How to Rescind a Holding from SO Order 5

Overview

Subsurface Order No. 5 applies to the Cardium Formation and, in certain areas, allows higher well density and fewer well spacing restrictions than previously applied. However, where an operator has an existing holding within the applicable Cardium area, that holding may need to be rescinded before the operator can fully utilize the subsurface order.

This guide summarizes the general process for preparing a request to rescind a holding from Subsurface Order No. 5 using the AER Digital Data Submission system.

When This Process Applies

This process may apply where an operator owns 100 percent of the lands within a holding and has not drilled any wells in the area to date. Rescinding a holding can be complex because holding and spacing decisions may affect ownership, development rights, and offsetting parties.

Operators should seek professional advice before rescinding a holding, especially where previously drilled wells could become noncompliant, or where the rescission may affect permissions or recognition from other operators. The example in the training material is illustrative only and does not represent an actual rescinded holding.

DDS Application Process

To begin, log into the DDS system. Under AER applications, select Submit Applications and choose Directive 065. Enter the file number in the upper-right area where applicable.

In the application information section, add the applicant. The application will request the applicant's BA code and contact information. In the application type section, select the option related to spacing and oil purpose, then choose Rescind Spacing. Add a clear application description explaining that the request is to rescind the holding.

In the ownership and notification section, describe the ownership and formation information. For example, the application may state that the applicant owns 100 percent in the Cardium Formation. The future applications section may also ask whether additional resources are being submitted. In the example workflow, the answer is no.

Area of Application and Holding Details

The application requires the operator to enter the area of application using the well spacing map and select the relevant formation. For the holding information, enter the density and buffer associated with the holding being rescinded.

The DDS mapping tool may be used to identify the appropriate area. Review the map carefully to ensure the selected lands and formation match the holding being addressed. After entering the required information, select Register and continue through the application workflow.

Key Considerations

The most important consideration is confirming that rescinding the holding is appropriate for the lands and development plan. Operators should confirm ownership, spacing history, drilled well status, offset implications, and whether the existing holding has any continuing value before submitting the application.

Documentation should be clear enough for the regulator to understand the request, the lands involved, and the reason the holding is being rescinded. Errors in land selection, formation selection, ownership description, or holding density can delay review.

Need Assistance?

Benoit Regulatory supports operators with Directive 065 applications, spacing and holding matters, subsurface order interpretation, ownership review, and related regulatory submissions. If you are considering rescinding a holding, our team can help assess the requirements and prepare the application.