Canada Oil and Gas Land Regulations (C.R.C., c. 1518)

34. (1) A permittee must be the holder of a licence before he may carry out exploratory work on Canada lands.

(2) Where a permittee is authorized to carry out exploratory work under these Regulations, that work may be performed by any person employed or hired by the permittee.

(3) A permittee may, for the purpose of carrying out exploratory work for oil and gas,

• (a) enter upon the Canada lands described in his permit; and

• (b) use such part of the surface of the Canada lands described in his permit as may be necessary.

(4) A permittee may produce, mine, quarry or extract from the Canada lands described in his permit such quantity of oil, gas and other minerals and substances that are produced, mined, quarried or extracted in association with any oil or gas as, in the opinion of the Oil Conservation Engineer, is necessary for test purposes or for conducting operations of the permittee on that permit area.

35. (1) Subject to these Regulations, a permittee has the exclusive option to obtain an oil and gas lease for the Canada lands described in his exploratory permit.

(2) Every permit shall state the term of the oil and gas lease for which an option is given and the royalty payable under the lease.

36. (1) Except as provided in subsection (4), where the whole or greater part of a permit area is located south of latitude 65°, the permit is valid for three years from the date of issue.

(2) Except as provided in subsection (4), where the whole or greater part of a permit area is located between latitude 65° and latitude 68°, the permit is valid for four years from the date of issue.

(3) Where the whole or greater part of a permit area is located between latitude 68° and latitude 70°, the permit is valid for six years from date of issue.

(4) Where a permit area is located

• (a) south of latitude 70° and within Canada lands other than those lands located in that part of Canada described in Schedule VI, or

• (b) south of latitude 70° and east of longitude 90° and within Canada lands located in that part Of Canada described in Schedule VI,

and the whole or greater part thereof is, in the opinion of the Chief, covered by seacoast waters, the permit for that permit area is valid for six years from the date of issue.

(5) Where a permit area is located

• (a) south of latitude 70° and west of longitude 90°, and

• (b) within Canada lands located in that part of Canada described in Schedule VI,

and the whole or greater part thereof is, in the opinion of the Chief, covered by seacoast waters, the permit for that permit area is valid for six years from the date of issue.

(6) Where a permit area is located north of latitude 70°, the permit is valid

• (a) in the case of a permit issued before 1968, for eight years from the date of issue, and

• (b) in the case of a permit issued on or after January 1, 1968, for six years from the date of issue.

(7) In the case of a permit that was issued prior to July 1, 1967, in respect of a permit area, the whole or greater part of which is located north of latitude 70°,

• (a) the period of the original term of the permit is extended by 12 months, as set out in Schedule V;

• (b) each period of the permit that follows the extended period shall be computed as if it commences 12 months after the date on which it would otherwise commence;

• (c) all references in these Regulations to the period that is extended shall be deemed to be references to that period as so extended; and

• (d) each anniversary, referred to in section 53, of a permit a period of which is extended shall be computed as if that anniversary occurs 12 months after the date on which it actually occurs.