What is an orphan well and how does it affect buying rural land in Alberta?
This answer covers the law of Alberta.
An orphan well is, in plain words, a well left behind without an operating company dealing with it, and it can complicate buying an acreage or farm. How an orphan well affects your purchase depends on the facts, so it is worth confirming with a lawyer before you close.
Surface ownership excludes the minerals unless your title carries both. The Surface Rights Act defines an operator generally as the person with the right to a mineral or to work it, or that person's agent. An operator may not enter the surface until it has the consent of the owner and occupant, or an order of the Land and Property Rights Tribunal. On freehold land only, the operator must also pay an entry fee, except certain exempted distributors and some older orders. It must also pay 80% of the compensation offered in its written offer for the first compensation year before entering, with limited exceptions.
Before closing, order the certificate of title and look for a mineral reservation clause such as 'excepting thereout all mines and minerals'. Gather the legal land description, LINC number or title number and search through SPIN2 or ARLO. How a particular well affects your purchase depends on your situation, so it is worth confirming with a lawyer.
Key takeaways
- Owning the surface of rural land does not mean you own the minerals underneath it, unless your title carries both surface and minerals.
- An operator generally needs the consent of the surface owner and occupant, or a Land and Property Rights Tribunal order, before entering your land.
- Your certificate of title may carry a mineral reservation clause, and you can search ownership through SPIN2 or ARLO.
- If a title cannot be found, Alberta directs people to the Mines and Minerals Team at Energy and Minerals.