Omers Energy Inc. v. Alberta (Energy Resources Conservation Board)

Page: 10(c)Nothing herein shall require the settlement of strikes, lockouts or otherlabour disturbances except in the sole discretion of the Lessee.[41] Force majeure is defined in Clause 1 as follows:(c) “force majeure”means any cause beyond the Lessee’s reasonable controland, without limitation, includes an act of God, strike, lockout, or otherindustrial disturbance, act of any public enemy, war, blockade, riot, lightning,fire, storm, flood, explosion, unusually severe weather conditions,government restraints, including road bans, but shall not include lack offinances; (Emphasis added)[42] The Force Majeure Clause protects the loss of the lessee’s investment in the lease for definedreasons beyond the lessee’s reasonable control. The fact that “lack of finances” is excluded as acause of force majeure supports the clear inference that the parties intended the resource to bedeveloped without regard to lack of finances.[43] Similarly, Clause 3 of the lease – the Suspended Wells Clause – gives the lessee furtherflexibility. It reads:3. SUSPENDED WELLSIf, at the expiration of the primary term or at any time or times thereafter,there is any well on the said lands, the pooled lands, or the unitized lands,capable of producing the leased substances or any of them, and all suchwells are shut-in or suspended, this Lease shall, nevertheless, continue inforce as though operations were being conducted on the said lands, for solong as all the said wells are shut-in or suspended and so long thereafter asoperations are conducted upon the said lands, the pooled lands or the unitizedlands, with no cessation, in the case of each cessation of operations, of morethan 90 consecutive days. If no royalties are otherwise payable hereunderduring a lease year after the primary term within which such shut-in periodor periods occur and during such lease year no other operations areconducted on the said lands, the pooled lands, or the unitized lands then theLessee shall pay to the Lessor an amount equal toONE HUNDRED SIXTY AND 00/100 DOLLARS ($160.00) within 90 daysafter the expiry of such lease year (herein called the “suspended wellpayment”). (Emphasis added)[44] Clause 3 provides that when a well that is “capable of producing the leased substances” isshut-in or suspended the lease continues as though operations were being conducted. By deemingthat operations are continuing when the shut-in or a suspended well is capable of producing theleased substances, the clause protects a lessee against the loss of its investment. As the Board noted,