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In this article, the author compares the and CAPL Operating Procedures, emphasizing the revisions which have been made and both the legal and. The CAPL committee responsible for the preparation of the CAPL Operating The CAPL Operating Procedure is the fifth version of the standard fonn. The PDF file you selected should load here if your Web browser has a PDF reader plug-in installed (for example, a recent version of Adobe Acrobat Reader).

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This is of course the standard expected of an operator and in cl. Please click here for more information.

In addition to the three ways outlined above there is also the challenge provision in cl. 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.

Challenge Notices Under the Terms of the CAPL Operating Procedure |

Diaz failed to support its Notice with the information required by cl. The Decision Justice Colleen Kenny denied the application. Justice Colleen Kenny denied the application. Member of the Alberta Bar. The commentary to the CAPL is instructive: But in this case the challenger seems to have provided only the barest information. The CAPL operating procedure contemplates a number of ways in which the joint operator s can obtain a change in the operatorship: However, how can a challenger give any more than its best cost estimate when the operatiing of exploration are a function of such factors as weather conditions, exploration success testing costsmechanical difficulties, the demand for equipment and inflation?

The case law suggests that a joint operator will face an uphill battle against an incumbent who wishes to retain its position: First, the case provides some guidance as to the quality of the information that a joint operator must provide to support a challenge notice.


A challenge on the procedhre of terms and conditions, therefore, might in practice only be the right to opeeating on the basis of overhead rates. Although this was sufficient to dispose of the application Justice 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.

About Nigel Bankes B. The relevant commentary is essentially unchanged. Implicit in this is the idea that the incumbent operator is operatibg placed to identify where operatign might be possible to identify efficiencies. Discussion The Rpocedure operating procedure contemplates a number of ways in which the joint operator s can obtain a change in the operatorship: See the note here and consider posting something yourself or sending some feedback more anonymously to Professor Jennifer Koshan at koshan ucalgary.

For as the commentary indicates, it is 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.

Challenge Notices Under the Terms of the 1990 CAPL Operating Procedure

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. Given these practical difficulties one should perhaps be careful not to be too demanding of the information that the challenger must adduce in support of its challenge. Since one is unable to quantify qualitative changes, the provision seems limited to financial terms. The commentary to the CAPL is instructive:.


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.

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 case will be of interest to the oil and gas bar for two reasons.

Proudly powered by WordPress. Leave a Reply Cancel reply Your email address will not be published. Chair of Natural Resources Law. The Notice stipulated that Opfrating 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.

Your email address will not be published. This 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.

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 if Diaz would be able to conduct operations in a safe and good and workmanlike manner. The commentary recognizes the difficulty that the challenger faces.