Petroleum Land Administration Overview

1. PETROLEUM LAND ADMINISTRATION OVERVIEW PRESENTATION BY CAPLA Regulatory Committee

2. What is Land Administration? • It is a discipline with the main focus on the acquisition, maintenance and management of the rights and agreements required to access, develop and operate land assets in a responsible and effective manner. • Land Professionals maintain and administer corporate interests in a company’s the assets, ensuring that the relevant contractual and regulatory obligations related to them are adhered to, while also acting as an information resource for internal and external stakeholders.

4. LAND WORKFLOW Identify Prospect (Exploration team) Verify Mineral Rights Ownership (Mineral Land) Acquire Mineral Rights (Mineral Landman) Acquire Surface Lease (Surface Landman) Survey (Surface Land) Third Parties/Consultations (Surface Land) Well Drilled

5. How it Works… • An exploration team, made up of Area specific technical staff along with the Area Mineral Landman and Land Administrator, identifies what mineral rights are available as open Crown or Freehold. • Evaluations are made and a “bid amount” is submitted for landsale. • Area Landman/Agent begins negotiations with the Freehold Mineral Interest Owner in order to secure a lease.

6. If bid or negotiation are successful, a Crown lease or licence, or a Freehold Mineral Lease is received. • The Mineral Administrator ensures that everything is correct and that the lease information is reflected in the land-system. • Technical staff working alongside Area Surface Landman/Administrator team identifies where the best placement for the proposed operation will be.

7. Surface Land • Surveys are completed in-house or through a survey firm, which will identify the area of the proposed operation along with any required third party consents/agreements regarding access, ground disturbance and crossings. • Surface Land Team begins the process of acquiring those above-ground approvals, leases and third party consents that will be required to move forward. • Area Surface Landman/Coordinator or Agent negotiates with surface land owners to secure access and a lease for the operation location.

8. Surface Administrator tracks all project details, ensuring all regulated obligations/approvals/consents are received. • Notices are sent out to all landowners and surface interest stakeholders within the regulated notification area. Information sessions and town-halls may be required to fully update all interested parties. • Land Administration personnel are involved in coordinating, acquiring, administrating and submitting for approvals all the required documentation to meet regulated requirements. • They work closely with Area Operations technical and field staff, coordinating their efforts to meet deadlines and keep the operation moving forward to completion.

9. Regulatory Affairs • Regulatory Affairs supports technical teams and engages with Industry Regulators, Aboriginal stakeholders and government in order to clarify, advise and train internal business groups. • Licensing and amendment submissions for facilities, pipelines and wells for construction and operation activities. • Reporting/Tracking non-compliance issues, ensuring compliance obligations, down-hole surveys and information, along with well status updates/reporting, self-disclosures and field inspections.

10. Contracts Land • Area Landman and Technical staff identify further potential, but lack capital to move forward in order to fully develop the play area. • Another operator in the area having acquired mineral rights within the target zones that is lacking technical/operational resources, but with capital to spend, is approached in order to work out a mutually beneficial business relationship to develop the play. Draft Contract (Contract Land) Deal with other Company (Mineral Landman) Require more Capital

11. Contracts Land Professionals, working with the Area Landman and Mineral Administrator, identify those Assets involved and draft an operating agreement that will govern the working relationship between the companies. • Depending on the type of agreement and the division of interests along with the structure of how the relationship is organized, operating agreements between partners can range from simple, standard agreements, to more specific and complex.

12. Industry has a number of standardized operating agreements to broadly cover a wide range of activities, but depending on the complexity and sophistication of the companies involved there may be “in-house” developed agreements. • The Contract Administrator pays close attention to the terms and conditions, ensuring obligations are met, interests are reflected according to the agreement and the relevant operational guidelines are followed.

13. Joint Venture • Joint Venture negotiates, maintains and administers the business matters once production begins: handling, ownership, operation and maintenance of production, pipelines, wells, gas plants, oil batteries, compressor stations, gathering systems and units. • Works closely with Land Asset teams, Operations, Accounting and Legal departments to support targets, usage fee data maintenance and contract compliance.

14. Acquisition and Divestiture (A&D) & Business Development • A&D business groups are responsible for the transferring of asset interests between parties, bringing interests in or transferring them out. • The Business Development group targets assets where they already hold an interest and wish to increase their share, or hold interests they are looking to sell in order to free up or generate capital. • Main duties include the review of assets, ensuring clear chains of title and interests represented are confirmed, documentation and submission of all legal forms/notices to complete transfer process, trouble-shooting issues which may jeopardize transfer and or interests.

15. The Role of Land Administrators • Land Administrators and Professionals act as a source of information and guidance on the rules and regulations, obligations and guidelines once operations commence. • Day-to-day maintenance to ensure Mineral and Surface obligations are met, including lease rentals and related maintenance payments are made. • Adherence to agreed upon contractual obligations, notices that relate to operations, transfers and maintenance of the interests involved. • Maintaining clean records that have clearly documented interests represented at all times is of paramount importance.

16. Coordinating with regulatory bodies when issues arise. • Keeping up with industry changes through classes, seminars and networking events are important to keep people working in Land Asset Management up to date with the relevant information they need to be effective. • Building relationships with the Crown and Industry improves effectiveness of Land Asset Management.

17. Questions? Answers? Funny anecdotes? Should you have further questions or require more information on any aspect of this presentation, on Land Asset Management and industry practices, or CAPLA and its membership, please feel free to contact us using the information provided below. For CAPLA Regulatory Committee General Information/Inquiries Email: office@caplacanada.org Attention: CRC Committee Geoff Thiessen, Co-Chair, CAPLA CRC A&D Coordinator, Crescent Point Energy Email: gthiessen@crescentpointenergy.com Cathy Miller, CEO, CAPLA Email: cathy@caplacanada.org Valerie Farmer, CAPLA CRC Surface Land Analyst, TransCanada Email: valerie_farmer@transcanada.com