Archived - Information Letter – Applications Filing – 2018 Actual and 2019 Estimated Gas Cost Allowance

All IOGC GCA applications must be submitted through the Petrinex-IOGC GCA module.

Further to the communications sent by Petrinex on February 19, 2019, Operators are required to ensure that all their facilities have been set-up by submitting GCA1's within the Petrinex-IOGC module www.petrinex.ca. Once this has been done, GCA applicants will then be able to submit GCA2's and GCA3's, as applicable. Operators are encouraged to submit their GCA1's as early as possible and all submissions, including the final rate approval submission, must be received no later than the deadline of May 31, 2019.

Applications for setups and annual costs (including custom fee's, if applicable) not submitted by the May 31, 2019 deadline will not be eligible for GCA deductions for 2018 royalties. In addition, failure to submit a final rate approval in Petrinex will also result in a zero GCA rate.

Furthermore, as stated in the February 19 communications, GCA applicants that do not submit their IOGC GCA applications prior to May 31, 2019 will not be eligible for the transition period to December 2, 2019.

If there are extraordinary circumstances that delay IOGC GCA application(s), GCA applicants  must request in writing an extension from IOGC by May 21, 2019 (i.e., a minimum of 10 calendar days before May 31, 2019). Please send requests for an extension (including the rationale for the delay), with "GCA Deadline Extension Request" in the "Subject Field or Line" to aadnc.gca.aandc@canada.ca or fax to 403-292-5618. It is the applicant's responsibility to ensure receipt of approval for an extension from IOGC on or before May 28,  2019 to avoid having a zero rate applied.

Mandatory fields in the respective GCA1, GCA2 and GCA3 forms must be fully completed, including any documents attached,  for IOGC to process submissions in Petrinex. The following information will be required:

• Field/metering schematics as attachments to the GCA1;
• Operating Costs (Full-cost FCC's): Detailed General Ledger Listing as an attachment to the GCA3;
• Operating Allowance (Capital based FCC's): No Operating cost details required;
• Capital Additions: Detailed AFE's and all AFE Copies, General Ledger Listing;
• Custom Processing Fee: A copy of the Agreement as an attachment to the GCA2.

IOGC requires complete information to accurately process applications in a timely manner. If any information is missing within the 2018 GCA application, the submission will be rejected and GCA applicants will be provided a maximum of 10 working days to resubmit. IOGC will reject submissions for costs that are deemed to be questionable.

Types of costs not to be included in GCA applications include:

• Accruals for operating and capital costs;
• 13th month throughput adjustments (CO&O agreements – Construction Ownership & Operations);
• Costs related to oil production;
• Well site and downhole related costs;
• All non-allowable capital and operating costs detailed in IOGC Gas Cost Allowance Guidelines;
• Costs for prior reporting periods.

Please note that, effective February 2019, IOGC will no longer provide electronic worksheets for any GCA applications.

Reminder: For all facilities, effective February 2019, please ensure the required GCA forms (GCA1 and/or GCA2 where applicable) are submitted in the Petrinex IOGC Module within 30 days from the start of production. Petrinex will not allow facility effective dates earlier than one month prior to the date submitted. For all estimates, a GCA3 submission will be required.

For additional information, please refer to the Petrinex Indial Oil and Gas Canada Inclusion Project website.

Please contact either Allison Monnery at 403-292-6026, Dorrie Chevrier at 403-292-5885, Amyn Vassanji at 403-292-5629 or send an email to aadnc.gca.aandc@canada.ca regarding any GCA related questions.