Saskatchewan starts with "deep rights reversion"

Apr. 3, 1998 In Saskatchewan, Canada, Energy and Mines Minister Eldon Lautermilch announced that, the ownership of oil and gas rights to unexplored and non-producing deep formations in Crown leases more than 5 years old will start returning to the Government of Saskatchewan. These lands will be offered for re-sale to other oil and gas exploration companies through the government land sales held every second month to stimulate new investment and maximise the benefit of the province's oil and gas resources.
Known as "deep rights reversion", the process of severing oil and gas rights below the deepest designated producing formation in a Crown petroleum and natural gas lease began more than 5 years ago when the oil and gas industry was notified of the government's intentions.
The government announced that it would amend The Crown Minerals Act to include deep rights reversion provisions similar to those already in place in Alberta.
Companies acquiring leases since then are given 5 years to exercise their exploration and production rights after which time, formations below the deepest producing level will once again become the property of the Crown.
"Oil and gas companies have told us they are interested in making the additional investment to purchase and explore these deep rights, particularly with the deep discoveries in the Midale area," Lautermilch said.
"That is because they are relatively unexplored and technological advancements have made it easier for industry to explore, develop and produce oil and gas from those depths."
Due to the time required to confirm the severed rights and the deadlines for posting land being offered for sale, the first phase of expired deep rights will likely be offered in the October 1998 land sale.