Preliminary and Final Decisions

Dejour Energy (Alberta) Ltd. v. Oil and Gas Commission

Decision Date:
May 27, 2021
File Numbers:
Decision Numbers:

Decision Summary

Decision Date: May 27, 2021

Panel: Darrell Le Houillier

Keywords: Oil and Gas Activities Act – ss. 39(3)(a)(i), 49(1)(d); Administrative Tribunals Act – s. 31(1)(a); order; summary dismissal; jurisdiction; remedy

Dejour Energy (Alberta) Ltd. (the “Appellant”) appealed an order issued by the Oil and Gas Commission (“Commission”). The order was issued to the Appellant for not complying with section 39(3)(a)(i) of the Oil and Gas Activities Act (the “Act”). Section 39(3)(a)(i) required the Appellant, as the holder of well authorization permits, to immediately suspend operations at wells when the Appellant had ceased to hold the leases associated with those wells. The order required the Appellant to close the master valves on the wells, and to either remove the handles on those valves or chain and lock those valves.

The order arose from the following circumstances. The Appellant held several petroleum and natural gas leases granted under the Petroleum and Natural Gas Act (the “PNGA”), and several associated well authorization permits issued under the Act. The Appellant was required to pay rental fees for the leases, but it failed to pay the rental fees due from January to May 2020. As a result, the leases expired between March and July 2020 pursuant to section 63 of the PNGA, which provides that a petroleum and natural gas lease expires 60 days after rental is due if it is not paid.

The Appellant’s current management and shareholder acquired the company in August 2020 and was, at that time, unaware that the leases had expired. Despite section 39(3)(a)(i) of the Act and the expiry of the leases, the Appellant continued to operate at least two wells after October 2020. The Appellant said this was done to test well integrity and to confirm that repairs and maintenance completed since August 2020 were adequate.

In March 2021, the Commission issued the order.

The Appellant appealed the order to the Tribunal. The Appellant asked the Tribunal to “allow [the Appellant] to repost the land title and acquire it back as soon as possible”. The Appellant advised that if the facility and compressor station at the wells remained idle, pipes and instruments may freeze and cause greater environmental issues.

The Commission asked the Tribunal to summarily dismiss the appeal, on the basis that the Tribunal lacked jurisdiction over the appeal, and the appeal had no reasonable chance of success.

The Tribunal found that the Appellant had standing under the Act to appeal the order, and that the order was an appealable determination under the Act. However, the Appellant was not seeking a remedy that the Tribunal could provide. The Appellant was essentially asking the Tribunal to restore the leases so that the Appellant could put the wells back in use. However, the Tribunal found that the expiry of the leases resulted from section 63 of the PNGA, and not from the order under appeal. The Tribunal noted that it has no authority with respect to matters under the PNGA.

In addition, the Tribunal held that the requirement to suspend operations at the wells resulted from section 39(3)(a)(i) of the Act due to the expiry of the leases, and not from the appealed order. The order was issued only after the Appellant failed to comply with section 39(3)(a)(i). The Tribunal had no jurisdiction over the effect of section 39(3)(a)(i) because it was not a “determination” as defined in section 69(1) of the Act. Accordingly, the Tribunal had no ability to authorize the Appellant to continue operating, notwithstanding the expiry of the leases.

In summary, the Tribunal concluded that the Appellant had not requested a remedy, or raised an appealable issue, that related to the order under appeal.

Accordingly, the Tribunal summarily dismissed the appeal due to a lack of jurisdiction, pursuant to section 31(1)(a) of the Administrative Tribunals Act.