Acts and Regulations

O-2.1 - Oil and Natural Gas Act

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Current to 1 January 2024
CHAPTER O-2.1
Oil and Natural Gas Act
Assented to June 24, 1976
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:
Definitions
1In this Act
“allowable” Repealed: 2015, c.4, s.1.
“battery” Repealed: 2015, c.4, s.1.
“commercial quantity” Repealed: 2001, c.20, s.1
“deep testhole” means a well designated by the Minister as a deep testhole;(trou d’essai profond)
“field” means(champ)
(a) the general land and water surface area underlain or appearing to be underlain by one or more pools, and
(b) the subsurface region vertically beneath such land and water surface area;
“geophysical exploration” means any investigation of the subsurface of the land and includes(prospection géophysique)
(a) seismic operations,
(b) gravimetric operations,
(c) magnetic operations,
(d) electrical operations,
(e) geochemical operations,
(f) test drilling, and
(g) any other operation employed to determine geologic or other subsurface conditions;
“geophysical licence” means a valid and subsisting licence granted under section 13;(licence de prospection géophysique)
“geophysical licensee” means the holder of a geophysical licence;
“geophysical plan” means a preliminary plan of proposed geophysical explorations approved by the Minister;(plan de prospection géophysique)
“grid area” means a grid area as established by regulation;(carreau de quadrillage)
“lease” means a lease granted for oil and natural gas rights under section 27 or 27.1, and includes a consolidated lease granted under section 32.1;(bail)
“lease area” means the area included in one lease;(concession)
“lessee” means the holder of a lease; (concessionnaire)
“licence area” means the area included in one licence to search;
“licence to search” means a valid and subsisting licence to search granted under section 17;(permis de recherche)
“licensee” means the holder of a licence to search;
“location” means the surface, land or water area upon which a well is licensed to be drilled, or oil and natural gas is stored, processed, transferred or transported;(emplacement)
“Minister” means the Minister of Natural Resources and Energy Development and includes any person designated by the Minister to act on the Minister’s behalf;(Ministre)
“Minister of Finance” Repealed: 2019, c.29, s.110
“Minister of Finance and Treasury Board” means the Minister of Finance and Treasury Board and includes any person designated by the Minister to act on the Minister’s behalf;(ministre des Finances et du Conseil du Trésor)
“natural gas” means all natural gas and associated hydrocarbon and non-hydrocarbon fluids that are not defined as oil ;(gaz naturel)
“oil” means all crude petroleum oil, coal oil and mineral oil, which substances may be contaminated with sulphur compounds, and which in their natural viscous state are recovered or are recoverable at a well from an underground reservoir in liquid form;(pétrole)
“paying quantity” Repealed: 2015, c.4, s.1.
“permittee” means the holder of a valid and subsisting geophysical permit issued under the regulations;(titulaire d’un permis de travaux géophysiques)
“plant” means the site of an assemblage of equipment used for the processing or handling of oil or natural gas;(usine)
“pool” means an underground reservoir containing an accumulation of oil or natural gas, or both, separated or appearing to be separated from any other reservoir or accumulation;(gisement)
“section” means a section as established by regulation;(section)
“shothole” means a hole drilled for the purpose of firing an explosive charge in connection with seismic operations, whether or not the shot is fired;(trou de tir)
“special spacing area” means a special spacing area determined by the Minister under section 36;(aire spéciale)
“testhole” means a hole drilled or being drilled for any purpose in connection with geophysical exploration but does not include a shothole, or a well drilled or being drilled for oil, natural gas or water, or a deep testhole;(trou d’essai)
“unit” means a unit as established by regulation;(unité)
“unitization” means(exploitation en commun)
(a) the development or production of oil and natural gas,
(b) the implementation of a programme for the conservation of oil and of natural gas, or
(c) the co-ordinated management of interests in the oil and natural gas,
within, upon, or under a location, part of a location, or a number of locations that are combined for that purpose pursuant to a unitization agreement entered into under this Act;
“waste” includes the underground or surface loss of potentially recoverable oil or natural gas, and wasteful operation;(gaspillage)
“wasteful operation” includes(opération génératrice de gaspillage)
(a) the locating, spacing, drilling, equipping, completing, operating, or producing of a well in a manner that results or tends to result in reducing the quantity of oil or natural gas ultimately recoverable from a pool by the use of sound engineering practices and economic principles,
(b) the locating, spacing, drilling, equipping, completing, operating or producing of a well in a manner that causes or tends to cause excessive surface loss or destruction of oil or natural gas,
(c) the inefficient, excessive or improper use or dissipation of reservoir energy however caused,
(d) the failure to use suitable and timely artificial, secondary, or supplementary recovery methods in a pool where it appears probable, on the basis of available information, that any of such methods would result in increasing the quantity of oil or natural gas ultimately recoverable from a pool by the use of sound engineering practices and economic principles,
(e) the escape or flaring of natural gas if it appears that, in the public interest and by the use of sound engineering practices and in the light of economics and the risk factor involved, the natural gas could be gathered, processed if necessary, and it or the products therefrom marketed, stored for future marketing, or beneficially injected into an underground reservoir,
(f) the inefficient or improper storage of oil or natural gas on the surface or underground,
(g) the production of oil or natural gas in excess of the quantity that can be properly stored, transported, or marketed, and
(h) the use of natural gas for purposes other than gas lift, repressuring, recycling, pressure or maintenance, or for fuel or electrical requirements, unless the use is efficient and in the public interest;
“well” means a hole(puits)
(a) made or being made by drilling, boring, or in any other manner from which any oil or natural gas is obtained or obtainable, or for the purpose of obtaining oil or natural gas,
(b) used, drilled, or being drilled for the purpose of obtaining water for injection or for injecting natural gas, air, water, or any other substance into an underground formation, or
(c) used, drilled, or being drilled to a depth in excess of fifteen hundred feet for the purpose of obtaining geological or geophysical information;
“well licence” means a valid and subsisting licence to drill a well granted under section 16.2;(permis de forage)
“well licensee” means the holder of a well licence and subsequent to the drilling of the well, but prior to its abandonment, means the owner of the well.(titulaire d’un permis de forage)
1984, c.53, s.1; 1985, c.19, s.1; 1986, c.8, s.91; 1987, c.6, s.75; 1991, c.27, s.32; 2001, c.20, s.1; 2004, c.20, s.44; 2012, c.34, s.1; 2012, c.52, s.38; 2013, c.12, s.1; 2015, c.4, s.1; 2016, c.37, s.128; 2019, c.29, s.110; 2019, c.29, s.193
ADMINISTRATION
Administration
2(1)The Minister is in charge of the administration and control of this Act and may designate a person to act on his behalf.
2(2)The Minister of Finance and Treasury Board may designate a person to act on his behalf under this Act.
2019, c.29, s.110
OWNERSHIP
Ownership of oil and natural gas
3All oil and natural gas is hereby declared to be, and to have been at all times prior hereto, property separate from the soil and vested in the Crown in the right of the Province.
EXPLORATION RIGHTS
Exploration rights
4(1)No person shall explore for, or cause to be explored for, oil or natural gas unless he has a geophysical licence, a licence to search or a lease.
4(2)No person shall drill any well unless
(a) he has a well licence, or
(b) he drills the well on behalf of a person who has a well licence.
1985, c.19, s.2
ACCESS
Access
5Persons authorized by the Minister to enforce the provisions of this Act and the regulations, at any reasonable time and upon the presentation of an identification card issued by the Minister,
(a) may have access to all wells, equipment, plants, locations and records,
(b) may enter upon and inspect any well or any place at which oil or natural gas is refined, handled, processed, produced, injected, or treated, or any place used or occupied in connection with a well or a place at which oil or natural gas is refined, handled, processed, produced, injected or treated,
(c) may inspect all books, documents, records, plants and equipment pertaining to any such wells or place, and
(d) may take samples or carry out any tests or examinations desired.
CONFLICTS OF INTERESTS
Conflicts of Interests
6(1)No employee of the Province responsible for the administration and enforcement of this Act and the regulations shall have a monetary interest of any description, directly or indirectly, in any oil or natural gas property in the Province, or in any business engaged in any phase of the oil and natural gas industry in the Province.
6(2)An employee who violates or fails to comply with subsection (1) commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category F offence, and in addition to any sentence that may be imposed, the employee shall forfeit the employee’s office.
1984, c.53, s.2; 1990, c.61, s.96
SUMMONS TO WITNESS
1986, c.4, s.39
Summons to Witness
7(1)A summons to witness shall not issue out of any court requiring the attendance of the Minister or any employee of the Province in his official capacity under this Act, nor shall any document in his official custody or possession be produced without an order of the court or a judge thereof.
7(2)Any employee responsible for the administration and enforcement of this Act shall not disclose any information obtained by him in his official capacity that the Minister certifies is not in the public interest to be divulged.
1986, c.4, s.39
RIGHT OF ENTRY
Right of entry – Crown land
8Subject to this Act, Crown lands may be entered upon and explored for oil and natural gas with the consent of the Minister upon such terms and conditions as he prescribes.
2012, c.52, s.38; 2016, c.37, s.128
Right of entry
9(1)No licensee, lessee, geophysical licensee, permittee, or well licensee shall enter on and use or cause entry upon any lands other than Crown lands, for the purpose of exploring in any manner whatsoever for oil and natural gas, or for the doing of any other act thereon unless he obtains the right to enter on and use that land either
(a) by agreement with the owner, tenant or occupant of such lands, or
(b) by obtaining a special order from the Minister under this Act.
9(1.1)A person acting on behalf of a licensee, lessee, geophysical licensee, permittee or well licensee for the purpose of entering into an agreement referred to in paragraph (1)(a) shall be a member in good standing of the International Right of Way Association or shall meet any equivalent qualifications that are acceptable to the Minister.
9(2)Subject to this Act and the regulations,
(a) the holder of a licence to search, well licence or lease or the holder’s agent, has the right to the use and possession of whatever part of the surface of the location that is necessary for the purpose of exploring for, winning, extracting and delivering oil or natural gas, or both, from the location, and
(b) the holder of a geophysical licence or the holder’s agent has the right to the use and possession of whatever part of the surface of the location that is necessary for the purpose of exploring for oil or natural gas, or both, from the location.
9(3)A person who enters upon Crown land for the purpose of exploring for, winning, extracting or delivering oil or natural gas, or both, is liable to pay compensation to the Crown in the right of the Province for any loss or damage caused by reason of the entry or operations, or both, in an amount to be determined by agreement, or failing an agreement, by The Court of King’s Bench of New Brunswick or any judge thereof acting under Part II of the Expropriation Act, on application by the Minister, which amount, if any, shall upon determination be paid to the Minister of Finance and Treasury Board.
9(4)A person who enters upon any land other than Crown land for the purpose of exploring for, winning, extracting or delivering oil or natural gas, or both, is liable to pay compensation to a person having an interest therein for any loss or damage to land or chattels caused by reason of the entry, occupation or operation, and if the parties cannot agree as to the amount of the compensation, the amount shall be determined by The Court of King’s Bench of New Brunswick or any judge thereof acting under Part II of the Expropriation Act on application by either of the parties.
1985, c.4, s.52; 1987, c.6, s.75; 2001, c.20, s.2; 2013, c.12, s.2; 2019, c.29, s.110; 2023, c.17, s.182
Special order to enter and use land
10(1)A licensee, a geophysical licensee, a well licensee, or a lessee who is unable to make an agreement with the owner, tenant or occupant of private land for the right to enter and use the land covered by his licence to search, well licence, approved geophysical plan or lease, or any part thereof, may apply in writing to the Minister, for a special order to enter such land.
10(2)No application shall be made under subsection (1) unless the applicant has served upon the owner, tenant or occupier of the land five clear days prior to the making of the application, written notice of the intention to make the said application.
10(3)Upon receipt by the Minister of the application and of evidence that notice of intention has been served and delivered as required by subsection (2), the Minister
(a) shall fix a date for the hearing of the application which shall not be later than ten clear days after the date on which the Minister received the application and evidence,
(b) may require the applicant to give such notice of the hearing in such manner and to such persons as he may direct, and
(c) may in his sole discretion and without giving reasons therefor, grant or deny such special order upon such terms and conditions as he considers proper.
10(4)If the parties have not agreed to the amount of compensation at the time of the grant of the special order, the determination of the compensation shall be referred to The Court of King’s Bench of New Brunswick or any judge thereof acting under Part II of the Expropriation Act by either party.
10(5)Notwithstanding subsection (3), the special order is effective upon the date of issue, and the Minister may require the licensee, geophysical licensee, well licensee or lessee to give security in the form as prescribed in section 54 to ensure payment of the compensation agreed to or to be determined pursuant to subsection (4) before entry is effected on the land subject to that special order.
10(6)Where there are several owners, tenants or occupants of the land to be entered and used and there are in the opinion of the Minister, special difficulties in effecting service of any notice under this section, the Minister may order substituted service in such manner as he determines.
1984, c.53, s.3; 1985, c.4, s.52; 1987, c.6, s.75; 2023, c.17, s.182
TERMINATION OF THE SPECIAL ORDER
Termination of the special order
11(1)If at any time after the expiration of two months from the date of a special order, the licensee, geophysical licensee, well licensee, or lessee has not commenced to use or ceases to use the surface of the land, or any part thereof, the special order terminates.
11(2)If it is indicated to the Minister that a special order should not terminate in accordance with subsection (1), the Minister may, if in his opinion the conditions warrant, make an order continuing the special order.
GEOPHYSICAL EXPLORATION
Geophysical licence for exploration
12No person, on his own behalf or for or on behalf of others, shall undertake geophysical exploration whether on land, water or by aircraft unless he is
(a) a geophysical licensee, or
(b) a permittee acting on behalf of a geophysical licensee.
1985, c.19, s.3
Application for geophysical licence
13(1)An application for a geophysical licence shall be made in writing to the Minister.
13(2)The Minister may grant a geophysical licence subject to the terms and conditions established by or in accordance with the regulations to an applicant where the applicant furnishes the Minister with security as prescribed by section 54.
13(2.1)The Minister may, at any time, impose any additional terms and conditions on a geophysical licence that the Minister considers appropriate.
13(3)The Minister may require such additional security to be furnished as he directs.
13(4)The security shall be refunded to the geophysical licensee upon evidence being furnished, to the satisfaction of the Minister, that the operations were conducted in accordance with this Act and the regulations and that all reports and information required under this Act and the regulations have been submitted.
13(5)Where an applicant for a geophysical licence has a security on deposit with the Minister of Finance and Treasury Board, the Minister in his discretion may exempt the applicant from the requirement of subsection (2).
1985, c.19, s.4; 2013, c.12, s.3; 2019, c.29, s.110
Transferability of geophysical licence
14A geophysical licence is not transferable without the written consent of the Minister.
Cancellation of geophysical licence by Minister
15(1)The Minister may cancel a geophysical licence where the holder of such licence does not comply with a provision of this Act or the regulations.
15(2)Unless a condition exists that in the opinion of the Minister is a danger to any person or to public or private property, the Minister shall not cancel a geophysical licence under subsection (1) until he has given the holder thereof thirty days notice, or such longer time as he deems advisable, to rectify the default, and if such default is not rectified within the notice period then the geophysical licence shall be cancelled.
15(3)Where the Minister receives notification that a default has been rectified, the Minister shall give the geophysical licensee written acknowledgement that the rectification is satisfactory and that he may continue operations.
Exclusive right of licensee or lessee to do work
16(1)Subject to subsection (2) and section 12, a licensee or lessee has the exclusive right to do geophysical work and geophysical exploration work and exploratory drilling for oil or natural gas, or both, within the boundaries of his licence to search or lease.
16(2)Notwithstanding the issuance or existence of a licence to search or lease a geophysical licensee may
(a) carry out testhole drilling to a depth of one hundred fifty metres,
(b) carry out testhole drilling to a depth not exceeding four hundred fifty metres if he has written approval from the Minister, or
(c) carry out geological work or geophysical exploration other than testhole drilling
in accordance with the regulations within the boundaries of any licence to search or of any lease.
16(3)A person who performs exploration activities as described in subsection (2) shall not interfere with the operations of any holder of a mining or mineral claim or mining lease under the Mining Act, any holder of a mining licence or mining lease continued under the Mining Act, any holder of a mining right granted under the Ownership of Minerals Act or section 25 of the Mining Act or any predecessor of that section or any licensee or lessee under the Bituminous Shale Act or any holder of a right under this Act for the location upon which the activities are conducted.
1977, c.M-11.1, s.21; 1985, c.M-14.1, s.134; 2001, c.20, s.3; 2013, c.12, s.4
Terms and conditions on a geophysical permit
16.01The Minister may, at any time, impose any terms and conditions on a geophysical permit that the Minister considers appropriate.
2013, c.12, s.5
Abandonment of shotholes and testholes
16.02(1)A permittee shall plug a shothole or testhole in accordance with the regulations or with the method required by the Minister.
16.02(2)If a conflict exists between the regulations and the method required by the Minister, the method required by the Minister prevails.
2013, c.12, s.5
On-shore well licence
16.1Sections 16.2 to 16.8 apply to on-shore well licences.
2012, c.34, s.2
Granting of well licence
16.2(1)The Minister may grant a well licence to an applicant if the Minister is satisfied with the drilling program proposed by the applicant and the applicant has complied with the other requirements of section 16.3.
16.2(2)The Minister may impose the terms and conditions on a well licence that the Minister considers appropriate.
2012, c.34, s.2
Application for well licence
16.3An application for a well licence shall be on a form provided by the Minister and shall be accompanied by the following:
(a) the fee prescribed by regulation;
(b) the security deposit prescribed by regulation;
(b.1) proof of liability insurance coverage in the amount of $10,000,000 for the applicant or his or her agents;
(c) the applicant’s proposed drilling program, which includes the completion program; and
(d) any information prescribed by regulation.
2012, c.34, s.2; 2013, c.12, s.6; 2015, c.4, s.2.
Amendment of well licence
16.4(1)A well licensee shall, in the following circumstances, apply to the Minister for an amendment to the well licence:
(a) the name of the well licensee will change;
(b) the name of the well will change; or
(c) the well licensee’s drilling program will change.
16.4(1.1)A well licensee may apply to the Minister for an amendment to any term or condition imposed on the well licence.
16.4(2)An application under subsection (1) or (1.1) shall be on a form provided by the Minister and shall be accompanied by any information prescribed by regulation.
16.4(3)An application to amend a well licence with respect to either of the following matters shall be accompanied by the fee prescribed by regulation:
(a) changing the name of the well licensee; or
(b) changing the name of the well.
2012, c.34, s.2; 2015, c.4, s.3.
Transfer of well licence
16.5(1)A well licence is not transferable without the written approval of the Minister.
16.5(2)An application to obtain the approval of the Minister to transfer a well licence shall be on a form provided by the Minister and shall be accompanied by the following:
(a) the fee prescribed by regulation;
(b) the security deposit prescribed by regulation; and
(c) proof of liability insurance coverage in the amount of $10,000,000 for the person to whom the well licence is to be transferred.
2012, c.34, s.2; 2013, c.12, s.7
Liability insurance
16.51(1)During the term of a well licence, the well licensee shall maintain liability insurance coverage in the amount of $10,000,000 for the licensee or his or her agents.
16.51(2)A well licensee shall notify the Minister immediately of any change in the liability insurance coverage, including a cancellation.
2013, c.12, s.8
Cancellation of well licence
16.6(1)If a well licensee violates or fails to comply with a provision of this Act or the regulations or with a term or condition imposed on the licence, the Minister may give written notice to the well licensee specifying the violation or non-compliance and setting out a schedule for compliance.
16.6(2)Unless the well licensee remedies the violation or non-compliance to the satisfaction of the Minister in accordance with the schedule for compliance, the Minister may cancel the well licence.
16.6(3)When the Minister cancels a well licence, the well licensee continues to be liable for any obligation for which the licensee was liable under this Act or the regulations immediately before the cancellation.
2012, c.34, s.2
Return of security deposit
16.7If a well licensee transfers a well licence or abandons a well to the satisfaction of the Minister, the security deposit shall be returned to that well licensee.
2012, c.34, s.2
Prior approvals, well licences, fees and security deposits
16.8(1)A well licence or an approval concerning a well granted before the commencement of this section by the Minister or his or her predecessors shall be deemed to have been validly granted and is confirmed and ratified.
16.8(2)A fee or a security deposit collected by the Minister or his or her predecessors with respect to a well licence or an approval concerning a well that was granted before the commencement of this section shall be deemed to have been validly collected and is confirmed and ratified.
16.8(3)Any act or thing done by the Minister of Finance and Treasury Board before the commencement of this section with respect to a security deposit to defray the cost of, or the cost incidental to, the work of control, completion, suspension or abandonment of the well to the satisfaction of the Minister shall be deemed to have been validly done and is confirmed and ratified.
16.8(4)No action or other proceeding to question or in which is questioned the validity of the well licences, approvals, fees and security deposits referred to in subsections (1) and (2), or the authority of the Minister to grant those well licences and approvals or collect those fees and security deposits, shall lie or be instituted against the Crown in right of the Province, the Minister or a person designated to act on behalf of the Minister, if the Minister acted in good faith.
16.8(5)No action or other proceeding to question or in which is questioned the validity of the actions or things done by the Minister of Finance and Treasury Board under subsection (3) shall lie or be instituted against the Crown in right of the Province, the Minister of Finance and Treasury Board or a person designated to act on behalf of the Minister of Finance and Treasury Board, if the Minister of Finance and Treasury Board acted in good faith.
2012, c.34, s.2; 2019, c.29, s.110
Licence to search
17(1)The Minister may grant a licence to search for oil or natural gas, or both, within areas in the Province specified in the licence to search.
17(2)Before a licence to search is granted for land that has not previously been held under a licence to search or lease or for land that has previously been held under licence to search or lease and such licence to search or lease has expired, been cancelled or surrendered, the Minister shall call for tenders for the purchase of such licence to search in a manner prescribed by regulation.
17(3)A licence to search may be granted upon such terms and conditions as the Minister may order within the provisions of this Act.
17(4)Not more than one such licence to search shall be granted and in force at the same time covering the same area or part of an area, nor shall any such licence to search be granted for land for which a lease is in force.
Size of licence area
18A licence area contained in one licence to search shall not exceed one hundred sections and shall not be less than a special spacing area.
2001, c.20, s.4
On-shore or off-shore licence
19The Minister shall at the time of granting of the licence to search designate the licence as an on-shore or off-shore licence to search.
2001, c.20, s.5
Validity of on-shore and off-shore licences
20(1)An on-shore licence to search is valid for a term of three years.
20(1.01)Repealed: 2015, c.4, s.4.
20(1.02)Repealed: 2015, c.4, s.4.
20(1.1)Repealed: 2015, c.4, s.4.
20(1.2)At any time during the term of an on-shore licence to search, a licensee may apply, on a form provided by the Minister, for an extension of the term of the licence to search.
20(1.3)The licensee shall set out in the application the reasons for the extension.
20(1.4)If the Minister is satisfied that the circumstances justify the extension, the Minister may extend the on-shore licence to search for the period of time the Minister considers necessary.
20(2)An off-shore licence to search is valid for an initial term of two years and may be renewed for a second period of two years and thereafter for a maximum of six consecutive annual periods, with each annual renewal subject to the Minister’s approval and on such terms and conditions as the Minister imposes at the granting of each annual renewal.
20(3)An application under subsection (2) for renewal of a licence to search shall be made to the Minister at least thirty days prior to the expiry date of the licence to search or any renewal thereof and shall be accompanied by the fee and deposit prescribed by regulation.
20(4)Every renewal of an off-shore licence is subject to the licensee maintaining a deposit with the Minister in an amount at least equivalent to the work requirement for the term of the renewal period.
1984, c.53, s.4; 2001, c.20, s.6; 2012, c.34, s.3; 2013, c.12, s.9; 2015, c.4, s.4.
WORK DEPOSITS
Work deposits
21(1)During the initial term and renewal periods of a licence to search, the licensee shall do or cause to be done on the area for which the licence to search was granted, exploratory work to the satisfaction of the Minister in an amount prescribed by regulation.
21(2)Before a licence to search is granted, the Minister shall require the licensee to deposit with the Minister of Finance and Treasury Board an amount at least equivalent to the work requirement prescribed by regulation for the term of the licence to search.
21(3)Repealed: 2001, c.20, s.7
2001, c.20, s.7; 2012, c.34, s.4; 2019, c.29, s.110
REDISTRIBUTION OF WORK REQUIREMENTS
2012, c.34, s.5
Redistribution of work requirements
21.01(1)In accordance with the regulations and on payment of the prescribed fee, a licensee may apply to the Minister for a redistribution of the expenditures required for exploratory work among one or more on-shore licences to search if
(a) the on-shore licences to search are held by the same licensee,
(b) the on-shore licences to search have the same date of issuance and expiry, and
(c) the licensee has done or caused to be done exploratory work under each on-shore licence to search that meets or exceeds the minimum expenditures required for exploratory work prescribed by regulation for the term of that licence to search.
21.01(2)On application, the Minister may redistribute the portion of the expenditures incurred by the licensee that exceed the minimum expenditure required for exploratory work prescribed by regulation among one or more on-shore licences to search held by the licensee.
2012, c.34, s.5
SURRENDER OF LICENCE TO SEARCH
2001, c.20, s.8
Surrender of licence to search
21.1A licence to search may be surrendered if all work requirements for the term have been met.
2001, c.20, s.8
GROUPING OF LICENCES TO SEARCH
Repealed: 2001, c.20, s.9
2001, c.20, s.9
Repealed
22Repealed: 2001, c.20, s.10
2001, c.20, s.10
CONVERSION ON DISCOVERY
Repealed: 2001, c.20, s.11
2001, c.20, s.11
Repealed
23Repealed: 2001, c.20, s.12
2001, c.20, s.12
WELL LOCATION
Repealed: 2001, c.20, s.13
2001, c.20, s.13
Repealed
24Repealed: 2001, c.20, s.14
1977, c.M-11.1, s.21; 2001, c.20, s.14
PRODUCTION
Repealed: 2001, c.20, s.15
2001, c.20, s.15
Repealed
25Repealed: 2001, c.20, s.16
2001, c.20, s.16
CONVERSION TO LEASE
Application for lease
26(1)The licensee, at any time during the continuance of the term of the licence to search may apply, in a manner prescribed by regulation, to the Minister for a lease.
26(2)The Minister upon receipt of an application under subsection (1) shall grant the lease subject to the terms and conditions he imposes if the licensee has complied with this Act and the regulations.
26(3)A licence to search may be converted to a lease in its entirety at the end of the licence term, if in the opinion of the Minister, all exploration commitments under the licence have been met.
26(4)Repealed: 2001, c.20, s.17
26(5)Those sections within each licence area that are not included in the areas converted from licence to search to lease shall be surrendered to the Crown in right of the Province.
2001, c.20, s.17
LEASES
Lease for oil and gas production rights
27(1)The Minister, upon written application, may grant a lease where the application is made by the holder of a licence to search for the lands for which the application is made.
27(2)Notwithstanding subsection (1) the Minister may, upon the written application by the lessee, approve the transfer of the whole or part of the lease area to another lessee, and shall upon such transfer grant a new lease to such transferee upon such terms and conditions as are prescribed by the Minister.
2001, c.20, s.18
Call for tenders for lease
27.1The Minister may grant a lease to a successful bidder
(a) where a call for tenders for the purchase of the lease has been made in accordance with the regulations, and
(b) where no other licence to search or lease is in force covering the same area or part of the same area.
2001, c.20, s.19
Repealed
27.2Repealed: 2012, c.52, s.38
2001, c.20, s.19; 2012, c.52, s.38
SURRENDER
Abandonment and release of lease
28A lessee may, at any time, abandon and release to the Crown any part of the demised area and shall not thereafter be bound to explore or develop such portion of the area so released.
2001, c.20, s.20
Surrender of lease
28.1A licensee may, at any time, abandon and release to the Crown any part of the demised area and shall not thereafter be bound to explore or develop such portion of the area so released.
2001, c.20, s.21
PRODUCTION RIGHTS
2001, c.20, s.22
Exclusive production rights
29The licensee or the lessee, as the case may be, has the exclusive right to produce, or cause to be produced, from the respective licence area or lease area, as the case may be, oil and natural gas.
2001, c.20, s.23
TERM
Term of lease
30A lease shall be granted for a term of five years.
1985, c.19, s.5; 2001, c.20, s.24
EXTENSION
OF LEASE
2001, c.20, s.25; 2015, c.4, s.5.
Extension of lease
30.1(1)At any time during the term of a lease, a lessee may apply, on a form provided by the Minister, for an extension of the term of the lease.
30.1(2)The lessee shall set out in the application the reasons for the extension.
30.1(3)If the Minister is satisfied that the circumstances justify the extension, the Minister may extend the lease for the period of time the Minister considers necessary.
2001, c.20, s.25; 2015, c.4, s.6.
Repealed
30.2Repealed: 2015, c.4, s.7.
2001, c.20, s.25; 2015, c.4, s.7.
RENTAL REDUCTIONS
Rental reductions
31(1)Before commercial production commences from any lease area the Minister may, upon written application, order the reduction of the rental payable under lease by an amount not exceeding the allowable expenditures, as determined by the Minister, that have been made by the lessee on exploration work within the lease area during the previous year if
(a) the application to the Minister is made within thirty days of the end of each lease year,
(b) the application is accompanied by an affidavit setting out the items of expenditure and the number of the lease area on which the work was done, and
(c) the rental for any one year is not reduced pursuant to this section by more than one-half.
31(2)A lessee may not make an application under subsection (1) with respect to a consolidated lease.
2012, c.34, s.6
Idem
32(1)Where any part of the amount referred to in section 31 is not credited to the rental of the year preceding, the rental for any subsequent year shall be reduced subject to paragraph 31(c) by the amount of that part.
32(2)Notwithstanding subsection (1), the rental shall not be reduced pursuant to section 31 for any year following a year in which commercial production has commenced.
CONSOLIDATED LEASES
2012, c.34, s.7
Consolidated leases
32.1(1)A lessee may apply to the Minister in writing for a consolidated lease by which the lease areas included in more than one lease will be grouped as a single lease area.
32.1(2)The Minister may grant a lessee a consolidated lease if
(a) the leases proposed to be consolidated are held by the same lessee, and
(b) the lease areas are contiguous.
32.1(3)Before the Minister grants a consolidated lease, the Minister shall require the lessee to do the following:
(a) deposit with the Minister of Finance and Treasury Board an amount at least equivalent to the work requirement prescribed by regulation for the first year of the term of the consolidated lease; and
(b) pay to the Minister of Finance and Treasury Board the annual rent prescribed by regulation for the first year of the term of the consolidated lease, less any annual rent previously paid for that period, or a portion of that period, with respect to a lease area grouped under the consolidated lease.
2012, c.34, s.7; 2019, c.29, s.110
GROUPING OF LEASES
Repealed: 2001, c.20, s.26
2001, c.20, s.26
Repealed
33Repealed: 2001, c.20, s.27
2001, c.20, s.27
FORFEITURE
Forfeiture
34(1)Where a lessee or licensee does not make the deposit or pay the rental required by regulation within thirty days from the date the deposit or rental is due, the Minister shall give written notice to the lessee or licensee as the case may be, specifying the default.
34(2)If the default referred to in subsection (1) is not remedied within thirty days of the date of the Minister’s notice under subsection (1), the licence to search or lease, as the case may be, shall be cancelled by the Minister.
34(3)Where a lessee or licensee violates any provision of this Act or the regulations other than those referred to in subsection (1), the Minister may give written notice to the lessee or licensee, as the case may be, specifying the violation.
34(4)Unless the lessee or licensee, as the case may be, remedies or prepares to remedy the violation to the satisfaction of the Minister within thirty days from the date of the Minister’s notice referred to in subsection (3), or such earlier time as is provided by regulation, the Minister shall cancel the lease or licence to search.
SURVEYS
Surveys
35For the purposes of this Act, a location shall be based on the survey system as set forth by regulation.
POWERS OF THE MINISTER
Powers of the Minister
36The Minister may
(a) designate a field by describing the surface area thereof;
(b) designate a pool by describing the surface area vertically above the pool, and by naming the geological formation and the zone in which the pool occurs;
(c) determine whether a field or pool as described under paragraph (a) or (b) is to be operated for the production of oil or natural gas, or both;
(d) designate the area that is to be allocated to a well in connection with fixing allowable production;
(e) control and regulate the production of oil, natural gas, and water by restriction, proration, or prohibition;
(f) require the disposal into an underground formation or otherwise, in accordance with such terms and conditions as he prescribes, of any water produced;
(g) prescribe the conditions under which drilling operations are to be carried out in a water-covered area, and any special measure to be taken in such operations;
(g.1) determine special spacing areas;
(h) prescribe other than a normal spacing area in any field, pool, or other area; and
(i) prescribe what constitutes paying quantity with respect to any well drilled within the Province.
1984, c.53, s.5; 2001, c.20, s.28
Power of Minister to restrict oil or natural gas produced
37The Minister may restrict the amount of oil or natural gas, or both, that may be produced in the Province by
(a) fixing a Provincial allowable rate of production for oil not exceeding the market demand as determined by the Minister,
(b) allocating the Provincial allowable rate of production for oil in a reasonable manner among the producing pools in the Province by fixing the amount of oil that may be produced from each pool without waste to meet the Provincial allowable rate of production so determined,
(c) distributing the portion of the Provincial allowable rate of production allocated to a pool among the wells in the pool in such a manner that each lessee is to produce or receive his fair share of the oil in the pool, and
(d) limiting the total amount of natural gas that may be produced from any pool without waste, having regard to the market demand for natural gas, as determined by him, to an amount required for the efficient use of natural gas for the production of oil and for the efficient utilization of the natural gas reserve of the Province.
1984, c.53, s.6
Powers of Minister to prevent waste
38In order to prevent waste, the Minister may
(a) require the repressuring, recycling, or pressure maintenance of any pool or portion thereof, and for or incidental to that purpose require the introduction or injection into any pool or portion thereof of natural gas, air, water, or other substance, and
(b) require that any natural gas be gathered and processed if necessary, and that the natural gas or liquid hydrocarbon extracted therefrom be marketed or injected into an underground reservoir for storage or for any other purpose.
Duty of Minister to approve schemes
39No person shall proceed with a scheme for
(a) repressuring, recycling, or pressure maintenance in any field or pool,
(b) the processing, storage, or disposal of natural gas, or
(c) the gathering, storage and disposal of water produced from any field or pool,
unless the Minister, by order, has approved the scheme upon the terms and conditions the Minister prescribes.
1990, c.61, s.96
PREVENTION OF LOSS OR DAMAGE
Prevention of loss or damage
40If at any time an escape of oil or natural gas from a well is not prevented or if a flow of water is not controlled, the Minister may take such means as appear to him to be necessary or expedient in the public interest to control and prevent the escape of oil, natural gas, or water.
Order to prohibit production or shut down, direction to discontinue operation
41(1)Where the Minister is satisfied, after an inquiry held upon notice given to such persons as he deems proper, that a well is being operated in such a manner that any provision of this Act or the regulations is contravened or not complied with, he may order that on and after a date to be fixed by him no production is to be permitted from the well and that it is to be shut in and kept shut in until such time as he directs to the contrary.
41(2)Where, in the opinion of the Minister, waste, damage to property, or pollution can be prevented, he may direct that a well be shut down pending an inquiry under subsection (1), which shall be held within fifteen days of the making of the direction.
41(3)Where it appears to the Minister that a method or practice being employed in any drilling, completion, suspension, abandonment, or production operation is in any way inadequate, improper or hazardous, he may direct orally, confirmed by a note in the daily drilling report, that the operation be discontinued until methods approved by him are adopted.
Power of Minister to close area
42(1)Where the Minister is of the opinion that, because of hazardous conditions in a field or at a well, it is necessary or expedient to close any area and to shut out therefrom all persons except those that are specifically authorized by him, he may designate in writing the area to be closed prohibiting anyone from entering, travelling about, or remaining therein without a travel permit issued under his authority.
42(2)The Minister may provide for such notice as is practicable under the circumstances, and may cause the notice setting out the area to be closed to be published as in his opinion gives adequate publicity.
42(3)In addition to the notice provided by subsection (2), the Minister shall advise an appropriate representative of the Minister of Transport of Canada of his action under this section.
Power of Minister to do whatever is necessary, liability for cost of well control
43(1)Without restricting the generality of section 42, if in the opinion of the Minister, the control of a well or any completion, suspension, or abandonment is not in accordance with a direction, or requirement of the Minister, he, or any person duly authorized by him, shall have access to and may enter upon the well site or any structure thereon and do whatever the Minister deems necessary because of the failure to comply with the direction or requirement.
43(2)The Minister of Finance and Treasury Board may use or expend all or any part of a security deposit furnished by the well licensee to defray the cost of, as determined by the Minister, or the cost incidental to the work of control, completion, suspension, or abandonment of the well to the satisfaction of the Minister.
43(3)The return of the deposit or any part thereof, does not relieve the well licensee of liability for any cost of or the cost incidental to the control, completion, suspension or abandonment of a well and does not reduce his liability for such cost.
43(4)The cost incurred by the Minister under this section remaining unpaid after applying thereto the security deposit of the well licensee held by the Minister of Finance and Treasury Board is a debt payable by the well licensee to the Crown.
2019, c.29, s.110
Enforcement of direction, taking of possession, costs and expenses, net proceeds
44(1)The Minister, for the enforcement of any direction or requirement prescribed by him under sections 42 and 43 may
(a) take such steps and employ such persons as he considers necessary,
(b) forcibly or otherwise enter upon, seize, and take possession of any well, together with the whole or part of the movable and immovable property in, on, or about the well or used in connection therewith or appertaining thereto together with any of the records pertinent thereto,
(c) either discontinue all production or take over the management and control of it,
(d) plug the well at any depth, and
(e) take such steps as he considers necessary to prevent the flow of or escape of oil, natural gas, or water from any stratum that the well enters.
44(2)Upon the Minister taking possession of a well and as long as such possession continues, every officer and employee of the well licensee, his agent, or contractor shall obey the directions or requirements concerning the well given by the Minister, or by such person placed in charge or control of the well by the Minister.
44(3)Upon possession being taken of any well, the Minister may take, deal with, and dispose of all oil and natural gas produced at the well as if it were the property of the Crown, subject to the payment of the net proceeds thereof as provided in this section.
44(4)The costs and expenses of, and the costs and expenses incidental to, a proceeding taken by the Minister under this section are at the discretion of the Minister, and he may direct by whom, to whom, and to what extent they are to be paid.
44(5)Without restricting the generality of the foregoing subsections, the Minister may pay, from the proceeds of the oil and natural gas produced at the well
(a) all costs and expenses incidental to the proceedings taken by the Minister under this section, including the costs and expenses of the management, operation, and control of the well by the Minister, and
(b) all costs and expenses of carrying out investigations and conservation measures that the Minister deems necessary in connection with the well.
44(6)The net proceeds of the oil and natural gas produced at the well remaining after the payment of the costs and expenses under subsection (5) shall be paid by the Minister into The Court of King’s Bench of New Brunswick in accordance with the Rules of The Court of King’s Bench of New Brunswick under the Judicature Act.
44(7)If the proceeds of the oil and natural gas produced at the well are not sufficient to pay all costs and expenses of, or incidental to, a proceeding, investigation, or measure taken, and the Minister directs that the balance of the costs and expenses or any part thereof are to be paid by the well licensee, then the provisions of section 43 regarding the use of the security deposit and regarding the further liability of the well licensee with respect to the costs referred to in that section apply, mutatis mutandis, to the use of such security deposit, and to the further liability of the well licensee, to defray the balance of the costs and expenses that are incurred under this section.
1979, c.41, s.89; 2023, c.17, s.182
SAVINGS
Savings
45The inclusion in a licence to search or a lease of oil or natural gas that does not belong to or is not reserved to the Crown in right of the Province does not invalidate such licence to search or lease with respect to the remainder of the licence to search or lease.
1984, c.53, s.7
UNIT AGREEMENT
Unit agreement
46The Minister may enter into a unitization agreement for the unitized operation of a field or pool or any part thereof, and upon the execution of such agreement it is binding on all parties thereto.
NOTIFICATION OF EXPLORATION WORK
Notification of exploration work
47No person shall commence exploratory work or production of oil or natural gas until the person has notified the Minister in writing of the person’s intention to do so.
2001, c.20, s.29
TRANSFERS AND ASSIGNMENTS
Transfers and assignments
48(1)A licensee or lessee shall not assign, transfer, sublet or abandon the possession of the rights described in his licence to search or lease, or any part thereof without the approval of the Minister.
48(2)No transfer, assignment, agreement or instrument affecting the title to a licence to search or a lease is to be recorded or effective unless
(a) the transfer, assignment, agreement, or instrument does not conflict with, or result in any conflict with, the provisions of this Act or the regulations, and
(b) the transfer, assignment, agreement or instrument is made by or on behalf of, the licensee or the lessee.
48(3)Upon approval by the Minister a transfer, assignment, agreement, or instrument affecting the title to a licence to search or a lease is deemed to be recorded and to be effective from and after the time that the application to record the transfer, assignment, agreement, or instrument is received by the Minister.
48(4)Failure to record a transfer, assignment, agreement or instrument affecting the title to a licence to search or a lease does not invalidate the transfer, assignment, agreement, or instrument as between the parties thereto, but subsection (2) governs the effectiveness thereof with respect to another person.
48(5)No transfer, assignment, agreement, or instrument affecting title to a licence to search or a lease is to be recorded unless it is accompanied by the fee as prescribed by regulation.
48(7)Where, by an instrument made pursuant to section 177 of the Bank Act, as enacted by section 2 of the Banks and Banking Law Revision Act, 1980, chapter 40 of the Statutes of Canada, 1980-81-82-83, a lease of oil or natural gas, or both, or any interest in such lease, is assigned, transferred, or set over as security to a Canadian chartered bank by the lessee, or by a person having an interest in the lease, there shall be registered with the Minister upon payment of the fee as prescribed by regulations
(a) an original of the instrument giving the security, or
(b) a copy of the instrument giving the security certified by an officer or employee of the bank to be a true copy.
48(8)A holder of a licence to search or a lease may make a valid transfer of his licence to search or lease, directly to himself, jointly with another or to another, and where the licence to search or lease is held by more than one person, they may make a transfer directly to one or more of their number either alone or jointly with some other person, and a trustee, executor, or administrator may make a valid transfer of a licence to search or lease to himself individually where the making of the transfer is otherwise within his power.
1984, c.53, s.8; 1985, c.19, s.6
CONFIDENTIAL INFORMATION
Confidential information
49(1)Subject to subsection (2) any record and instruments relating to an oil and natural gas title recorded pursuant to this Act shall, during normal office hours, be open to public inspection free of charge.
49(2)Geological, geophysical, well and other reports, and well data received by the Minister in the course of the administration of this Act, and designated as confidential by the Minister or by the owner of the data with the permission of the Minister, shall not be released by the Minister sooner than the time period specified in the regulations unless written permission is obtained from the owner.
49(3)If this section is inconsistent with or in conflict with a provision of the Right to Information and Protection of Privacy Act, this section prevails.
2013, c.34, s.23
MISCELLANEOUS
Registration with Minister of address for service
50Every licensee, well licensee, lessee, geophysical licensee and permittee shall register with the Minister an address for service.
1985, c.19, s.7
Execution of licence to search and lease by Minister
51Every licence to search and lease shall be executed on the part of the Crown by the Minister under his hand and seal, and shall be kept on file in the office of the Minister and a duplicate thereof, or a copy thereof, certified by the Minister, shall be executed and delivered to the licensee or lessee, and shall in all courts have the same effect and force as the original on file in the office of the Minister.
Specific order of Minister
52In any case, where the Lieutenant-Governor in Council may make a regulation of general or particular application, the Minister may, if it appears to him necessary to do so for the preservation or protection of life or property, or oil and natural gas, or an oil and natural gas field or part thereof, or any well or other work, or any investment, make a specific order directed to a particular person which order shall without publication in The Royal Gazette, be of the same effect as a regulation, for such period not exceeding thirty days as the Minister specifies in such order, but the Lieutenant-Governor in Council or the Minister may at any time revoke or suspend any such order.
Repealed
53Repealed: 1983, c.8, s.26
1983, c.8, s.26
FORM OF DEPOSIT
Form of deposit
54Any security required under this Act or the regulations hereunder shall be made payable to the Minister of Finance and Treasury Board of the Province and shall be
(a) in an amount specified in the Act or regulations, or if not specified in the Act or regulations in an amount satisfactory to the Minister,
(b) deposited with the Minister of Finance and Treasury Board, and
(c) in the form of
(i) a deposit of money,
(ii) a negotiable bond signed over to the Province,
(iii) an irrevocable documentary credit or letter of credit from a bank or other lending institution acceptable to the Minister which is negotiable only by the Minister, or
(iv) a bond from a surety company licensed to do business in the Province.
1984, c.53, s.9; 2013, c.12, s.10; 2019, c.29, s.110
ROYALTIES
Royalties
55Royalties are reserved to the Crown in the right of the Province on oil and natural gas and any associated product or by-product, including sulphur, helium and condensate, obtained from any licence to search or lease acquired under this Act, and are payable in such amount and in such manner as from time to time is prescribed by the Lieutenant-Governor in Council.
Idem
56(1)A deduction may be allowed when computing the royalty on petroleum condensate, natural gas and any by-products of oil and natural gas for the cost, charge and expense incurred in gathering or processing as specified by the Minister.
56(2)Notwithstanding section 55, the Lieutenant-Governor in Council may authorize the Minister to enter into an agreement establishing the amount of royalty to be paid and the method of calculating the royalty on oil and natural gas and any associated product or by-product produced from a unitized operation, or as a result of a conservation scheme, plan or project, including but not limited to, an injection or pressurization scheme.
FEES, FINES AND PENALTIES
1984, c.53, s.10
Fees, fines and penalties
57(1)A person who violates any provision of the regulations commits an offence that is, subject to subsection (2), punishable under Part II of the Provincial Offences Procedure Act as a category B offence.
57(2)A person who violates or fails to comply with a provision of the regulations in respect of which a category has been prescribed under paragraph 59(g.1) commits an offence of the category prescribed by regulation.
57(3)A person who violates or fails to comply with section 50 commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category C offence.
57(4)A person who violates or fails to comply with
(a) subsection 4(1), 4(2) or 9(1), paragraph 12(a) or 12(b) or section 23 or subsection 24(1), 24(2) or 24(3), or
(b) any order made under this Act,
commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category E offence.
57(5)A person who violates or fails to comply with subsection 7(2), 16(3), 25(1) or 25(2) or paragraph 39(a), 39(b) or 39(c) or section 47 commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category F offence.
57(6)A person who violates or fails to comply with subsection 44(2) commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category J offence.
57(7)Where an offence under this Act continues for more than one day,
(a) the minimum fine that may be imposed is the minimum fine set by the Provincial Offences Procedure Act multiplied by the number of days during which the offence continues, and
(b) the maximum fine that may be imposed is the maximum fine set by the Provincial Offences Procedure Act multiplied by the number of days during which the offence continues.
1984, c.53, s.10; 1985, c.19, s.8; 1990, c.61, s.96
Idem
58A fee collected under this Act shall be made payable to the Minister of Finance and Treasury Board and submitted to the Minister.
1984, c.53, s.11; 1990, c.61, s.96; 2019, c.29, s.110
REGULATIONS
Regulations
59(1)The Lieutenant-Governor in Council may make regulations
(a) respecting the method of granting and renewing a lease or licence to search and the terms and conditions of a lease or licence to search and prescribing the fees payable for a lease or licence to search;
(b) respecting the method of registering and transferring a licence to search and a lease and the method of designating the former as either an off-shore or on-shore licence to search;
(b.1) respecting an application under section 21.01;
(b.2) prescribing fees for the purposes of section 21.01;
(b.3) prescribing the expiry date of a consolidated lease;
(b.4) prescribing when the annual rental fee is due and payable with respect to a consolidated lease;
(b.5) establishing the reporting requirements under a consolidated lease;
(b.6) prescribing the amount of a deposit required under paragraph 32.1(3)(a) and when the deposit is due and payable;
(b.7) establishing the penalties to be imposed on a lessee under a consolidated lease for failing to meet the prescribed work commitments, including providing for a monetary penalty and the release to the Crown of portions of the lease area;
(b.8) providing for the accounting of shortfalls and credits of expenditures under a consolidated lease;
(c) defining the kind and quantity of work acceptable to the Minister and the manner and form in which such work is to be submitted to the Minister;
(d) Repealed: 2001, c.20, s.30
(e) respecting the terms and conditions under which a security deposit is made, and the amount of the deposit required to guarantee the performance of work or to protect public and private property;
(f) prescribing the fee or rental payable for any right or service given under this Act;
(g) fixing the royalties to be paid to the Crown;
(g.1) prescribing, in relation to offences under the regulations, categories of offences for the purposes of Part II of the Provincial Offences Procedure Act;
(h) respecting the method of granting and renewing geophysical licences and the terms and conditions thereof and prescribing the fees payable therefor; and respecting the form, the method of granting and renewing, the terms and conditions of and the cancellation of geophysical permits and prescribing the fees payable therefor;
(i) governing the method, manner and location in which and where geophysical exploration is to be carried out;
(i.1) respecting the testing of water wells, including the circumstances under which the testing is required, the method of taking the test, the submission of the results of the testing to the Minister and the Minister of Environment and Climate Change and the notification of any person of the results of the testing;
(j) Repealed: 2012, c.34, s.10
(j.1) respecting well locations;
(k) subject to section 36, respecting normal and special spacing units and areas;
(l) prohibiting the drilling of a well at any point within a prescribed distance of any boundary, roadway, right of way, building of any specified type, or any specified work, either public or private;
(m) respecting the part of a spacing area within which a well is to be completed, and providing penalties for and prohibitions against completing the well in any other part of the spacing area;
(n) respecting the terms and conditions under which a well is to be deepened, completed, recompleted, suspended, drilled, operated, reworked to alter the producing characteristics or modified;
(o) respecting the measures to be adopted to confine any oil, natural gas, or water encountered during a drilling or completion operation to its original stratum, and to protect the contents of the stratum from infiltration, inundation, and migration;
(p) respecting the minimum standard for tools, casing, equipment and material that can be used for drilling, completion, development and production of oil or natural gas;
(q) respecting the manner of drilling and completing a multi-zone producing or injection well;
(q.1) respecting the manner of drilling and completing a well which produces, or may produce, oil, natural gas or condensate;
(r) respecting the manner of drilling through oil, natural gas, water, coal or other mineral deposits;
(s) respecting well casing standards including the proper anchorage, cementation and barrier protection of the well casing;
(t) respecting the taking and method of taking of samples of any kind and the submission thereof to the Minister;
(u) respecting the method of taking of any test, analysis, assessment, survey and log and the obtaining of other necessary information and the submission of all such records and information;
(v) respecting the measures to be taken before the commencement of drilling and completion and during drilling, completion and production to conserve any oil, natural gas or water;
(w) respecting the methods of operation to be observed during drilling and completion and in the subsequent management of any well and the conduct of any operation for any purpose, including, without restricting the generality of the foregoing, consideration with regard to
(i) the protection of life and property,
(ii) the prevention and extinguishment of fire,
(iii) the prevention of a well from flowing out of control, and
(iv) the prevention of pollution of water;
(x) respecting the methods of operation to be observed in relation to the abandonment of any well;
(x.1) respecting the methods of operation to be observed in relation to the plugging of a shothole or testhole;
(y) regulating the location, operation and equipping of a production battery;
(z) regulating the conditioning or reconditioning of a well by mechanical, chemical, or explosive means;
(aa) regulating the inspection of a well both during and after drilling and completion;
(bb) providing for the capping or otherwise closing in of a well for the purpose of preventing waste;
(cc) respecting the method to be used in the measurement of oil, natural gas and water and the standard conditions to which such measurement is to be converted;
(dd) requiring the cleaning-out of a well;
(ee) regulating the unitization of a pool or field for the purpose of drilling and producing;
(ff) respecting records that must be maintained and filed with the Minister;
(gg) regulating the release of a well record and well data and of reports and information required to be submitted to the Minister under this Act or the regulations;
(hh) regulating the naming of wells and batteries;
(ii) regulating general conservation of oil and natural gas, the waste or improvident disposition thereof, and any other matter incidental to the development, drilling and completion of an oil and natural gas well, the operation thereof, and the production therefrom;
(jj) establishing a tariff of fees for the granting and amendment of a well licence and the approval of a transfer of a well licence;
(jj.1) prescribing information to accompany an application for a well licence or for an amendment to a well licence;
(kk) establishing the amount and disposition of any deposit required under the Act or regulations;
(ll) respecting the survey system for the purposes of this Act;
(mm) respecting the posting of signs at well sites;
(nn) governing the location, the establishment and the operation of underwater storage facilities;
(oo) governing amounts of plant effluent and the manner of its disposal;
(oo.1) prohibiting the hydraulic fracturing of a well;
(oo.2) prohibiting the use of certain fluids for hydraulic fracturing;
(oo.3) prohibiting specific volumes of fluids to be used at each fracture stage;
(oo.4) prohibiting hydraulic fracturing at specified depths;
(oo.5) prohibiting the use of certain chemicals, additives or proppants in the fluids used for hydraulic fracturing;
(oo.6) regulating and restricting the hydraulic fracturing of a well, including, but not limited to:
(i) the use of certain fluids for hydraulic fracturing;
(ii) the volume of fluid to be used at each fracture stage;
(iii) the depth at which hydraulic fracturing is allowed;
(iv) the use of certain chemicals, additives or proppants in the fluids used for hydraulic fracturing; and
(v) regulating and restricting any combination of subparagraphs (i) to (iv);
(oo.7) prescribing the maximum quantity or concentration of chemicals, additives or proppants allowed to appear in the fluids used for hydraulic fracturing;
(oo.8) respecting the measures to be taken before the commencement of a hydraulic fracturing program, including, but not limited to:
(i) conducting an assessment of inter-wellbore communication;
(ii) conducting an assessment of the geological containment;
(iii) pressure testing;
(iv) reporting to the Minister the type of fluid to be used for hydraulic fracturing;
(v) reporting to the Minister the volume of fluid to be used for each fracture stage; and
(vi) completing and submitting a prehydraulic fracturing checklist, on a form provided by the Minister, to the Minister;
(oo.9) respecting the measures to be taken and the methods of operation to be observed during a hydraulic fracturing program, including, but not limited to, monitoring, testing and recording surface injection pressure, fluid rate, slurry rate, annulus pressures and chemical, additives or proppant concentration;
(oo.10) respecting the measures to be taken after the completion of a hydraulic fracturing program, including, but not limited to:
(i) reporting to the Minister the type of fluid used for hydraulic fracturing; and
(ii) reporting to the Minister the volume of fluid used for each fracture stage;
(pp) respecting the measures to be taken when hydrogen sulphide is encountered or anticipated to be encountered during drilling;
(pp.1) defining any word or expression used in but not defined in this Act;
(qq) empowering the Minister to grant exemptions in particular cases from specified provisions of the regulations;
(rr) governing generally all matters deemed advisable and convenient for the purpose of carrying into effect the provisions of this Act.
59(1.1)Regulations under paragraph (1)(f) may prescribe different rental amounts for different sections of a licence area or lease area, as the case may be.
59(2)A regulation made under subsection (1) may adopt by reference, in whole or in part, with such changes as the Lieutenant-Governor in Council considers necessary, any code, standard, procedure or specification and may require compliance with the code, standard, procedure or specification.
59(3)The power to adopt by reference and require compliance with a code, standard, procedure or specification in subsection (2) includes the power to adopt a code, formula, standard, procedure or specification as it may be amended from time to time.
59(4)Repealed: 2015, c.4, s.8.
59(5)Repealed: 2015, c.4, s.8.
1984, c.53, s.12; 1985, c.19, s.9; 1987, c.6, s.75; 1990, c.61, s.96; 2001, c.20, s.30; 2012, c.34, s.10; 2013, c.12, s.11; 2015, c.4, s.8; 2020, c.25, s.80
TRANSITIONAL
Transitional
60(1)Nothing herein contained shall prejudicially affect any lease or licence to search covering oil and natural gas heretofore granted by the Crown; and that certain Mining Lease No. 115 bearing date the sixteenth day of August, 1907, as amended by agreement dated 10 July, 1958, as amended by agreement dated 6 September, 1966 and as amended by agreement dated 29 November, 1973, granted by the Crown to the New Brunswick Petroleum Company (Limited), its successors and assigns, the foregoing being collectively hereinafter referred to in this section as “Lease No. 115” is hereby confirmed and ratified according to its terms, the area described therein being deemed to include the off-shore areas described in the amending agreement dated 29 November, 1973.
60(2)Notwithstanding subsection (1), regulations respecting exploration, drilling, production, conservation and royalty rates apply to Lease No. 115.
60(3)Upon termination of Lease No. 115 in accordance with its terms the Minister, upon application by the lessee shall issue a licence to search to New Brunswick Oilfields Limited, successor in title to New Brunswick Petroleum Company (Limited), over those lands to be retained by New Brunswick Oilfields Limited, upon termination of Lease No. 115 and such licence shall conform in all respects to the Act and regulations from its date of issue.
Repeal
61The Oil and Natural Gas Act, chapter O-2 of the Revised Statutes, 1973, is repealed.
Commencement
62This Act or any provision thereof comes into force on a day to be fixed by proclamation.
N.B. This Act was proclaimed and came into force November 1, 1976.
N.B. This Act is consolidated to June 16, 2023.