Mineral Rights on Crown Land

Ontario Regulation 263/02 under the Mining Act provides authority to issue exploration licences and production and storage leases for oil and gas on Crown land in Ontario.

The majority of Crown land oil and gas mineral rights are located within Ontario’s 1.2 million hectare portion of Lake Erie. This area is subdivided into 5 minute longitude and latitude numbered parcels known as “blocks”. Each block is further subdivided into 1 minute longitude and latitude parcels known as “tracts” lettered A to Y. Each tract is approximately 255 hectares.

Mineral rights for exploration licences are acquired through a tendering process. A notice of tender is posted in the Nickels Daily Oil Bulletin and through the Ontario Petroleum Institute within two weeks of the end of each calendar quarter (March, June, September and December). The highest cash bid determines the successful bidder. Successful bidders and amounts are posted in the above-mentioned publications.

The drilling for and production of oil from wells located offshore is prohibited by regulation and provincial policy. Licensees encountering oil in an offshore well must plug the well and surrender the licence. Licence rights for gas may be retained. However, offshore oil may be produced from land-based deviated or horizontal wells.