Keyte and Associates Arbitration and Mediation

OIL AND GAS



Resource agreements have become major sources of disputes, especially over the last ten years. Issues frequently arise between companies and individuals and between working interest partners. As projects have become more complex and much more expensive, areas of dispute have increased.

Because of the investment required to develop resource plays corporate relationships are lasting longer and good relations must be preserved.

Government licensing requirements are more involved and the penalties for incomplete or manipulated public consultations can be draconian.

Owners of private land and occupants have become more sophisticated, are quicker to involve lawyers, and have the benefit of organised groups both private and governmental. Most often you will need to re-establish a productive and civil relationship with your landowners as more activities on their lands may be required.

Therefore the playing field for resource development companies has become more sophisticated today than it has ever been.

Our strength at Keyte and Associates is showing you various options for settling your disputes and offering you some guidelines for getting over these speed-bumps more smoothly. We work with you to figure out options and create a sound solution that is quick, less stressful and more cost effective than Court and produces a final settlement.


Why Use Mediation?

Mediation, when approached thoughtfully and in good faith, presents to the parties a more informed view of their options and provides a clearer understanding of the other party's issues, attitudes, values and beliefs surrounding the dispute. When approached with an appropriate attitude, mediation is very effective in producing a thorough understanding of both parties' issues. This often creates new or better understandings and allows for mediated settlements.


Why Use Binding Mediation?

Often times if there are many issues to resolve or if parties have been trying to resolve issues for a long time, Binding Mediation is preferred to straight mediation. In Binding Mediation those issues that the parties can not solve together will be settled by the Mediator. In most cases the "threat" of having someone impose a solution on the parties creates more flexibility/understanding/creativity and results in party-made solutions. If not however the Mediator will impose a solution on the parties and it is binding.


Why Use Arbitration?

Sometimes disputes have become mired in personalities, issues are complex or interpretations are vastly opposed and trial appears as the next logical step. In these cases mediation is not appropriate nor is an attempt at Binding Mediation. In these disputes you need a structured setting, a structured process and an independent third party analysis and decision. This is when Arbitration works best.

Arbitration is a mini-trial in a formal setting with an Arbitrator acting as a private judge. The arbitration is conducted under the Arbitration Act, evidence is presented at a Hearing and the Arbitrator will issue a legally binding Award with reasons. The Awards are rarely appealable and in most appeals the Courts are reluctant to interfere with an Arbitrator's Award. You are truly done and at an expense far less than trial and years faster in resolution.

Examples of Resource issues brought before Arbitration and Mediation:

OIL & GAS
  • Gas processing
  • Gas re-pricing contract clauses
  • Pipeline transportation fees and accounting
  • Gas gathering and compression
  • Jumping Pound formula interpretations and applications
  • Plant fees and expenses charged back to through-put customers
  • Gas gathering and processing dispute
  • Disputes over gas compression equipment (under or over capacity)
  • Force majeure suspension of obligations to deliver or take (take or pay)
  • Valuation of gas reserves
  • Claims for damages for failure to obtain and/or maintain licences and permits
  • Claims relating to delays due to failure to comply with G56 or other EUB requirements
  • Valuation of oil reserves
LESSOR ROYALTY DISPUTES
  • Market value of royalty claims
  • Claims for failure to reasonably market production
  • Claims referring to deduction of post-production costs from the royalty
  • Claims for capture, conversion and theft of minerals not under lease
  • Claims of mismanagement resulting in increased costs and decreased revenues
  • Oil and gas title failures (dead or failed leases)
  • Drainage
  • Pooling disputes
  • Forced lease termination
  • Drainage claims
EXPLORATION, DEVELOPMENT AND PRODUCTION DISPUTES
  • Disputes from drilling contracts
  • JOA disputes
  • Force majeure issues
  • Disputes over rights to participate in acquisitions and receive proceeds from production
  • Amounts owed and proper application of expenses under JOAs
  • Disputes of alleged breach contract
  • Effective dates of acquisition and rights of purchase
  • Reasonable development
  • Preferential rights disputes
  • Claims for failure to account for reclamation costs
  • Area of Mutual Interest disputes
  • Suits to determine status of payout and vesting of back-in interests
  • Claims for well and formation damage resulting from shut-in operations
  • Damages claimed for failure to pass good title to property
  • Claims for fraud and intentional misrepresentation in data room information
  • Oil and gas title disputes
  • Reasonable development claims
  • Lease termination suits
  • Disputes under joint operating agreements
  • Disputes under joint exploration and development agreements
  • Preferential rights disputes
  • Suits to determine status of payout and vesting of back-in interests
  • Tract factor disputes
  • Claims for well and formation damage resulting from shut-in operations
OWNERS AND OCCUPANTS
  • Drilling location disputes
  • Well Licence and Surface Access including:
    • Groundwater pollution and disruption of potable water flow
    • Damage claims
    • Reclamation
    • Reduction of Surface Lease payments after reclamation and prior to Certificate issuance
    • Setting of renewal rates (5 year review)


FAQs

What's the quickest way to get started?
Simply give our office a call at 403-437-0380 to set up a mediation orientation.


How does an initial consult work?
A phone or email contact will get our office to contact you for a brief telephone discussion. Next an email or fax usually works best to set out the issues with the other party. We will then arrange to meet with both parties jointly or separately to go over the basics of mediation and the types of mediation offered.


How can you help us speak to the other party about mediation?
There are several options for contacting the other party and suggesting mediation. Call our office to see how we can help.


How do I prepare for commercial mediation?
Mediation is most efficient when you come to your mediation session prepared with as much information as possible. The better informed you are about your issues, positions and your goals for the outcome of your situation, the more progress we can make in your mediation session.


How do mediation costs compared to litigation costs?
Commercial mediation can be quick! Usually the parties are both sophisticated and real issues come to the front quickly. If the parties are the real decision makers then solutions can be reached. Most issues are found to be either solvable or not rapidly. Anything that gets solved in mediation means less to take forward to trial hence considerable cost savings. Often times Arbitration is the next step after mediation.


Do I need a lawyer or other professional input before or during mediation?
We encourage people to use lawyers' and other professionals' time wisely and cost-effectively to suit their needs and level of comfort. That may mean you speak to a lawyer and accountant, an engineer etc. for an hour or so prior to mediation or it may mean that you hire a lawyer to represent you during the mediation sessions. It depends on what you feel you need the professionals to do. You will eventually need a lawyer to ensure your rights are protected and to prepare an agreement if a settlement comes out of the mediation.


If I have an attorney, or if we have filed in court, can I still mediate issues?
Of course! Much commercial mediation is conducted after initial court documents have been filed to establish or to preserve claims. Many of these disputes are settled at mediation and court proceedings are no longer required. If mediation fails then the parties can proceed with their trial. Many judicial jurisdictions now require a bona fide attempt at some form of dispute resolution prior to obtaining a court date.