Common Purchaser

The Oil and Gas Conservation Act (OGCA) gives each owner the opportunity to secure its share of the production of oil or gas from any pool. Accordingly, the AER may issue a declaration of a common purchaser of oil and gas under sections 50(1) and 51(1) of the OGCA. Historically, the AER has not received applications filed under section 50(1) for common purchasers of oil, as the prorationing of oil has been handled under other legislation. However, the AER has considered many applications under section 51(1) for common purchasers of gas and, accordingly, existing practices primarily deal with the common purchasers of gas.  

A typical situation that would warrant the filing of a common purchaser application with the AER would be when a well’s gas reserves are being drained by other wells producing in the same pool. The owner’s well is being drained because the owner cannot secure a reasonable market for its gas or negotiate a share of the existing markets of other owners that have producing wells in the same pool. The well owner has recourse to apply for the declaration of a common purchaser in order to recover its share of gas from the pool.

An order under sections 50(1) and 51(1) of the OGCA obliges each common purchaser, among other things, to purchase production offered for sale to it without discrimination in favour of one producer or another in the same pool. Therefore, a common purchaser order would allow an owner that has been unable to secure its own market to share in the markets of other owners in the pool.

An applicant filing a request for the declaration of a common purchaser of gas has the option to request that the AER direct

  • the point at which the common purchaser will take delivery of gas offered for sale, and
  • the proportion of gas that the common purchaser will purchase from each producer or owner offering gas for sale.

Application Submission

The applicant will submit its common purchaser 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 Common Purchaser Applications

After an application is received, it will be reviewed for completeness under Directive 065 requirements. If the application is determined to be incomplete, it will be closed and returned with an explanation. If it contains minor deficiencies, a letter will be issued itemizing the information required.

In evaluating an application for a common purchaser order, the AER considers whether the applicant has demonstrated

  • whether drainage has occurred after the completion of a well on the applicant’s property and if so, to what extent;
  • whether opportunities have existed for the marketing of production from the applicant’s property and if so, when and the nature of them;
  • future prospects for marketing the production; and
  • when application is being made under sections 51(4)(a) or 51(4)(b) for designation of a delivery point or proportion of production to be purchased, the applicant could not make reasonable arrangements on these matters.

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.
  • 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.
  • Common purchaser applications will likely proceed to a public hearing.
  • 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.

Application Timelines

The processing time for this application is 120 calendar days