Key Amendments to Saskatchewan’s Oil and Gas Lease Regulations

0 Comments

On February 24, 2023, An Order-in-Council made updates to The Crown Minerals Act by amending The Oil and Gas Tenure Registry Regulations. These amendments address how leases are managed when the holder is insolvent, bankrupt, defunct, or untraceable.

The Crown Minerals Act governs the exploration and extraction of mineral resources in Saskatchewan, including oil and gas. The original Oil and Gas Tenure Registry Regulations managed the issuance and transfer of these leases. However, evolving economic conditions and industry challenges necessitated revisions to handle situations involving financially troubled or unreachable leaseholders.

The changes introduced include:

      • Lease Assignment: The updated regulations allow the administrator to transfer a lease from a holder who is insolvent, bankrupt, defunct, or cannot be located to another qualified individual. This ensures that valuable mineral resources are not left unutilized due to the leaseholder’s financial difficulties or inability to be contacted. It facilitates the effective management and development of these resources.
      • Notification Procedure: Before transferring a lease, the administrator must provide the current leaseholder with a two-month written notice detailing any issues with the lease and giving the leaseholder a chance to rectify the situation. This requirement ensures that leaseholders have an opportunity to address problems before the lease is reassigned.
      • Non-Compliance: If the leaseholder fails to resolve the issues within the two-month notice period, the administrator can proceed with the lease transfer. This provision prevents delays and ensures that the lease is not stalled indefinitely due to non-compliance.
      • Lease Extension: The regulations also empower the minister to grant a lease extension of up to 12 months. However, this extension does not constitute a new lease term, and the new holder must adhere to the original lease conditions. This provision provides continuity while allowing time to address outstanding issues.

These amendments are meant to be a proactive approach to resource management. They are supposed to address industry challenges and optimize lease administration in changing economic conditions.

Source: Saskatchewan OIC 47/2023, February 16, 2023