Canada - Oil & Gas

摘要

Interpretation of Gross Negligence Under the 2007 CAPL Operating Procedure The decision in Bernum Petroleum Ltd. v. Birch Lake Energy Inc., 2014 ABQB 652, is of particular interest to parties whose agreements incorporate the Canadian Association of Petroleum Landmen (CAPL) 2007 Operating Procedure (2007 CAPL) and, more generally but with less direct application, whose agreements invoke the concept of gross negligence as a threshold for operator liability. The decision in Bernum interprets the meaning of "Gross Negligence or Wilful Misconduct" in the 2007 CAPL and comments on that standard's context within the oil and gas industry. The decision also indicates that the contractual exclusion in 2007 CAPL of a nonoperator's right to set-off any claims against the operator against operating costs will be enforced even in the face of claims of gross negligence, wilful misconduct, and/or breach of fiduciary duty that give rise to triable issues.