Archived - Proposed Bent Horn Significant Discovery Licence

Significant Discovery Licence No. SDLXXX

ISSUED BY THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT
(hereinafter called the "Minister")

TO THE INTEREST OWNER [name]

WHEREAS the Minister is empowered pursuant to the Canada Petroleum Resources Act to issue an Significant Discovery Licence (hereinafter called the "Licence") relating to the Lands;

AND WHEREAS a Declaration of Significant Discovery was made on September 23, 1985, in respect of the Bent Horn N-72 discovery well;

AND WHEREAS, the Minister selected the bid in the amount of $XXXXX submitted by XXXXX (and XXXXX) as the winning bid in respect of parcel No. XXXXX posted in the 2012-2013 Arctic Islands of Nunavut Call for Bids published in the Canada Gazette on?date?;

NOW THEREFORE this Licence is issued upon the following terms and conditions:

1. INTERPRETATION

   1. In this Licence, including all Schedules annexed hereto, unless the context requires otherwise:
      1. "Act" means the Canada Petroleum Resources Act, as amended from time to time;
      2. "Operations Act" means the Canada Oil and Gas Operations Act, as amended from time to time;
      3. "Lands" means the frontier lands described in Schedule I or such portion thereof that remains subject to this Licence from time to time;
      4. "Regulations" means any and all regulations now made or that may be made at any time under the authority of the Act or the Operations Act, and any Acts passed in substitution therefor.
   2. All words and phrases used in this Licence have the meaning given by the Act, the Operations Act, or the Regulations.
   3. This Licence is issued under and subject to the Act, the Operations Act, and any Act passed in substitution therefor, the Regulations and the provisions of any other Act of Canada and regulations made thereunder that relate to or affect this Licence, the Act, the Operations Act or the Regulations. The Act, the Operations Act, the Regulations and such other Acts and other regulations shall be deemed to be incorporated into this Licence as though specifically enumerated herein.
   4. The following Schedules are attached and made part of this Licence:
      • Schedule I - Lands;
      • Schedule II - Ownership;
      • Schedule III - Term and Conditions;
      • Schedule IV - Representative(s) and Addresses for Service.

2. RIGHTS

   1. Subject to the Act and the Operations Act, this Licence confers, with respect to the frontier lands to which this Licence applies,
      1. the right to explore for, and the exclusive right to drill and test for, petroleum;
      2. the exclusive right to develop those frontier lands in order to produce petroleum; and
      3. the exclusive right, subject to compliance with the other provisions of the Act, to obtain a production licence.
   2. This Licence shall be held by the interest holders as to the Lands, in the shares as set forth and described in Schedule II, or as amended from time to time.
   3. The rights under this Licence are subject to the right of any other Licence holder to enter on and use the area subject to this Licence to the extent necessary to enable that other Licence holder to exercise the rights under that other Licence.

3. EFFECTIVE DATE

   This licence is effective as of [closing date of the call for bids].

4. RENTALS

   1. Rentals, if any, shall be levied annually at the rate set forth in Schedule III.
   2. Rentals, if levied, shall be paid in advance, in respect of the Lands. The payment may be submitted in the form of an irrevocable standby letter of credit, certified cheque or other negotiable financial instrument in a form satisfactory to the Minister.
   3. Rentals paid shall be refunded annually at the rate set forth in Schedule III.

5. PLANNING REPORT

   The interest owner shall provide to the Minister in writing annual reports describing activities planned to be undertaken to advance work on the Licence for the upcoming year as well as details of any activities undertaken in the preceding year. The annual report shall be filed each year on the anniversary of the effective date of the Licence.

6. NON-COMPLIANCE

   Failure to pay rentals, file annual planning reports or otherwise fail to comply with any terms and conditions of this Licence may result in the termination of the Licence.

7. INDEMNITY

   1. It is a condition of this Licence that the interest owner or interest holders shall, in respect of that portion of the Lands to which such interest holder's share relates, at all times, jointly and severally, indemnify and save harmless Canada from and against all claims, demands, loss, costs, damages, actions, suits or other proceedings by whomsoever made, sustained, brought or prosecuted, in any manner based upon, occasioned by, or attributable to, anything done or omitted to be done by, through, or under, or with the consent of the interest owner, or an interest holder, notwithstanding any agreement or arrangement entered into by an interest owner or interest holder which does or may result in the transfer, assignment or other disposition of the interest or share therein, in the fulfilment of the terms and conditions made herein or in the exercise of the rights or obligations contained herein.
   2. For the purposes of subparagraphs 7(a) and 7(b), "Canada" shall not include a Crown corporation.
   3. This commitment to indemnify Canada shall survive the expiration of this Licence and will be incorporated into any Significant Discovery Licence and Production Licence that arises therefrom.

8. LIABILITY

   1. An interest holder shall be liable under the provisions of this Licence, the Act, the Operations Act and the Regulations for all claims, demands, loss, costs, damages, actions, suits or other proceedings in respect of any work or activity conducted, or caused to be conducted, by, through, or under, or with the consent of such interest holder. Any transfer, assignment, or other disposition of the interest, or of a share therein, shall not have the effect of discontinuing such liability in respect of such work or activity, related to the interest, or share therein, so disposed, that was conducted before that transfer, assignment, or other disposition was registered pursuant to the Act and Regulations. For greater certainty, liability, as aforesaid, does not relate to any work or activity conducted after such party ceases to be an interest holder in this Licence.
   2. Liability as set out in this paragraph shall survive the expiration of this Licence and will be incorporated into any Significant Discovery Licence and Production Licence that arises therefrom.

9. SUCCESSORS AND ASSIGNS

   Subject to paragraphs 7 and 8, this Licence enures to the benefit of, and is binding on, the Minister and the interest owner and their respective heirs, administrators, successors and assigns.

10. NOTICE

    Any notice, communication or statement required under the Act or the Operations Act shall be served on the designated person, on behalf of the Minister or on the interest owner, as the case may be, by personal delivery, or by fax at that address specified in Schedule IV hereof, or such other addresses as may be designated from time to time by the Minister or the interest owner, as the case may be.

11. REPRESENTATIVE

    Unless otherwise designated in the prescribed manner under the Act, for the purpose of this Licence the representative or representatives, as the case may be, of the interest owner shall be as specified in Schedule IV.

12. AGREEMENT

    The issuance of this Licence by the Minister affirms the acceptance thereof by the interest owner and comprises the agreement between the interest owner and the Minister as to the terms and conditions contained herein.

ISSUED at Gatineau, this __________ day of ________________, _______.

_____________________________________________
MINISTER of Indian Affairs and Northern Development

SCHEDULE I - LANDS

SCHEDULE II - OWNERSHIP

SCHEDULE III - TERMS AND CONDITIONS

SCHEDULE IV - REPRESENTATIVE(S) AND ADDRESSES FOR SERVICE