There are three situations in which the AER may issue a gas allowable (GA) order for the purpose of setting the maximum allowed gas production rate for a gas well or wells in a pool:
- if the ultimate recovery of gas might be adversely affected by unrestricted production rates,
- if a gas well is completed outside of its prescribed target area and it is necessary to apply an off-target penalty to the well’s base allowable for equity reasons, and
- if the AER has deemed a fractional tract of land to be a drilling spacing unit and there is a need to apply an area-ratio production penalty or off-target penalty for equity reasons.
When a well is subject to an AER GA order and the well’s licensee believes that circumstances warrant the allowable being rescinded or amended, an application can be made to change the allowable under section 10.300(4) of the Oil and Gas Conservation Rules (OGCR). There are several reasons for a change to a gas well’s allowable, including
- equity (e.g., there is no longer an offsetting productive well),
- conservation (e.g., there is no longer a reason to restrict the rate for conservation reasons),
- pool delineation (e.g., data support a new pool interpretation that does not warrant the application of a gas allowable to the well), and
- administrative (e.g., the well can no longer meet the allowable).
The reason for the initial assignment of the allowable will dictate the basis for any requested change. The application must address what has changed since the original allowable was assigned to the well. Most gas allowables are assigned for equity purposes, resulting in equity matters being of primary consideration in most applications to amend or rescind a GA order.
The applicant will submit its GA application through electronic applications submission (EAS). Applications are registered using the Integrated Application Registry (IAR), and all material related to an application is stored in this system.
Review Process for Gas Allowable Applications
After the application is received, it will be reviewed for completeness under Directive 065 requirements. Extra attention is paid to equity considerations. If pool delineation is an issue (i.e., the AER’s current pool delineation is different from the applicant’s, and this difference is relevant to the assignment of the allowable), the AER will undertake geological and engineering reviews of the pool delineation. In all cases, contact with offset licensees will be checked to ensure that they were properly notified. Contact with any offset licensee that caused the assignment of the original allowable will be ensured.
If the application is determined to be incomplete, it will be closed and returned with an explanation. If an application contains minor deficiencies, a letter will be issued itemizing the information required.
If the application is determined to be complete, a review will be conducted as follows:
- Notice of all applications will be published on the Public Notice of Application page on the AER website to encourage public participation throughout the application process. This is in addition to any notification requirements an applicant must fulfill submitting an application.
- A person who believes they may be directly and adversely affected by an application may file a statement of concern (SOC) with the AER.
- If an SOC about an application is received, the application is considered “Non-Routine” and must follow the AER’s SOC procedures and will not be subject to the application timeline.
- If clarification or more information is required, you may receive a request for additional information by e-mail.
- You will receive an e-mail notification when your application has been dispositioned. You can find the disposition by following the link provided in the notification e-mail for 30 days after the date of disposition.
- Some decisions on the application can be appealed by eligible persons based on the Responsible Energy Development Act. The filing requirements for a request for regulatory appeal, including form, content, and time limits, are set out in section 30 of the Alberta Energy Regulator Rules of Practice. The regulatory appeals procedures are set out in sections 30 through 33 of the Alberta Energy Regulator Rules of Practice.
The processing time for this application is 20 calendar days.