On April 20th, 2017, the Canada-Nova Scotia Offshore Petroleum Board (the Board) reviewed and approved an application from BP Canada Energy Group ULC, Interest Representative for Exploration Licences (ELs) 2431, 2432, 2433, and 2434, to enter into a consolidation agreement to consolidate these four ELs.
The following key elements were considered by the Board in approving the consolidation application:
- The Interest Owner has demonstrated that they have completed new and significant exploration activities on the Exploration Licences.
- The Interest Owner has provided reasonable geological basis for consolidation explaining how future exploration will be optimized by consolidation.
The consolidated agreement contains the following conditions:
- The effective date of the consolidated EL will be the spud date for the first validation well on one of the four ELs.
- The consolidated EL total work expenditure bid will be to the sum of individual EL work expenditure bids, minus approved allowable expenditures.
- The number of validation wells required for the consolidated EL is equal to the sum of the individual EL validation well requirements.
- A new work deposit will be submitted to the Board prior to the effective date of the consolidated EL.
- The work deposit will continue to be reduced by 25% of approved allowable expenditures during Period 1 of the consolidated EL.
- The term of the consolidated EL cannot exceed the legislated limit of 9 years (i.e. from the original effective date).
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