Acts and Regulations

2001-66 - Licence to Search and Lease

Full text
Current to 1 January 2024
NEW BRUNSWICK
REGULATION 2001-66
under the
Oil and Natural Gas Act
(O.C. 2001-433)
Filed September 21, 2001
Under section 59 of the Oil and Natural Gas Act, the Lieutenant-Governor in Council makes the following Regulation:
Citation
1This Regulation may be cited as the Licence to Search and Lease Regulation - Oil and Natural Gas Act.
Definitions
2(1)In this Regulation
“Act” means the Oil and Natural Gas Act; (Loi)
“engineer” means an engineer as defined under the Engineering and Geoscientist Professionals Act, chapter 88 of the Acts of New Brunswick, 1986; (ingénieur)
“geoscientist” means a geoscientist as defined under the Engineering and Geoscientist Professionals Act, chapter 88 of the Acts of New Brunswick, 1986; (géoscientifique)
“grid area” Repealed: 2016-16
“grid map” means the New Brunswick Standard Oil and Natural Gas Grid Map referred to in the Survey System Regulation - Oil and Natural Gas Act; (carte de quadrillage)
“producing well” means a well for which a licensee or a lessee, as the case may be, is required to pay royalties for oil or natural gas, or was required to pay royalties for oil or natural gas at any time during the previous 12 months, but does not include a well that produces oil for the purposes of a production test;(puits producteur)
“section” means a section as established by the Survey System Regulation - Oil and Natural Gas Act;(section)
“unit” means a gigajoule.(unité)
“weighted average selling price” , in relation to a particular period of time, means the total gross revenue from sales of natural gas in the period divided by the total number of units of natural gas sold in the period;(prix de vente moyen pondéré)
2(2)Exploratory work acceptable to the Minister includes
(a) test drilling,
(b) regional mapping,
(c) surveying,
(d) bulldozing,
(e) geological, geophysical and geochemical exploration, and
(f) other examinations and investigations related to subsurface geology.
2014-28; 2016-16
Application for a licence to search
3(1)An application for a licence to search shall be on a form provided by the Minister and shall be accompanied by
(a) a map of the area for which the application is made;
(b) a description of the area referred to in paragraph (a) in accordance with the grid map;
(c) a statement of the extent, character and anticipated expenditure of the exploratory work proposed; and
(d) a statement of the applicants financial ability to carry out the exploratory work proposed.
3(2)The Minister shall endorse on each application the date and time the application is received.
Call for tenders for a licence to search
4(1)A call for tenders for the purchase of a licence to search under section 17 of the Act shall
(a) be by publication of a notice of the call for tenders in The Royal Gazette and in such other publication as the Minister considers appropriate at least sixty days before the tender closing date,
(b) state the location where the information to bidders package may be obtained, the fees payable for the package, the tender closing time and date and the place where the tender submission is to be deposited,
(c) state the portion of the deposit referred to in paragraph (2)(a), expressed as a percentage, to be returned upon successful completion of the work to the licensee at the conclusion of the term of the licence to search,
(d) state the annual rental fee for the first year of the term of the licence to search, and
(e) state the tender fee.
4(2)A tender for the purchase of a licence to search under section 17 of the Act shall contain
(a) a deposit in an amount equal to one hundred per cent of the tendered value of the work to be performed during the term of the licence to search, such amount which shall be equal to or greater than the amount prescribed in Schedule B on each hectare covered by the licence to search,
(b) an undertaking to perform the work during the term of the licence to search,
(c) the annual rental fee for the first year of the term of the licence to search in the amount prescribed in Schedule A for each hectare covered by the licence to search,
(d) a statement of the work to be done and the expenditures to be made by the applicant during the term of the licence to search, and
(e) the tender fee prescribed in Schedule A.
4(3)All unsuccessful tenders and accompanying documents except the tender fee shall be returned to the applicant.
Grant of a licence to search
5(1)Where a call for tenders is made under section 17 of the Act and one or more acceptable tenders have been received, the Minister may grant a licence to search to the successful applicant within thirty days after the closing date of the call for tenders.
5(2)Where a licence to search is granted under subsection (1), the date of issuance shall be specified in the licence document.
5(3)Where a licence to search is granted under subsection (1), the non-refundable portion of the deposit referred to in subsection 4(2)(a) accompanying the successful bid shall be retained by the Crown.
Terms and conditions of a licence to search
6The following are terms and conditions of a licence to search:
(a) a licensee shall comply with the provisions of the Act and this Regulation; and
(b) a licensee shall submit such plans of exploratory work as the Minister may require.
Annual rental fee for a licence to search
2016-16
7(1)Subject to subsection (7), the annual rental fee prescribed in Schedule A for different sections of a licence area is due and payable in the second year and third year of the term of the licence to search and in each year of an extended period of a licence to search at least 30 days before the anniversary date of the granting of the licence to search.
7(2)Any annual rental fee that is paid before the date of the commencement of this section for the year of the term of the licence to search in progress on that date and that relates to a section of a licence area on which there are no producing wells shall be refunded on a pro-rated basis for the period beginning on the commencement of this section and ending on the next anniversary date of the granting of the licence to search, both dates inclusive.
7(3)On the request of the Minister, a licensee shall file with the Minister a record containing any information the Minister may require with respect to a well located on a section of the licence area.
7(4)If a well ceases to be a producing well on a section of a licence area that does not have any other producing wells located on it, the licensee shall, within 10 days after the well ceased to be a producing well, notify the Minister in writing that there are no producing wells located on that section.
7(5)If, on or after the commencement of this section, a well ceases to be a producing well on a section of a licence area that does not have any other producing wells located on it, any annual rental fee paid for the section for the year of the term of the licence to search in progress on the date the well ceased to be a producing well shall be refunded on a pro-rated basis for the period beginning on that date and ending on the next anniversary date of the granting of the licence to search, both dates inclusive.
7(6)If a well becomes a producing well on a section of a licence area that, immediately before the well became a producing well, had no producing wells located on it, the licensee shall, within 10 days after the well becomes a producing well, notify the Minister in writing that a producing well is located on that section.
7(7)If a well becomes a producing well on a section of a licence area that, immediately before the well became a producing well, had no producing wells located on it, the licensee shall, within 60 days after the well becomes a producing well, pay a pro-rated portion of the annual rental fee for the section for the period beginning on the date the well becomes a producing well and ending on the next anniversary date of the granting of the licence to search, both dates inclusive.
2016-16
Exploratory work requirement under a licence to search
8During the term of the licence to search, a licensee shall do or cause to be done exploratory work equal to the tendered value of the work.
Redistribution of exploratory work expenditures
2012-78
8.1An application under section 21.01 of the Act for a redistribution of the expenditures required for exploratory work shall
(a) be on a form provided by the Minister, and
(b) be submitted no more than once in a calendar year.
2012-78
Repealed
2012-78
8.2Repealed: 2015-29
2012-78; 2015-29
Report requirements under a licence to search
9(1)The licensee shall submit, within ninety days after the expiration, cancellation or surrender of a licence to search, a report containing a statement with respect to the total expenditures made by the licensee and such other geophysical, geological, engineering and other data and information as the Minister may require.
9(2)Where expenditures are made by the licensee for exploration outside the licence area for the purpose of obtaining data which in the opinion of the Minister is of value in assessing the potential of the licence area, the Minister, on written application by the licensee, may consider the expenditure to have been made within the licence area.
9(3)A statement of expenditure submitted under this section shall be accompanied by an affadavit of the licensee attesting to its accuracy and correctness.
9(4)Geological, geophysical, engineering or other data or information submitted under this section shall be attested to, as to its accuracy, by an engineer or a geoscientist.
9(5)A report submitted under this section shall include but is not limited to, three copies of
(a) a geological report with respect to the licence area, including geological maps showing the location of wells drilled on the licence area, cross-sections and stratigraphic data,
(b) a geophysical report with respect to the licence area, including gravity, seismic and magnetic data, and
(c) reports of geophysical surveys that were conducted, including well logs and well tests data resulting from exploratory wells that were drilled in the licence area.
9(6)The Minister may, on written application by the licensee before the required date of the submission of the report under subsection (1), grant an extension of the period required for the submission of the report but in no case shall the extension exceed ninety days.
Return of deposit
10(1)If the value of the exploratory work performed during the term of a licence to search is satisfactory to the Minister, on receipt of a report that is acceptable to the Minister, the Minister shall return to the licensee that portion of the deposit specified in the call for tender.
10(2)If, in the opinion of the Minister, a licensee has not done or caused to be done exploratory work during the term of the licence to search equal to the amount tendered as a deposit under paragraph 4(2)(a), the portion of the deposit that is equal to the deficiency is forfeited to the Crown.
10(3)Notwithstanding any other provision of this Regulation, where, in the opinion of the Minister, a licensee has not complied with the Act or this Regulation, the Minister may delay the return of all or a portion of the licensees deposit that is refundable until the licensee complies with the Act or this Regulation.
2012-78; 2015-29
Conversion to lease
11(1)An application to convert a licence to search to a lease under section 27 of the Act shall be on a form provided by the Minister and shall be accompanied by
(a) a map of the area for which the application is made;
(b) a description of the area referred to in paragraph (a) in accordance with the grid map; and
(c) the application fee for a lease prescribed in Schedule A and the rental fee prescribed in Schedule A for the first year of the lease.
11(2)A lease may be granted if the Minister is satisfied that the work undertaken under subsection 4(2) or work which is equivalent to that described in subsection 4(2) has been completed and an acceptable report submitted under section 10.
Application for a lease
12An application for a lease under 27.1 of the Act shall be on a form provided by the Minister and shall be accompanied by
(a) a map of the area for which the application is made,
(b) a description of the area referred to in paragraph (a) in accordance with the grid map,
(c) a statement of the extent, character and anticipated expenditure of the work proposed, and
(d) a statement of the applicants financial ability to carry out the work proposed.
Call for tenders for a lease
13(1)A call for tenders for the purchase of a lease under section 27.1 of the Act shall
(a) be by publication of a notice of the call for tenders in The Royal Gazette and in such other publication as the Minister considers appropriate at least sixty days before the tender closing date,
(b) state the location where the information to bidders package may be obtained, the fees payable for the package, the tender closing time and date and the place where the tender submission is to be deposited,
(c) specify the amount of the minimum non-refundable cash bonus,
(d) state the annual rental fee for the first year of the term of the lease, and
(e) state the tender fee.
13(2)A tender for the purchase of a lease shall contain
(a) a non-refundable cash bonus equal to or greater than the minimum bonus specified in the notice of the call for tenders,
(b) a statement describing the work to be done and the expenditure to be made by the applicant during the initial term of the lease,
(c) the annual rental fee for the first year of the term of the lease in the amount prescribed in Schedule A for each hectare covered by the lease,
(d) a statement of the applicants financial ability to carry out the work proposed, and
(e) the tender fee prescribed in Schedule A.
13(3)All unsuccessful tenders and accompanying documents except the tender fee shall be returned to the applicant.
Grant of a lease
14(1)Where a call for tenders is made under section 27.1 the Act and one or more acceptable tenders have been received, the Minister may grant a lease to a successful applicant within thirty days after the closing date of the call for tenders.
14(2)Where a lease is granted under subsection (1), the date of issuance shall be specified in the lease document.
14(3)Where a lease is granted under subsection (1), the non-refundable cash bonus accompanying the successful bid shall be retained by the Crown.
Term and condition of a lease
15It is a term and condition of a lease that the lessee shall comply with the provisions of the Act and this Regulation.
Annual rental fee for a lease
16(1)Subject to subsection (7), the annual rental fee prescribed in Schedule A for different sections of a lease area is due and payable in the second year and subsequent years of the term of the lease and in each year of an extended period of a lease at least 30 days before the anniversary date of the granting of the lease.
16(2)Any annual rental fee that is paid before the date of the commencement of this section for the year of the term of the lease in progress on that date and that relates to a section of a lease area on which there are no producing wells shall be refunded on a pro-rated basis for the period beginning on the commencement of this section and ending on the next anniversary date of the granting of the lease, both dates inclusive.
16(3)On the request of the Minister, a lessee shall file with the Minister a record containing any information the Minister may require with respect to a well located on a section of the lease area.
16(4)If a well ceases to be a producing well on a section of a lease area that does not have any other producing wells located on it, the lessee shall, within 10 days after the well ceased to be a producing well, notify the Minister in writing that there are no producing wells located on that section.
16(5)If, on or after the commencement of this section, a well ceases to be a producing well on a section of a lease area that does not have any other producing wells located on it, any annual rental fee paid for the section for the year of the term of the lease in progress on the date the well ceased to be a producing well shall be refunded on a pro-rated basis for the period beginning on that date and ending on the next anniversary date of the granting of the lease, both dates inclusive
16(6)If a well becomes a producing well on a section of a lease area that, immediately before the well became a producing well, had no producing wells located on it, the lessee shall, within 10 days after the well becomes a producing well, notify the Minister in writing that a producing well is located on that section.
16(7)If a well becomes a producing well on a section of a lease area that, immediately before the well became a producing well, had no producing wells located on it, the lessee shall, within 60 days after the well becomes a producing well, pay a pro-rated portion of the annual rental fee for the section for the period beginning on the date the well becomes a producing well and ending on the next anniversary date of the granting of the lease, both dates inclusive.
2016-16
Report requirements under a lease
17(1)The lessee shall submit, within ninety days after the expiration, cancellation or surrender of a lease, a report containing a statement with respect to the total expenditures made by the lessee and such other geophysical, geological, engineering and other data and information as the Minister may require.
17(2)A statement of expenditure submitted under this section shall be accompanied by an affidavit of the lessee attesting to its accuracy and correctness.
17(3)Geological, geophysical, engineering or other data or information submitted under this section shall be attested to, as to its accuracy, by an engineer or a geoscientist.
17(4)A report submitted under this section shall include but is not limited to, three copies of
(a) a geological report with respect to the lease area, including geological maps showing the location of wells drilled on the lease area, cross-sections and stratigraphic data,
(b) a geophysical report with respect to the lease area, including gravity, seismic and magnetic data, and
(c) reports of geophysical surveys that were conducted, including well logs and well tests data resulting from exploratory wells that were drilled in the lease area.
Discontinuance of a portion of a lease
18Where the Minister discontinues a portion of a lease area, the Minister shall amend the description of the lease area included in the lease and forward a copy of the amended description to the lessee.
Expiry date of consolidated lease
2012-78
18.1A consolidated lease expires on the expiry date of the most recently granted lease that is included in the consolidated lease.
2012-78
Annual rental fee for a consolidated lease
2012-78
18.2(1)Subject to subsection (7), the annual rental fee prescribed in Schedule A for different sections of a lease area is due and payable in the second year and subsequent years of the term of the consolidated lease at least 30 days before the anniversary date of the granting of the consolidated lease.
18.2(2)Any annual rental fee that is paid before the date of the commencement of this section for the year of the term of the consolidated lease in progress on that date and that relates to a section of a lease area on which there are no producing wells shall be refunded on a pro-rated basis for the period beginning on the commencement of this section and ending on the next anniversary date of the granting of the consolidated lease, both dates inclusive.
18.2(3)On the request of the Minister, a lessee shall file with the Minister a record containing any information the Minister may require with respect to a well located on a section of the lease area.
18.2(4)If a well ceases to be a producing well on a section of a lease area that does not have any other producing wells located on it, the lessee shall, within 10 days after the well ceased to be a producing well, notify the Minister in writing that there are no producing wells located on that section.
18.2(5)If, on or after the commencement of this section, a well ceases to be a producing well on a section of a lease area that does not have any other producing wells located on it, any annual rental fee paid for the section for the year of the term of the lease in progress on the date the well ceased to be a producing well shall be refunded on a pro-rated basis for the period beginning on that date and ending on the next anniversary date of the granting of the consolidated lease, both dates inclusive.
18.2(6)If a well becomes a producing well on a section of a lease area that, immediately before the well became a producing well, had no producing wells located on it, the lessee shall, within 10 days after the well becomes a producing well, notify the Minister in writing that a producing well is located on that section.
18.2(7)If a well becomes a producing well on a section of a lease area that, immediately before the well became a producing well, had no producing wells located on it, the lessee shall, within 60 days after the well becomes a producing well, pay a pro-rated portion of the annual rental fee for the section for the period beginning on the date the well becomes a producing well and ending on the next anniversary date of the granting of the consolidated lease, both dates inclusive.
2012-78; 2016-16
Work deposit for a consolidated lease
2012-78
18.3In the second and subsequent years of the term of a consolidated lease, on or before the anniversary date of the granting of the lease, the lessee shall deposit with the Minister of Finance and Treasury Board an amount at least equivalent to the work requirement prescribed in Schedule D for that year.
2012-78; 2019, c.29, s.111
Report requirements under a consolidated lease
2012-78
18.4(1)No later than 90 days after each anniversary date of the granting of a consolidated lease, the lessee shall submit to the Minister a report containing a statement with respect to the total expenditures made by the lessee during that year and any other geophysical, geological, engineering and other data and information that the Minister requires.
18.4(2)A statement of expenditure submitted under this section shall be accompanied by an affidavit of the lessee attesting to its accuracy and correctness.
18.4(3)Geological, geophysical, engineering or other data or information submitted under this section shall be attested to by an engineer or a geoscientist as to its accuracy.
18.4(4)A report submitted under this section shall include three copies of the following documents:
(a) a geological report with respect to the lease area, including geological maps showing the location of wells drilled on the lease area, cross-sections and stratigraphic data;
(b) a geophysical report with respect to the lease area, including gravity, seismic and magnetic data, and
(c) reports of geophysical surveys that were conducted, including well logs and well tests data resulting from exploratory wells that were drilled in the lease area.
2012-78
Shortfalls and credits
2012-78
18.5(1)If the expenditures made by the lessee exceed the amount required to be expended under the consolidated lease for that year, the lessee shall bank any remainder for use as a credit towards subsequent years of the lease term.
18.5(2)If the expenditures made by a lessee, including any amount credited from previous years, are less than the amount required to be expended under the consolidated lease for that year, the lessee shall do the following:
(a) pay an amount equal to the deficiency to the Minister of Finance and Treasury Board; and
(b) abandon and release to the Crown a portion of the lease area determined in accordance with section 18.6.
2012-78; 2019, c.29, s.111
Portion of lease area to be abandoned and released
2012-78
18.6The portion of a lease area to be abandoned and released under section 18.5 shall be computed using the following formula:
p
=
a
×
c
b
where
p = the portion of the lease area to be abandoned and released;
a = the amount owing to the Minister of Finance and Treasury Board under paragraph 18.5(2)(a);
b = the amount required to be expended under the consolidated lease for the term of the lease; and
c = the total number of hectares of the lease area.
2012-78; 2019, c.29, s.111
Application for well licence
2012-78
18.7(1)An application for a well licence shall be accompanied by the following information:
(a) a map and a description of the location of the well or wells; and
(b) any other information the Minister requires.
18.7(2)If a person other than a licensee or lessee applies for a well licence, the person shall provide the Minister with the written permission of the licensee or lessee, as the case may be.
2012-78
Discovery of oil or natural gas
19A licensee or lessee shall report immediately to the Minister on each oil or natural gas occurrence and, at the Ministers request, supply samples from all fluids encountered in each well drilled.
Confidential information
20(1)Information furnished under sections 9, 17, 18 and 18.4 may be released to the public
(a) one year after the date of the expiry, cancellation or surrender of a licence to search,
(b) one year after the expiry of the initial term of a lease, its cancellation or surrender,
(b.1) one year after the expiry of a consolidated lease, its cancellation or surrender, or
(c) at any time upon permission granted by the licensee or lessee for the release.
20(2)Notwithstanding subsection (1), well logs, well test data, well cuttings, well core data and other well information submitted as confidential information may be released to the public one year after the release of the rig from a well.
20(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.
2012-78; 2013, c.34, s.25
Transfer, assignment, agreement or instrument
21(1)The fee for an application to record a transfer, assignment, agreement or instrument affecting the title to a licence to search or a lease is prescribed in Schedule A.
21(2)The fee for registering an instrument made pursuant to section 426 of the Bank Act, (Canada), is prescribed in Schedule A.
21(3)The fee for an application for a well licence, for amending a well licence or for obtaining approval of the transfer of a well licence is prescribed in Schedule A.
21(4)The security deposit to accompany an application for a well licence or for obtaining approval of the transfer of a well licence is prescribed in Schedule A.
2012-78
Royalties
22(1)The royalty to be calculated, levied and collected by the Crown on oil won, worked, recovered or obtained under a licence to search or lease shall be that percentage of the oil so produced from each well during each calendar month, as specified in Schedule C, free and clear of any deductions calculated on the actual selling price or fair market value at the time and place of production, whichever is the greater.
22(2)The royalty payable on natural gas shall consist of
(a) a basic royalty component, and
(b) an economic rent royalty component.
22(3)The royalty on natural gas may be paid in kind with the approval of the Lieutenant-Governor in Council.
22(4)The approval referred to in subsection (3) may be general or specific in nature.
22(5)The basic royalty component shall be calculated and paid monthly.
22(6)The basic royalty component shall be the greater of
(a) 4% of the product of the wellhead price for natural gas produced in the month, as calculated under subsection (7), and the units of natural gas produced in that month, cumulated for all of a licensee’s or lessee’s wells that produce natural gas, and
(b) 2% of a licensee’s or lessee’s monthly gross revenue from sales of natural gas from all of its wells, as calculated under subsection (8).
22(7)Subject to subsection 22.1(1), the wellhead price shall be determined by the following formula:
WP = SP – TC – GPA
7where
7SP is the weighted average selling price per unit for the month, in Canadian dollars, received by a licensee or lessee for its natural gas in the market place;
7TC is the transportation costs from the processing facility to market for the month, consisting of the per unit transport fee charged by a third party; and
7GPAis the gas processing allowance per unit sold for the month, as determined by the following formula:
GPA = (DOC + OHD + DP + RC)/U
where
DOCis the direct operating costs for the month of a licensee or lessee that are used directly in the gathering, processing and transportation of its New Brunswick natural gas subject to a royalty;
OHDis an overhead allowance calculated as follows:
OHD = 10% × DOC
DP is straight line depreciation over 20 years of the licensee’s or lessee’s capital assets for the month that are used directly in New Brunswick in the gathering, processing and transportation of its New Brunswick natural gas;
RC is a 15% annual return on the average monthly undepreciated balance of capital assets in New Brunswick related to the gathering, processing and transportation of the licensee’s or lessee’s natural gas produced in New Brunswick; and
U is the number of units of natural gas sold for the month from all of the licensee’s or lessee’s New Brunswick wells.
22(8)The monthly gross revenue of a licensee or lessee shall be determined by the following formula:
MGR = SP × U
8where
8SP is the price referred to in the description of “SP” in subsection (7);
8U is the number of units referred to in the description of “U” in subsection (7).
22(9)Subject to subsection 22.1(2), the economic rent royalty component shall be estimated on a calendar year basis.
22(10)The economic rent royalty component shall be determined by the following formula:
ER = 25% × [CGR - (E + CF)]
10where
10CGR is a licensee’s or lessee’s cumulative gross revenue from all of its natural gas operations in New Brunswick;
10E is an amount equal to the sum of all of a licensee’s or lessee’s capital expenditures and all operating costs that are associated with its natural gas operations in New Brunswick, including the amount of the basic royalty component determined under subsection (6), but not including interest expenses, depreciation expenses or corporate income taxes; and
10CF is an amount equal to the sum of any capital expenditures, operating costs and interest referred to in subsection (11) and any capital expenditures and operating costs referred to in subsection 22.1(3).
22(11)Any expenditures and costs that could not be deducted under subsection (10) may be carried forward and an annual interest rate equal to the daily average Government of Canada Benchmark Bond Yield: Long-Term Rate for the calendar year shall be applied to those expenditures and costs.
22(12)The royalty on all by-products obtained from oil or natural gas by processing or separation, including but not limited to sulphur, helium, natural gas liquids and condensate, shall be 10% of the actual selling price or fair market value at the time and place of production, whichever is the greater, less the licensee’s or lessee’s proportionate share of gathering, processing and transportation charges.
22(13)Subject to subsection 22.1(5), a licensee or lessee shall pay the economic rent royalty component in accordance with the following:
(a) not later than 25 days after the end of each month of the calendar year in respect of which the royalty is payable, an amount equal each time to 1/12 of the royalty estimated by the licensee or lessee to be payable for the calendar year in respect of which the royalty is payable; and
(b) within six months after the end of the calendar year, the balance of any royalty payable as calculated by the licensee or lessee in an annual return which shall be on a form acceptable to the Minister.
22(14)A licensee or lessee shall account for every sale of oil, natural gas or by-products on a form acceptable to the Minister.
22(15)The licensee or lessee shall remit the form referred to in subsection (14) and the royalty payment, if due, to the Minister by the twenty-fifth day of the month following the calendar month of the sale.
22(16)No royalty is payable for oil or natural gas that is
(a) consumed by a lessee or licensee in direct connection with development work under a lease or licence to search,
(b) returned to a formation, or
(c) flared.
2014-28
Transitional provisions
2014-28
22.1(1)For the purposes of the description of “DP” referred to in subsection 22(7), if as of April 1, 2014, a licensee or lessee has undepreciated capital assets that are used in the gathering, processing and transportation of natural gas, the licensee or lessee may depreciate the capital assets on a straight line basis for the remaining number of years that will result in full depreciation over 20 years.
22.1(2)The economic rent royalty component shall be estimated for the period from April 1, 2014, to December 31, 2014, both dates inclusive.
22.1(3)Capital expenditures and operating costs associated with New Brunswick natural gas operations incurred by a licensee or lessee after December 31, 2002, and before April 1, 2014, may be deducted from all of the licensee’s or lessee’s cumulative gross revenue earned from all of its natural gas operations in New Brunswick after December 31, 2002, and before April 1, 2014, and any excess expenditure may be carried forward under CF in subsection 22(10).
22.1(4)The carry forward of excess expenditures shall only be calculated and applied once.
22.1(5)For the period from April 1, 2014, to December 31, 2014, both dates inclusive, a licensee or lessee shall pay the economic rent royalty component in accordance with the following:
(a) not later than 25 days after the end of each month of the period in respect of which the royalty is payable, an amount equal each time to 1/9 of the royalty estimated by the licensee or lessee to be payable for the period in respect of which the royalty is payable; and
(b) within six months after December 31, 2014, the balance of any royalty payable as calculated by the licensee or lessee in an annual return which shall be on a form acceptable to the Minister.
2014-28
Repeal
23New Brunswick Regulation 86-192 under the Oil and Natural Gas Act is repealed.
Commencement
24This Regulation comes into force on September 24, 2001.
Schedule A
1Application fees are as follows:
(a)licence to search - transfer, assignment, agreement or instrument
$  50
 
(b)lease - transfer, assignment, agreement or instrument
$  50
 
(c)conversion from licence to search to lease under section 27 of the Act
$250
 
(d)redistribution of exploratory work under section 21.01 of the Act, per licence to search
$100
 
(e)well licence
$200
 
(f)amendment of a well licence
$  50
 
(g)obtain approval of the transfer of a well licence
$  50
2Tender fees are as follows:
(a)licence to search
$250
 
(b)lease
$250
3The rental fee for each year of a licence to search or a lease is as follows:
(a)rental of a licence area
 
(i)for those sections of a licence area on which one or more producing wells are located
$0.15 per hectare per year
 
(ii)for those sections of a licence area on which there are no producing wells
$0 per hectare per year
 
(b)rental of a lease area
 
(i)for those sections of a lease area on which one or more producing wells are located
$4 per hectare for each year
 
(ii)for those sections of a lease area on which there are no producing wells
$0 per hectare for each year
3.1The security deposit to accompany an application for a well licence is $50,000 per well.
4The registration fee for an instrument referred to in subsection21(2) is fifty dollars.
2004-41; 2012-78; 2013-58; 2016-16
Schedule B
For the purpose of the Act and this Regulation, the minimum expenditure required for exploratory work to be completed during the term of a licence to search is prescribed as follows:
(a)on-shore licence to search:
$10 per hectare
 
(b)off-shore licence to search:
$20 per hectare
Schedule C
For the purpose of calculating the royalty on oil, the stated percentage of the oil produced is as follows:
Monthly
Production in m
3
Royalty Rate
for the Month
    1 −   49 m3
5%
  50 −   79 m3
5% of 50 m3 + 7½% of remainder
  80 − 109 m3
6% of 80 m3 + 9½% of remainder
110 − 139 m3
7% of 110 m3 + 11½% of remainder
140 − 179 m3
8% of 140 m3 + 13% of remainder
180 − 219 m3
9% of 180 m3 + 15% of remainder
220 − 289 m3
10% of 220 m3 + 14% of remainder
290 − 719 m3
11% of 290 m3 + 13½% of remainder
720 m3 and over
12%
Schedule D
For the purpose of the Act and this Regulation, the minimum expenditure required for exploratory work to be completed during the term of a consolidated lease is prescribed as follows:
(a)first year
$10 per hectare
 
(b)second year
$20 per hectare
 
(c)third year
$30 per hectare
 
(d)fourth year
$40 per hectare
 
(e)fifth year
$50 per hectare
2012-78
N.B. This Regulation is consolidated to December 20, 2019.