This is the sixth version of the CAPL Operating Procedure, with previous versions based on industry’s experiences with the document. THE CAPL OPERATING PROCEDURE. ROBERT M. BOYER•. The author outlines the substantive changes that have been made by the Canadian. In this article, the author compares the and CAPL Operating Procedures, emphasizing the revisions which have been made and.
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This case will be of interest to the oil and gas bar for two reasons.
First, the case provides some guidance as to the operaing of the information that a joint operator must provide to support a challenge notice. The Notice stipulated that Diaz would not charge the joint account for any costs attributable to a production office, a field office or to first level supervisors in the field. PW took the position, in a timely way, that the Notice was deficient in that it did not provide sufficient information to assess whether the proposal was more favourable to the joint account or not, or operatong Diaz would be able to conduct operations in a safe and good and workmanlike manner.
In addition, PW was of the view that Diaz might be in default under the agreement given the magnitude of unresolved receivables as between PW and Diaz. Justice Colleen Kenny denied proecdure application.
Diaz failed to support its Notice with the information required by cl. Dapl later information detailed the specific costs savings but it also provided that Diaz would continue to retain an existing contractor thereby speaking belatedly to the ability to operate in safe and workmanlike manner. Although this was sufficient to dispose of the application Capll Kenny also noted that to the extent that PW put at issue the ability of Diaz to assume the operatorship, that matter would have to proceed by way of statement of claim, discovery and trial.
The CAPL operating procedure contemplates a number of ways in which the joint operator s can obtain a change in the operatorship: The case law suggests that a joint operator will face an uphill battle against an incumbent who wishes to retain its position: In addition to the three ways outlined above there is also the challenge provision in cl.
Challenge Notices Under the Terms of the 1990 CAPL Operating Procedure
The commentary to the CAPL is instructive:. Since one is unable to quantify qualitative changes, cappl provision seems limited to financial terms.
However, how can a challenger give any more than its best cost estimate when the costs of exploration are a function of such factors as weather conditions, exploration success testing costsmechanical difficulties, the demand for equipment and inflation?
A challenge on the basis of terms and conditions, therefore, might in practice only be the right to challenge on the basis of overhead rates. The commentary recognizes the difficulty that the challenger faces. Implicit in this is the idea that the incumbent operator is better placed to identify where it might be proceedure to identify efficiencies.
Given these practical difficulties one should perhaps be careful not pricedure be too demanding of the information that the challenger must adduce in support of its challenge. But in this case the challenger seems to have provided only the barest information.
This is of course the standard expected of an operator and in cl. The question for present purposes is whether a challenger must provide evidence to support its capacity to meet that standard as part of its Challenge Notice.
This would leave too much to the auto-interpretation of the incumbent operator who would simply say that an inexperienced joint operator could never have the competence to assume the operatorship. For as the commentary indicates, it cap already very difficult for a joint operator to put together a challenge notice that is not a leap into the dark; the idea that there is a further condition precedent would make the challenge provisions little more than a dead letter.
The relevant commentary is essentially unchanged. See the note here and consider posting something yourself or sending some feedback more anonymously to Professor Jennifer Koshan at koshan ucalgary.
Challenge notices under the terms of the CAPL Operating procedure This case will be of interest to the oil and gas bar for two reasons.
The Decision Justice Colleen Kenny denied the application. Discussion The CAPL operating procedure contemplates a number of ways in which the joint operator s can obtain a change in the operatorship: The commentary to the CAPL is instructive: About Nigel Bankes B. Chair of Natural Resources Law. opedating
Challenge Notices Under the Terms of the CAPL Operating Procedure |
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