This is the sixth version of the CAPL Operating Procedure, with previous versions based on industry’s experiences with the document. THE CAPL OPERATING PROCEDURE. ROBERT M. BOYER•. The author outlines the substantive changes that have been made by the Canadian. In this article, the author compares the and CAPL Operating Procedures, emphasizing the revisions which have been made and.

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The CAPL Operating Procedure: An Overview of the Revisions | MacLean | Alberta Law Review

In addition to the three ways outlined above there is also the challenge provision in cl. Implicit in this is the idea that the incumbent operator is better placed to identify where it might be possible to identify efficiencies. Since one is unable to quantify operatint changes, the provision seems limited to financial terms.

This would leave too much to the auto-interpretation of the incumbent operator who would simply say that an inexperienced joint operator could never have the competence to assume the operatorship.

Given these practical difficulties one should perhaps be careful not to be too demanding of the information that the challenger must adduce in support of its challenge. In addition, PW was of the view that Diaz pperating be in default under the agreement given the magnitude of unresolved receivables as between PW and Diaz.

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Challenge Notices Under the Terms of the 1990 CAPL Operating Procedure

Justice Colleen Kenny denied the application. The question for present purposes is whether a challenger must provide evidence to support its capacity to meet that standard as part of its Challenge Notice.


Member of the Alberta Bar. A challenge on the basis of terms and conditions, therefore, might in practice only be the right to challenge on the basis of overhead rates. The commentary recognizes the difficulty that the challenger faces.

But in this case the challenger seems to have provided only the barest information. First, the case provides some guidance as to the quality of the information that a joint operator must provide to support a challenge notice.

The commentary to the CAPL is instructive: Diaz failed to support its Notice with the information required by cl. About Nigel Bankes B. This case will be of interest to the oil and gas bar for two reasons.

This is of course the standard expected of an operator and in cl. The CAPL operating procedure contemplates a number of ways in which the joint operator s procedute obtain a change in the operatorship: The commentary to the CAPL is instructive:.

The case law suggests that a joint operator will face an uphill battle against an incumbent who wishes to retain its position: Discussion The CAPL operating procedure contemplates a number of ways in which the joint operator s can obtain a change in the operatorship: However, how can a challenger give cpl more than its best procedur estimate when the costs of exploration are a function of such factors as weather conditions, exploration success testing costsmechanical difficulties, the demand for equipment and inflation?

PW took the position, in a timely way, that the Notice was deficient in that it did not provide sufficient information to assess whether the proposal was more favourable to the joint account or not, or if Diaz would be able to conduct operations in a safe and good and workmanlike manner. Although this was sufficient to dispose of the application Justice Kenny also noted that to the extent that PW put at issue the ability of Diaz to assume the operatorship, that matter would have to proceed by way of statement of claim, discovery and trial.


The Notice stipulated that Diaz would not charge the joint account for any costs attributable to a production office, a field office or to first level supervisors in the field.

The relevant commentary is essentially unchanged.

See the note here and consider posting something yourself or sending some feedback more anonymously to Professor Jennifer Koshan at koshan ucalgary. Challenge notices under the terms of the CAPL Operating procedure This case will be of interest to the oil and gas bar for two reasons.

Please click here for more information. This later information detailed the specific costs savings but it also provided that Diaz would continue to retain an existing contractor thereby speaking belatedly to the ability to operate in safe and workmanlike manner.

The Decision Justice Colleen Kenny denied the application. For as the commentary indicates, it is already very difficult for a joint operator to put together a challenge notice that is not a leap into procedurs dark; the idea that there is a further condition precedent would make the challenge provisions little more than a dead letter.