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Compare Accounts. Where a company beneficially owns mines and minerals under an unregistered transfer of land, and files a caveat on title claiming such interest, the company does not subsequently surrender its beneficial ownership by purporting to enter into a natural gas lease as lessee.
If a vendor of land covenants to convey all of his or her interest in the land, and because of a mutual mistake it is believed the mines and minerals are reserved to the Crown, whereas they actually belong to the vendor, the purchaser will be entitled to the mines and minerals.
A purchaser who becomes aware of a defect in the vendor's title may repudiate the contract, except possibly in the case of trifling matters which the court could, at the vendor's instance, address by fixing compensation or abating the purchase price.
Accreted land takes on the legal characteristics of land to which it has accreted, and prima facie includes all mines and minerals. There's a Right Way. And It's Canada's Way. Mining companies in Canada were the first in the world to develop an externally-verified performance system for sustainable mining practices.
Our TSM program reflects a deep commitment to environmental protection, safety and transparency about how we operate. Around the world, commuters are looking for quicker, greener transit solution. Modern mining products can help reduce weight, improve durability and cut energy use. Even though this is a nominal amount, it is important that it is paid. Once the caveat has been filed with Alberta Land Titles and it has been confirmed that no conflicting caveats exist on the Certificate of Title, the owner will be paid the "bonus" or "additional consideration", which is typically quite a lot larger than the initial consideration.
An owner may wish to clarify the timeframe within which the company anticipates that the bonus will be paid, as different versions of the CAPL lease have different provisions. Once production is established, the owner will receive a royalty based on the royalty rate and the cap on deductions negotiated in the freehold lease agreement. In recent decades, negotiated royalty rates have varied between This has impacted the amount freehold owners can negotiate in order to remain competitive with Crown mineral rights.
Many freehold owners want to know what constitutes fair compensation. The Farmers' Advocate Office FAO does not advise on compensation amounts for any type of negotiation, including freehold mineral rights.
More information is available at www. The lease can be continued after the primary term. The length of the primary term of a freehold mineral is a matter of negotiation between the freehold mineral owner the lessor and the company the lessee. The typical term is 3 years. The lease will also include a "habendum clause" that allows the continuation of the lease after the primary term. This is an important aspect of the contract because it provides the operator with the flexibility to continue operating after the primary term if the capability for production has been established.
A freehold mineral owner should be aware that the habendum clause makes the length of the lease uncertain, as there is no way to predetermine when production or the capability for production will come to an end. In order to continue most CAPL leases under the shut-in wells clause, the well has to be capable of meaningful production.
Under these CAPL leases, payment under the shut-in wells clause is not enough to continue the lease. In general, there must be the capability of production in meaningful amounts. Some non-CAPL leases do not have shut-in clauses, which is important because this means they can only be continued past the primary term through production.
As always, this language can differ greatly from lease to lease, particularly on pre-CAPL leases, and legal advice should be sought to examine particular situations. A freehold owner who is negotiating should be mindful of the suspended well clause.
A well may be formally shut-in or suspended if it is not currently economically viable but may become so in the future. This practice is more common with gas wells than oil wells, as the connectivity of facilities in the area can be a big factor in making a gas well economical. Under current Alberta legislation, a company is permitted to leave a well suspended indefinitely.
Different contracts may contain alternative provisions. The CAPL 99 lease, for example, establishes an annual suspended well payment equal to the initial per acre bonus divided by the number of years left in the primary term of the lease.
Freehold mineral owners who are negotiating a new lease may try to incorporate a limitation for how long a well might remain suspended before the rights return to the owner. A freehold owner with an existing lease should have legal counsel examine the wording in the suspended or shut-in wells clause in their particular lease. A freehold mineral owner may use the "offset wells clause" in the lease to force the lessee to take action if a well on an adjacent property produces commercial volumes of oil or gas.
Petroleum and natural gas move about in the subsurface in response to pressure changes. Production of oil or gas from any well results in a pressure reduction around the subsurface wellbore, causing oil or gas within the productive reservoir to flow toward the producing wellbore.
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