CSA Staff Notice 51-309: NI 51-101 - Standards of Disclosure for Oil and Gas Activities

CANADIAN SECURITIES ADMINISTRATORS

STAFF NOTICE 51-309 (REVISED)

NATIONAL INSTRUMENT 51-101

STANDARDS OF DISCLOSURE

FOR OIL AND GAS ACTIVITIES

ACCEPTANCE OF CERTAIN

FOREIGN PROFESSIONAL BOARDS

AS A "PROFESSIONAL ORGANIZATION"

Updated March 9, 2007

This notice updates and replaces the information in CSA Staff Notice 51-309 originally dated January 19, 2004, and updated June 8, 2004, and October 4, 2004.

Introduction

In January 2004 (February 2007 in Québec){1}, we added the following professional boards to the list of professional organizations accepted for the purposes of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101).

• California Board for Professional Engineers and Land Surveyors,

• State of Colorado Board of Registration for Professional Engineers and Professional Land Surveyors,

• Louisiana State Board of Registration for Professional Engineers and Land Surveyors,

• Oklahoma State Board of Registration for Professional Engineers and Land Surveyors, and

• Texas Board of Professional Engineers.

On June 8, 2004{2}, we added the American Association of Petroleum Geologists (AAPG) to that list. At its request, on March 1, 2007{3}, we revoked the June 8, 2004 MRRS Decision Document and accepted the AAPG as a "professional organization" under NI 51-101, but only for Certified Petroleum Geologists within the AAPG's Division of Professional Affairs.

On October 4, 2004 (February 2007 in Québec){4}, we added to that list the American Institute of Professional Geologists (AIPG), but only for the AIPG's Certified Professional Geologists.

On March 1, 2007{5}, we added the United Kingdom's Energy Institute to that list.

Accompanying this notice is an updated list of all accepted professional organizations under NI 51-101.

Background

NI 51-101 requires reporting issuers to appoint one or more qualified reserves evaluators or reserves auditors to report to its board of directors on its reserves data (section 3.2). To be "qualified", a reserves evaluator or reserves auditor must possess appropriate professional qualifications and experience and be a member in good standing of a "professional organization" (subsections 1.1(x) and (y)).

The definition of "professional organization" in subsection 1.1(w) has four elements:

(w) "professional organization" means a self-regulatory organization of engineers, geologists, other geoscientists or other professionals whose professional practice includes reserves evaluations or reserves audits, that:

(i) admits members primarily on the basis of their educational qualifications;

(ii) requires its members to comply with the professional standards of competence and ethics prescribed by the organization that are relevant to the estimation, evaluation, review or audit of reserves data;

(iii) has disciplinary powers, including the power to suspend or expel a member; and

(iv) is either:

A. given authority or recognition by statute in a Canadian jurisdiction; or

B. accepted for this purpose by the securities regulatory authority or the regulator.

CSA staff reviewed relevant documentation concerning the professional organizations' authority and recognition, membership requirements and disciplinary powers. We concluded that acceptance of the professional organizations would not be contrary to the public interest and would facilitate compliance with NI 51-101 by enabling reporting issuers active in the United States and the United Kingdom to continue the traditional, and acceptable, practice of engaging US and UK professionals whose qualifications are consistent with the objectives of NI 51-101.

Acceptance of Professional Organizations does not Supersede Other Requirements

Membership in one of the accepted professional organizations does not automatically mean that a person is a "qualified reserves evaluator" or "qualified reserves auditor" under NI 51-101. To be qualified under NI 51-101, the person must also have the requisite professional experience to carry out reserves evaluations or reserves audits in accordance with the requirements of NI 51-101 and the standards of the Canadian Oil and Gas Evaluation Handbook.

The CSA's acceptance of the professional organizations under NI 51-101 is only for the purposes of NI 51-101. NI 51-101 does not supersede or alter local regulations or requirements regarding professional membership, practice or proficiency.

Questions

Please refer questions to:

March 9, 2007

NATIONAL INSTRUMENT 51-101

STANDARDS OF DISCLOSURE

FOR OIL AND GAS ACTIVITIES

PROFESSIONAL ORGANIZATIONS

This list, updated March 9, 2007, supersedes the list of organizations set out in section 1.5(b) of Companion Policy 51-101CP.

Each of the following organizations is a professional organization for the purposes of NI 51-101:

Canada

United States

United Kingdom

Energy Institute, but only for its Fellows and Members

{1} MRRS Decision Document dated January 6, 2004 In the Matter of ... National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) ... and ...[the professional boards named in this CSA notice]. In Québec, Decision No 2007-PDG-0050 dated February 16, 2007.

{2} MRRS Decision Document dated June 8, 2004 In the Matter of ... National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) ... and ...the American Association of Petroleum Geologists (AAPG).

{3} MRRS Decision Document dated March 1, 2007 In the Matter of ... National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) ... and ...the American Association of Petroleum Geologists (AAPG) but only members of the AAPG's Division of Professional Affairs.

{4} MRRS Decision Document dated October 4, 2004 In the Matter of ... National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) ... and ...the American Institute of Professional Geologists (AIPG). In Québec, Decision No 2007-PDG-0050 dated February 16, 2007.

{5} MRRS Decision Document dated March 1, 2007 In the Matter of ... National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) ... and ...the Energy Institute of the United Kingdom.