Tenure


In Alberta, the Crown owns 81% of the province's mineral rights. The remaining 19% are 'freehold' mineral rights owned by the federal government on behalf of First Nations or in National Parks, and by individuals and companies.

Petroleum and natural gas (PNG) rights owned by the Province of Alberta can be acquired through a competitive bid auction held about every two weeks. PNG Leases and Licences are issued to the successful bidders.
Yearly, the province holds an average of 24 land auctions (Sales) and issues an average of 2,160 PNG Agreements as per the last three calendar years (2015 to 2017).
As of February 2018, Alberta Energy administers about 77,000 PNG Agreements.

PNG Leases and Licences allow the right to explore for and produce Crown resources. These agreements are subject to several requirements during their terms as outlined briefly below:

  • Annual rent of $3.50 per hectare must be paid for each hectare contained within a PNG Lease or Licence

  • Tenure holders must meet all regulatory requirements

  • Rights in a PNG Licence are validated or earned to continue beyond agreement expiry by the drilling of a well.

  • A PNG Lease must be proven productive at the end of its five-year term by drilling, producing, mapping, being part of a unit agreement or by paying offset compensation. This allows the lease to continue indefinitely beyond the end of its term.

  • Any lease or licence, or portion of a lease or licence not able to continue as per the regulatory requirements is cancelled or rights are deleted and returned to the Crown for re-posting and sale. PNG Lease and Licence tenure may also end through rental or royalty payment default or by voluntary surrender.

 

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