2015 CAPL Farmout & Royalty Procedure
Fun Fact: The 1997 Farmout & Royalty Procedure Committee saw representatives of CAPLA, PASC, PJVA and the legal community involved directly at all stages as full members of the Committee. This was the first time that a cross-association approach was used in a CAPL project of this type. This approach has been applied to the subsequent projects for the CAPL Operating Procedure and the CAPL Property Transfer Procedure, as well as to the 2015 updates to the Farmout & Royalty Procedure and Overriding Royalty Procedure.
Here is the hyperlink to the CAPL website content respecting the 2015 CAPL Farmout & Royalty Procedure and the 2015 CAPL Overriding Royalty Procedure and prior versions of the documents: https://landman.ca/downloads/bizforms. The CAPL website includes materials in addition to those provided here, including the annotated version of each document and a downloadable election sheet for each document.
Doing the update to the 1997 CAPL Farmout & Royalty Procedure in parallel with the update to the 2007 CAPL Operating Procedure created an alignment between the 2015 versions of those documents that reinforces the use of each document. The interrelationship between those documents is such that the vision for future updates is to continue to prepare them in parallel.
Matrix of Changes: Here is a 38-page matrix of changes between the 2015 and 1997 Farmout & Royalty Procedures. It provides a context for every material change in the document and the rationale for each change. It offers a compelling case for change that can largely be summed up in two words - horizontal wells.
Overview Presentation: Here is a PDF of the overview presentation that highlights the major changes between the 2015 and 1997 Farmout & Royalty Procedures.
CAPL Negotiator Articles: Here is a PDF of a series of four articles published in the CAPL Negotiator in 2016 to facilitate industry’s transition to the 2015 document by outlining the major differences relative to the 1997 Farmout & Royalty Procedure.
Evolution of Select Farmout Principles Over Time: Here are some materials that review the evolution of the handling of certain key topics associated with farmouts over time: