Capable of Producing Interpreted by Alberta Court of Appeals

A recent decision from the Alberta Court of Appeal has upheld the rejection of the "paying quantities" paradigm commonly applied in American jurisprudence when considering the shut-in well clause contained in the 1991 Canadian Association for Petroleum Landmen standard form freehold case. Omers Energy Inc. v. Alberta (Energy Resources Conservation Board), 2011 ABCA 251. Nevertheless the Court of Appeal expressly supports the underlying rationale of the "paying quantities" paradigm and has thus potentially opened the door for future decisions to incorporate such paradigm when interpreting shut-in well clauses. Published in the Canada – Oil & Gas section of the Rocky Mountain Mineral Law Foundation's Mineral Law Newsletter, Volume 28, Number 4, 2011.