The following is an overview of key developments in Canadian law and regulatory practice applicable to private M&A in the oil and gas industry from July 1, 2015 to September 30, 2015.
Oil & Gas Regulatory
- Alberta’s royalty review panel is expected to report to the provincial government by the end of 2015. The timing of the province’s decision on a new royalty framework is not known, but it has indicated that any royalty changes will not be made effective until 2017.
- Alberta’s Climate Change Advisory Panel completed consultations on a new provincial climate change policy that is expected to recommend tougher rules on emissions. The panel’s report to the province is expected imminently, but it is not known when it will be made public.
- The federal department of natural resources sought comment on draft guidelines designed to assist oil and gas companies subject to new federal legislation requiring the disclosure of payments made to governments.
- An Alberta court upheld the no fault provisions of a drilling services contract with the result that a producer was unable to recover approximately $3.5 million in damages caused by the driller’s failure to properly mix drilling mud.
- The Supreme Court found that an Ontario court has jurisdiction to hear an action to enforce in Canada a multi-billion dollar judgment of an Ecuador court against two Chevron entities - one with no presence in Ontario another that was not party to the Ecuadorian judgment.
- A B.C. court refused a taxpayer’s attempt to substitute a share transfer structure with a more tax efficient arrangement because the taxpayer failed to prove he had a specific intention to avoid a capital gain. A general intention to avoid taxes was not sufficient to have the transfer unwound.
- The Quebec Court of Appeal allowed an employee to recover the lost value of unexercised options because the employer had falsely advised the employee that his options would not expire on dismissal.
- An Ontario court allowed an employee to receive severance payments from an employer even though the employee did not disclose during settlement negotiations with the employer that he had breached his non-competition agreement by taking a position with a competitor after termination.
- The Competition Bureau released updated instructions for producing electronic records in support of supplementary information requests. It is expected that the rules will increase compliance costs.