Analysis on Quebec mining, oil and gas transparency measures bill published on our mining blog

Many of our readers will be interested in a post by our colleagues on our mining law blog which provides an overview of Quebec’s proposal on the regulation of mining, oil and gas companies with respect to payments in the course of exploration and development activities under Bill 55 An Act respecting transparency measures in the mining, oil and gas industries.  The post also includes an analysis in light of the Federal government’s  Extractive Sector Transparency Act which we’ve previously written about.

Gas in a Low-Carbon Environment

Jason Kroft, Allison Sears and Jonathan Drance

The Energy Information Administration (EIA), an agency of the US Department of Energy, has prepared an Analysis of the Impacts of the Clean Power Plan (the EIA Study) to study the impact of the Environmental Protection Agency’s (EPA) proposed 2014 Clean Power Plan on the fuel mix used to power the US electricity generating fleet.  The Clean Power Plan would establish rules and requirements, to be implemented on a state-by-state basis, to reduce carbon emissions from the US electricity generating fleet by roughly 30% from 2005 levels by 2030.

The EIA Study included historical information as well as a variety of projections (Projections) over the period from 2015 to 2040 (the Projection Period) including:

  • as a base case, a Clean Power Plan Projection, assuming the Clean Power Plan was implemented at the start of, and remained in effect throughout, the Projection Period; and
     
  • a Clean Power Plan and High Oil and Gas Resource Projection combining the projected effects of the Clean Power Plan together with a Projection assuming that natural gas remains relatively cheap (less than $4.50/mmbtu measured in constant 2013 dollars) over the Projection Period.
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Drafting Rules and Governing Provisions for Oil & Gas Agreements

Chip Johnston, Carolyn Simpson and Brad Ashkin

The drafting process has certain elements which can sometimes be seen as routine – governing provisions and the mechanics of the contract don’t get as much attention as other issues in a negotiation.  Although these elements of legal service can be seen as immaterial and uninteresting, they can create serious problems when they don’t work. 

We have prepared Drafting Rules and Governing Provisions for Oil & Gas Agreements as a quick reference guide to these issues which is designed to assist counsel in enhancing drafting quality and streamlining the drafting process.

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Changes to the regulation of greenhouse gas emissions in Alberta: the Government of Alberta announces first step in new climate change strategy

Allison M. Sears

An end to Alberta’s stigmatizing inertia on climate change policy was announced yesterday.  The new Minister of Environment and Parks, Shannon Phillips, announced that the Specified Gas Emitters Regulation (SGER) will be renewed for a period of two years with significant amendments she described as “interim measures” until such time as an advisory panel chaired by Dr. Andrew Leach, a professor at the University of Alberta, can undertake a comprehensive review of the province’s climate change policy and provide advice on a permanent set of measures. The review is intended to include broad consultation with the public, industry, First Nations, academia, and government, but must be concluded within three months as Premier Notley has indicated that she wants the report in hand in time for the Government to act upon it and make a further policy announcement prior to the meeting of the Conference of the Parties to the UN Framework Convention on Climate Change in Paris in December 2015.

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Completing a Substantial Private Placement with a TSXV-listed Oil & Gas Company

Chip JohnstonBen HudyAndrew Beamer and Maciej Zielnik - 

In the wake of major declines in oil and gas prices and reduced access to capital in the public markets, a number of TSXV-listed companies are considering substantial private placements to raise capital. 

Typically a substantial private placement involves the direct or indirect acquisition of 20% or more of the equity by either the purchase of common shares or convertible securities

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Continental Divide: Comparing Canadian and American LNG

Jonathan Drance and Brandon Mewhort - 

Over the last five years, as the shale gas revolution has massively increased the estimated gas reserves in North America, various proposals have been made to construct LNG export facilities, both in Canada and the US.  There have been over 20 proposals advanced in Canada and over 30 in the United States.

We are now at the point where final investment decisions (or FID) are being made and construction is starting, at least in the United States, with certain Canadian projects possibly not far behind.

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Checklist for oil & gas consulting agreements

Chip Johnston, Carolyn Simpson and Kris Noonan - 

This is the first in a series of blog posts - the "Oil and Gas Checklist Project" - regarding checklists for agreements commonly used by the oil and gas industry in acquisition, finance and commercial transactions. These materials are designed to assist internal counsel and business people to negotiate these forms by providing an overview of the key terms that may be relevant for the parties.

One of the most important parts of any contract review is assessing the ideas that are contained in an agreement to determine whether it addresses all of the potential issues that may arise. Unless a lawyer or business person is experienced with the negotiation of a particular kind of agreement, it can be a time-consuming and potentially risky process to accurately identify the deal points that matter.

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Canada Proclaims the Extractive Sector Transparency Measures Act into Force

Keith Chatwin, Ivan Grbesic and Christopher Yung  -

On June 1st  the Government of Canada proclaimed into force the Extractive Sector Transparency Measures Act (the Act). The proclamation comes in advance of the G7 Summit on June 7, 2015, and is a follow-through on the 2013 G8 Summit commitment made by Prime Minister Stephen Harper to establish new reporting standards for Canadian oil, gas and mining companies. The stated purpose is to foster better transparency to ensure that the resource extractive industries support proper development in the countries where they operate, while at the same time making it harder to conceal illicit payments.

As discussed in our post last October, the Act will require affected entities to report any payments made in relation to the commercial development of oil, gas or minerals during a financial year that exceed either the amount prescribed by regulation or, if no amount is prescribed, $100,000 of the following nature and whether monetary or “in kind”:

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BC LNG: Regulatory Approvals and Project Risk

 Jonathan Drance and Brandon Mewhort

Several BC LNG syndicates are nearing, or appear to be nearing, final investment decisions, but they will need all significant regulatory approvals before those decisions are made. The most significant regulatory approvals for a BC LNG project are: (1) a National Energy Board (NEB) export licence; and (2) an environmental assessment certificate issued under the Canadian Environmental Assessment Act (CEAA) and/or British Columbia’s Environmental Assessment Act (BCEA).

For the three BC LNG projects which are generally assumed to be closest to reaching final investment decisions, the status of their regulatory approvals are as follows:

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Private equity funding options for energy management teams

Chip Johnston, Brad Ashkin and Erin Dand

In the face of recent changes in commodity pricing, unpredictable equity capital markets, and the growing importance of scale in Canadian energy development, many leading energy management teams are seriously considering private equity funding alternatives, including the equity line of credit (ELOC).

Stikeman Elliott has market-leading expertise in this area and we have prepared an overview paper entitled The Oil & Gas Equity Line of Credit which reviews:

  • the key commercial terms of an ELOC
  • a market survey of ELOC economic returns in Canada
  • frequently asked questions about ELOC funding
  • the 41 private equity energy sponsors that have been active in Canada in recent years 

Our objective in preparing this publication is to support Canadian managers in evaluating, accessing and implementing this source of funding.  

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