Tenure

Posting/Land Sale Schedule

There are four times in a year that interested parties have an opportunity to post lands for sale of licence to search or lease rights.

The following table describes the land posting schedule for 2011-2012:

Application/Nominations

Posting lands for an area designated in the application occurs when the Minister of Natural Resources receives and endorses an application to nominate land (s), triggering a call for tender, for the exclusive right to the petroleum resources for the described area.

Call for Tenders Notice

Call for tenders are published in the Royal Gazette and other appropriate publications 60 days prior to the closing/sale dates.

An “Information to Tenderers” package, advising prospective bidders of requirements for submission will be available from the date the sale notice is published free of charge from the Manager of Petroleum Tenure.

Any company that intends to purchase an agreement must be registered to do business in New Brunswick. Registration may be made by application to: Corporate Affairs, Department of Justice, P.O.Box 6000, Fredericton, New Brunswick, Canada E3B 5H1.

Submission of Tender Offerings

All bids are submitted under sealed tenders as directed in the Information to Tenderer package.

Publication of Sale Results

The sale results of a “Call for Tenders” notice for an oil and natural gas licence to search and/or lease are published the next day following the date of the sale on the Minerals and Petroleum Resources website.

As per the Oil and Natural Gas Act, the Minister may grant a licence to search to the successful applicant within 30 days after the closing date.

Granting of Rights

Licence to Search

A licence to search entitles the holder to explore, drill and recover oil and natural gas from the area granted under the agreement. The right is granted to the bidder who tenders the largest work expenditures equal or greater than the minimum specified in the tender notice over the three-year non renewable term. The licence to search may be converted to a five year lease at any time during the term of the licence to search agreement.

Lease

A lease entitles the holder to the exclusive right to produce oil and natural gas from the area granted under the agreement. The right is granted to the bidder who tenders the largest non-refundable cash bonus equal to or greater than the minimum specified in the tender notice. It is issued for a period of five years. The term of a lease may be continued and extended on that portion of the lease area which, in the opinion of the Minister, is producing, or capable of producing in paying quantity or actively being drilled.

The following table provides highlights on the types of rights granted, fees and terms.

Reporting Requirements

The holder of a licence to search or a lease shall submit, within the time frame established by regulations, a report containing a statement with respect to the total expenditures made by the licensee or lessee and other information obtained during the term of their agreements.

Continuance and Extension of Lease

The holder of a lease may apply to continue, or extend for such period, that portion of the lease that is producing, capable of producing in paying quantity or being drilled to the satisfaction of the Minister. No application form exists. Application is made in a form of a letter.

Transfer

An agreement holder may transfer all or a portion of his/her agreement area by submitting a completed Application to Transfer as provided for in the regulation.

Surrender

A licence to search may be surrendered if all work requirements for the term have been met. A lease may, at any time, be abandoned and released to the Crown during the term of the lease. All areas of agreements surrendered shall be surrendered to the Crown.

For additional information, please contact the Petroleum Tenure Manager