More to come …

Alberta Energy has commenced a two year Tenure Re-Engineering

Initiative focusing on the Mines and Minerals Act. The intent of this

review is to look for efficiencies for both industry and government.

Alberta Energy requested a special meeting with representatives

from CAPL and other industry groups, to consider possible amend-

ments to the Alberta Mines and Mineral Act.

Alberta Energy’s CCS Tenure Implementation Committee is

developing a process to grant the use of pore space (rights) for

the purpose of carbon dioxide (CO2) disposal. Industry consulta-

tion will occur through the Tenure Industry Advisory Committee

where CAPL is well represented.

Alberta Energy is also revisiting Oil Sands Tenure Legislation,

Regulations and Policies with industry representatives.

Alberta has struck a Task Force for Alberta Remediation,

Abandonment and Reclamation. Comprised of representatives

from Alberta Energy, ERCB, Alberta Environment, ASRD, and CAPL

as well as other industry groups, the mandate of this Task Force

is to consider the timeliness of wells that have been suspended,

abandoned or are waiting final reclamation certification.

To accommodate E-Tenure, Saskatchewan is proposing amend-

ments to The Crown Minerals Act. This bill is now available for

viewing on the Legislature of Saskatchewan web site (www.legas-

sembly.sk.ca <http://www.legassembly.sk.ca>.) The direct link to Bill

125 is <http://www.legassembly.sk.ca/bills/pdfs/3_26/bill-125.pdf>

With the large number of initiatives currently underway, it

is essential that CAPL be well represented with energetic, dedi-

cated people who have strong communication skills, a spirit of

volunteerism, commitment and professionalism. We thank those

already involved. If you have an interest in participating in one of

these initiatives, please contact me or the CAPL office. m

Frank Terner, P. Land

Director, Business Development

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Get Smartthe CaPl education Committee is pleased to present the following courses:

Understanding Natural Gas And Crude Oil Marketing

march 2, 2010 8:30 a.m. to 4:30 p.m.

This seminar is designed for industry personnel who want an

overview of the fundamentals of gas marketing. The seminar

will begin with a brief discussion of the history of gas marketing

and some of the more commonly used industry terminology and

methods of measurement. It will cover the North American supply

and demand picture including new areas of exploration and

the demand growth forecasts driven by new power generation.

The course will review the transportation of natural gas and how

to devaluate new pipelines and pipeline space. The course will

then examine the fundamentals of natural gas pricing, storage

and the basics of risk management. The second part of the course

will cover crude oil marketing and conventional crude qualities.

The instructor will touch on supply, pricing, and market factors as

it related to Canadian crude.

2007 CAPL Operating Procedure

march 4, 2010 8:30 a.m. to 4:30 p.m.

This one day course is an overview of the 2007 CAPL Operating

Procedure focused specifically on the changes between the

1990 and the new document. It is meant to enable personnel

to appreciate substantive differences between the 1990 and the

2007 documents. All experience levels are welcome but it should

be noted that the course will not be focused on the basics of the

operating procedure.

Constructive Conflict Management (PSL)

march 9, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for individuals who deal with conflict in

the workplace on a regular basis and require a platform to better

deal with it. The instructor will discuss how and why conflict

occurs in the workplace and discuss solutions for dealing with it

and avoiding it in the future. Topics will include professionalism,

defusing angry and aggressive subjects, and understanding why

people act as they do during conflicts. Both presentations and

interactive discussion will be used throughout the course to help

identify the difference between people’s positions and their inter-

ests. The course will conclude with an interactive skills practice

session focusing on newly learned Active Listening Skills.

Selected Developments In Oil And Gas Law

march 10 & 24, 2010 8:30 a.m. to 4:30 p.m.

This two day seminar (although valuable to persons at all levels)

is targeted for more senior industry personnel and is suitable for

personnel in all aspects of the oil and gas business, especially,

those involved in the acquisition and administration of oil and

gas lands, leases and other interests, as well as those involved

in the negotiation, drafting, interpretation and application of the

various contracts used in the industry. This seminar will review

the manner in which courts have dealt with selected issues in

oil and gas law; illustrate the effect of the said decisions on the

everyday practices and procedures of the industry; demonstrate

how to identify similar problems in the future; provide practical

suggestions on how to avoid or resolve the said legal issues; and,

most importantly, explain the rationale behind the said decisions

and recommendations.

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Directive 056: ERCB Energy Development Application &

Directive 60 Public Consultation Requirements

march 11 & 12, 2010 8:30 a.m. to 4:30 p.m.

This is a two day seminar which helps participants understand

the public consultation requirements, expectations of the ERCB

and assists companies in completing the application or audit

processes for regulatory compliance. This seminar is designed for

land agents, land administrators, operations engineers as well as

any other personnel who may be responsible for ERCB applica-

tions or regulatory compliance issues.

Fiduciary Duties

march 16, 2010 9:30 a.m. to 12:00 p.m.

This seminar is intended for experienced landmen and joint

venture personnel who are involved in acquisitions, divestments

and other transactions or interpretation of exploration, operating,

joint ventures and other agreements. It is also for P.Land holders

who require re-certification. This seminar will focus on problem

areas arising in the context of both transactions and day-to-day

operations. Case examples and court decisions specific to land

related issues will be presented and discussed. Specifically, this

course will emphasize situations and circumstances where fidu-

ciary duties do and do not arise and the nature of these duties.

Professional Ethics: Theory And Application

march 16, 2010 1:00 p.m. to 4:30 p.m.

This seminar is intended for all interested land personnel, P.Land

holders who require re-certification and all prospective new CAPL

members. This seminar is intended to increase the understanding

of ethics and the dimensions to ethical behaviour by stimulating

the ethical thought process, giving a basic introduction to the

nuances of ethics, introducing a number of methods used in ethi-

cal decision making, and providing a forum for discussions with

respect to land related ethical issues. Case studies will encourage

class discussion and give each participant insight into the moral-

ity vs legality question.

A Practical Guide to Title Review and Acquisitions

march 18, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for landmen and other industry person-

nel who are responsible for coordinating the conduct of title

review with outside counsel or those conducting due diligence

reviews and rectifying title deficiencies when acquiring assets.

This seminar will focus on the practical aspects of title and due

diligence reviews when acquiring assets in Western Canada.

Attendees will benefit from the suggestions presented to make the

title review process involving outside counsel more cost-effective

and efficient, enabling you to interpret the title opinion and use it

as a working document in your land administration system.

Surface Land Management

march 23, 2010 8:30 a.m. to 4:30 p.m.

This seminar is directed towards professionals such as mineral

landmen, engineers, and geologists who work with their surface

land department or manage the surface land group as a part

of a larger team. Individuals new to the industry would also

benefit from this course. This course will provide an overview

of the surface land process from project kick-off to licensing.

Areas discussed will include the acquisition process on both

private and crown lands, applicable acts and regulations, compen-

sation calculations, documentation requirements and addendums,

survey plans, ERCB participant involvement and consultation

requirements, ERCB non-routine license applications, Surface

Rights Board applications and how to use these processes to gain

access to land.

Conventional Exploration Agreements: Junior Level

march 25, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for those landmen, contract analysts and

administrators requiring an introductory understanding of explo-

ration agreements. The seminar will focus primarily on reviewing

typical agreements such as farmouts, seismic options, pooling

and joint operating agreements through the utilization of sample

letter agreements, formal agreements and precedents.

Resolving Conflict Through Negotiation

march 30, 2010 8:30 a.m. to 4:30 p.m.

This seminar is designed for landmen and other individuals who

wish to upgrade their communication skills through the use of

interest-based negotiations. This negotiation model is the model

used in the settlement of disputes by the ERCB and subscribed

to by the C2C Task Force. This seminar will instruct negotiators

of any level of experience in the skills of interest-based negotia-

tions which is formulated on the Harvard and Justice Institute of

British Columbia Model. The seminar will focus on practicing

select communication skills to: i) identify the negotiation matter

at issue, ii) discover and understand both your own and the other

party’s underlying interests which are motivating the hardened

positions taken in the negotiation; and iii) brainstorm options

which meet the underlying interests common to both parties and

unique to each party so that a win-win agreement can be reached.

When agreements are based on interests rather than positions the

parties are more satisfied with the outcome and the relationships

are preserved for future negotiations. Special attention will also be

paid to handling the other party’s pressure tactics.

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Surface Rights Law (PSL)

april 6, 2010 8:30 a.m. to 4:30 p.m.

This is a full day course for industry personnel working with

Surface Agreements and the applicable legislation governing the

rights of the surface owners and third parties. The course is for the

purpose of learning the applicable Statues and Regulations that

govern freehold surface land agreements and the execution of

such documentation. The course will include a review of the Land

Agents Licensing Act, Land Titles Act, Surface Rights Act, Dower

Act, Devolution of Real Property Act, Agricultural and Recreational

Land Ownership Act, Law of Property Act and a number of other

statues in force in the Province of Alberta that the land agent

should be aware of.

Negotiation Skills For Surface Land Agents (PSL)

april 13, 2010 8:30 a.m. to 4:30 p.m.

This one-day seminar is designed to look at negotiations from a

perspective of positional bargaining vs. interest based negotiation.

Various elements of a typically negotiation will be examined and

strategies for dealing with aggressive and more difficult negotia-

tors will also be addressed. The instructor will lead the participants

through an examination of all of the elements contained within

a typical negotiation. This workshop will provide participants

with numerous interactive industry related negotiation scenarios

throughout the day so that participants can put into action the

skills they have learned during the early stages of the workshop.

1999 CAPL Freehold Mineral Lease

april 15, 2010 8:30 a.m. to 12:00 p.m.

This seminar will be of value to anyone working with Freehold

Mineral Leases. A discussion of the philosophy adopted by the

Freehold Mineral Lease Committee will be followed by a review

and discussion of the changes made to the 1999 Freehold Lease

and its impact on the industry.

Royalty Calculations (New)april 15, 2010 1:00 p.m. to 4:30 p.m.

This seminar would be of value to senior land, accounting,

production and joint venture personnel who require a thorough

understanding of the complexities and implication of royalty

calculations. This half-day seminar will focus on a case study

approach to examining the complexities and implications of vari-

ous actual royalty clauses and calculations.

1990 and 2007 CAPL Operating Procedures

april 20 & 21, 2010 8:30 a.m. to 4:30 p.m.

This is a two-day seminar intended for land personnel who are

involved with joint interest agreements on a day-to-day basis and

therefore require a thorough understanding of the CAPL Operating

Procedure. The CAPL Operating Procedure is the industry bench-

mark document for operations conducted on jointly held lands.

In this seminar, the 1990 and 2007 CAPL Operating Procedures

will be discussed in detail with particular emphasis on its day-

to-day application. Comparisons will be made to previous CAPL

Operating Procedures in certain key areas.

Professional Ethics: Identifying And Applying

Your Core Values (New)april 27, 2010 8:30 a.m. to 4:30 p.m.

This seminar is intended for all interested land personnel, P.Land

holders who require re-certification and all prospective new CAPL

members. In this course the participants will be given the oppor-

tunity to identify their core values, the possible sources for those

values, and how those values express themselves in both their

personal and professional life. Attention will also be given to the

development of personal mission and vision statements and how

they reflect the core values identified. In this seminar there is an

emphasis on the practical application of the themes discussed.

Surface A&D (PSL) (New)april 29, 2010 8:30 a.m. to 12:00 p.m.

This half day seminar is designed for surface land person-

nel requiring an introduction to surface rights management

in the acquisition and divestiture of operated properties.

The course is also valuable to supervisors and managers in the

area. This seminar is designed to provide an overview of surface

land issues in the acquisition and divestiture of operated prop-

erties. Topics include a sample checklist, lease and agreement

conveyancing, well licenses and LLR review, transfers, easements

and rights-of-way, transfer of caveats, road use agreements, notice

to landowners and occupants, electronic processes in Crown

dispositions and license transfers, and environmental approvals.

The course is presented from an Alberta perspective, but much of

the material and process is relevant to other jurisdictions. m

Registration can be done online at www.landman.ca. Full course

descriptions can be found online at www.landman.ca/course_calendar.

php. For further information, please contact the CAPL office either by

phone at 403-237-6635, or email dgrieve@landman.ca.

Phone: 1-866-834-0008 | www.landsolutions.ca

def: LandSolutions Inc., company:1. the acknowledged Experts in Land Acquisition, Land Management, and Public Involvement for the petroleum and renewable energy industries, power generation, transmission and public infrastructure providers; 2. providers of expert management of large or small projects, with complex or simple solutions; 3. an experienced team that works with a well established client-driven process—ensuring unparalleled results over the full range of land services; 4. count on LandSolutions: the Experts.

LAND ACQUISITION & MANAGEMENT

def: LAND, noun: 1. any part of the earth’s surface not covered by a body of water; 2. an area of ground with specific boundaries; 3. rural or farming areas, as contrasted with urban areas

def: SOLUTION, noun:1. the act of solving a problem, question, etc.; 2. the state of being solved; 3. an explanation or answer; 4. the process of determining the answer to a problem, or the answer itself

def: EXPERT, noun: 1. a person or company who has special skill or knowledge in a particular field; specialist; authority; 2. a person or company who has achieved such a rating; 3. possessing special skill or knowledge; trained by practice; skillful and skilled; 4. pertaining to expert work; expert advice

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Roster Updatesnew members

The following members were approved by a

Motion on February 2, 2010:

Applicant Current Employer Sponsors

Active

Sandra Forsythe Paramount energy susan Hargreaves

trust al lyon, P.land

Kari webb

Gavan Gillespie southern Cross Cathy armstrong

land Corp. russell jensen

Gerald talbot

Richard Martens landsolutions inc. shawn Howard

jarvis nicoll, Psl

tyler semashkewich, Psl

Ryan Stackhouse ConocoPhillips dale fox

Canada Gary montgomery, P.land

ron vermeulen, P.land

Associate

Laura Brick energy navigator mike Galvin

Carla neumeier

Peter Parkinson

Kristen McDonald scott land Kristy Halat­skulsky

& lease ltd. jeff mcmanus

Greg meidinger

Anthony Melton altus Geomatics lP max Coote

wayne Geddes, P.land

shawn irwin

Student

Patricia Thomas olds College doug Peters

Active to Associate

Terry McFarlane independent

Active to Senior

Brian Baker independent

Harold Hegland Cornell resources ltd.

Margaret Hendriks independent

Margaret Holmes, P.Land lumina energy inc.

David Kinton moose Pasture resources ltd.

Richard Youell Cedar rim resources ltd. m

on the moveDavid Balderston suncor energy inc.

to suncor energy services inc.

Larry Braun, P.Land Canadian forest oil ltd.

to Cordoba resources, ltd.

Barbara Brousseau Paramount resources ltd.

to nal resources management limited

Gary Brown enCana Corporation

to Cenovus energy

Shaun Cooper PetroBakken energy ltd.

to result energy inc.

Carolanne DeBiasio Petro­Canada oil and Gas

to suncor energy services inc.

Connie De Ciancio Petro­Canada oil and Gas

to Base oil & Gas ltd.

Josh Driedger Pioneer Professional services Group

to Canadian natural resources limited

Patricia Elasz tristar oil & Gas ltd.

to PetroBakken energy ltd.

Christopher Ellis talisman energy inc.

to landsolutions inc.

Dorothy Else ddsB Consulting ltd.

to manitok exploration inc.

Mark Fawcett Breaker energy ltd.

to independent

Sharon Gordon, P.Land enerplus Group

to independent

Brian Hagerman enCana Corporation

to Cenovus energy

Ryan Hall enerplus Group

to independent

Gordon Howe iteration energy ltd.

to Canadian forest oil ltd.

Andrew Hyslop Petro­Canada oil and Gas

to independent

Justin Kangarloo enCana Corporation

to Cenovus energy

Chris Koichopolos ConocoPhillips Canada

to 658903 alberta limited

Amanda Kuspira landsolutions inc.

to independent

Gregg Larson, P.Land altia energy ltd.

to independent

1250, 396 – 11th Ave S.W. T2R 0C5

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Paul Lyzaniwski independent

to terra energy Corp.

Gary McCullough, P.Land independent

to Petro­uno resources ltd.

Cory McWhinnie Petro­Canada oil and Gas

to suncor energy services inc.

Bente Nelson enCana Corporation

to Cenovus energy

Rob Pitchford enCana Corporation

to Cenovus energy

Jeff Rideout, P.Land independent

to elkhorn resources inc.

Barry Rowe, P.Land landro resources inc.

to maverick land Consultants ltd.

Beverly Shatosky, P.Land enerplus Group

to independent

Jamie Solland enCana Corporation

to Cenovus energy

David Taylor, P.Land independent

to PetroBakken energy ltd.

Christopher Valentine trafina energy ltd.

to west­Can Hydrocarbon fund ltd.

Thom Vysohlid, P.Land indepedent

to Hanna oil and Gas Company – Canada ulC

Rick Youell medora resources inc.

to Cedar rim resources ltd.

Jason Zelinski enCana Corporation

to Cenovus energy m

In Memoriamsharon HokansonIt is with deepest sadness that the CAPL announces the recent

passing of a member. Sharon Hokanson passed away on January 11,

2010 at the age of 61. Sharon was born in Wadena, Saskatchewan

and worked at Shell Canada for 34 years and lately contracted at

NAL. She became a member of the CAPL in 1993. Sharon enriched

the lives of those who knew her and will be truly missed. m

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Farmouts. Sales. Opportunities.

PNG Exchange is a web-based service for landmen and oil and gas professionals looking to acquire or dispose of properties. PNG Exchange benefits companies by allowing users to customize their property postings, while reaching the maximum number of interested parties in the marketplace. It is the quickest and most cost-effective way for disposing and acquiring parties to connect. Check us out today.

Find out more by contacting Christian Lindved-Jensen at403 462 8057 or christian.lindved@pngexchange.com.

The Canadian Association of

Petroleum Landmen and the

Canadian Association of Petroleum

Land Administration are pleased to

announce the three Western Provinces

will be in attendance for the PNG

Information Exchange. Further details

will be provided on the topics to be

discussed prior to the event.

To continue the success of the PNG Information Exchange, CAPL and CAPLA require industry's support of this event. For more information

and to register, visit the CAPL website at: http//www.landman.ca.

PNG INFORMATION EXCHANGE

April 22nd, 2010 • Telus Convention Centre

LandSolutions Inc. #200, 601-10 Ave SW Calgary, AB T2R 0B2 1-866-834-0008ALSO SERVING: British Columbia, Manitoba, Ontario, Eastern Canada, and throughout Midwest US.

WESTERN CANADA LAND SALE and DRILLING RIG REVIEW

THE EXPERTS IN LAND ACQUISITIONAND MANAGEMENT SERVICES.

AREATotal Ha Sold (thousands)

Average$ / Ha

BC 9,444 $1,371

AB - Foothills 21,225 $243

AB - Plains 50,411 $853

AB - Northern 60,928 $1,141

SK No Sale $0

MB No Sale $0

January 2010

NOTE: Numbers are rounded

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

7500

8000

8500

9000

9500

10000

Land Sale DataManitoba British Columbia Saskatchewan Alberta

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

January 2010 January 2009 January 2008 January 2007 January 2006 January 2005

Drilling Rig Utilization Rate

Utilization Rate

0

100

200

300

400

500

600

700

800

900

January 2010 January 2009 January 2008 January 2007 January 2006 January 2005

Drilling Report for Last 5 Years

Drilling

Down

Total

bollywood

HOST RECEPTION: 6:00 - 7:00 P.M. DINNER: 7:30 P.M. DANCE: 9:30 P.M. BAND: THE REAL DEAL TICKETS: $125.00

S P R I N GB A L L

2 0 1 0 C A P L P R E S I D E N T ’ S

SATURDAY, MAY 8, 2010 THE WESTIN CALGARY

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Olds CollegeLand Agent/Land Administrationannual reception/networking evening 2010 ‘sponsorship’We are once again requesting your support in helping sponsor

costs of our student/industry networking evening. Sponsorship

and advertising dollars supplement the College’s contribution and

help maintain the caliber of this event. This annual event provides

companies with the opportunity to personally meet and talk to

potential employees and build your network.

Please consider the following:

1) Donating directly to the program – Citing Sponsorship of the

Land Agent/Land Admin Annual Reception;

2) Company booth space at our annual reception also sold on a first

come – first serve basis;

3) Advertisement space sold on a first come – first serve basis in the

Olds College Land Agent and Land Admin students resume/

profile book.

Advertising spaces available are:

AD Size Amount

inside full page $300.00

1/2 page inside $250.00

1/4 page inside $200.00

Advertising for 2/3 of the Front Page and the Back Cover will “sell”

by “silent” email auction. Please send your bid amount to tlloyd@

oldscollege.ca.

Approximately 75 hardcopies and 50 cds of the Student

Resume Book will be distributed at the Networking Evening to

potential employers of Olds College students. The proofs for the

Ads will need to be submitted by the end of February 2010 for

duplication purposes.

For any one of the above donation/advertising opportunities

please contact Tara Lloyd, via e-mail tlloyd@oldscollege.ca or tele-

phone (403) 556-8207.

Thank you for your continued support of our Annual Event from

the Land Agent and Land Administration Programs at Olds College. m

Surface • Public Consultation • Freehold Leasing • A & D • Oil Sands • Pipelines • Land Sales • Environmental • Contract Staffing

Experienced professionalsdelivering high quality workout of 6 full service offices.

CalgaryEdmontonLloydminsterReginaGrande PrairieFort St. John

403-261-1000scottland.ca

Scott Land & Lease Ad Final 1/15/09 5:16 PM Page 1

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CAPL Calendar of Eventsmarch 2 Tuesday Understanding Natural Gas & Crude Oil Marketing 4 Thursday 2007 CAPL Operating Procedure 6 Saturday Squash Tournament 9 Tuesday PSL: Constructive Conflict Management 10 Wednesday Selected Developments in Oil & Gas Law 10 Wednesday Alberta Land Sale 11-12 Thur-Fri (PSL) Directive 56: ERCB Energy Development

Application & Directive 60: Public Consultation Requirements

16 Tuesday Ethics 16 Tuesday Fiduciary Duties 17 Wednesday St. Patrick’s Day 18 Thursday A Practical Guide to Title Review and Acquisitions 18 Thursday Networking Night & General Meeting 23 Tuesday Surface Land Management 24 Wednesday Selected Developments in Oil & Gas Law 24 Wednesday Alberta Land Sale 24 Wednesday British Columbia Land Sale 25 Thursday Conventional Exploration Agreements:

Junior Level 30 Tuesday Resolving Conflict Through Negotiations m

april 2 Friday Good Friday 4 Sunday Easter Sunday 6 Tuesday (PSL) Surface Rights Law 6 Tuesday Board Meeting 7 Wednesday Alberta Land Sale 12 Monday Saskatchewan Land Sale 13 Tuesday (PSL) Negotiating Skills for Surface Land Agents 15 Thursday 1999 CAPL Freehold Mineral Lease 15 Thursday Royalty Calculations 15 Thursday General Meeting and Annual Elections 20-21 Tue-Wed 1990 CAPL Operating Procedure 21 Wednesday Alberta Land Sale 21 Wednesday British Columbia Land Sale 27 Tuesday Professional Ethics: Identifying and

Applying Your Core Values 29 Thursday (PSL) Surface A&D m

March Meetingnetworking eveningthursday, march 18, 2010

Reception: 5:00 p.m. until 9:00 p.m.

Location: Murrieta’s Bar & Grill

#200, 808 – 1 Street S.W.

Cost: CAPL Members No Charge

Guests $73.00 includes GST

Drink tickets can be pre-ordered from the CAPL office by download-

ing the order form available on the website starting February 28, 2010.

All members are required to confirm their attendance by fax or email.

Fax registration forms to 403-263-1620, Attn: Karin Steers or email

ksteers@landman.ca. Please confirm your attendance prior to noon on

Thursday, March 11, 2010. m

April MeetingGeneral meeting and annual electionsthursday, april 15, 2010

Lunch: 11:30 a.m. to 1:30 p.m.

Location: The Westin Hotel

320 – 4 Avenue S.W.

Cost: CAPL Members No Charge

Guests $68.25 includes GST

All members are required to confirm their attendance by fax or email.

Only guests are required to purchase a ticket. guest tickets will be

sent to you with an invoice. Fax registration forms to 403-263-1620,

Attn: Irene Krickhan or email ikrickhan@landman.ca. Please confirm

your attendance prior to noon on Thursday, April 8, 2010. m

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