Call for Bids NS09-1

Full Call for Bids NS09-1 document can be found here

The Canada-Nova Scotia Offshore Petroleum Board (the "Board") hereby calls for bids for two Exploration Licences covering those lands in the Nova Scotia offshore area described in Appendix I (the "Lands").

2.1 Applicable Legislation

This Call for Bids is made pursuant to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, S.C. 1988, c. 28, as amended, and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act, S.N.S. 1987, c. 3, as amended (the "Legislation").

2.2 Terms and Conditions of Exploration Licences & Significant Discovery Licences

The Exploration Licence for each parcel will be substantially in the form attached hereto as Appendix III. Any succeeding Significant Discovery Licence issued with respect to the Lands will be substantially in the form attached hereto as Appendix IV. The submission of bids in response to this Call for Bids shall constitute agreement to the terms and conditions set out in Appendix III and IV.

2.3 Submission of Bids

(a) Bids must be received by the Board before 4:00 p.m. Atlantic Time, June 24, 2010 at the following address:

CALL FOR BIDS NS09-1
Canada-Nova Scotia Offshore Petroleum Board
6th Floor, T.D. Centre
1791 Barrington Street
Halifax, Nova Scotia
B3J 3K9

(b) Bids must be in the form attached as Appendix II and must be submitted in a sealed envelope marked "CALL FOR BIDS No. NS09-1 (Parcel # _ )."

(c) The Board may amend this Call for Bids at any time up until 10 days prior to the Closing Date specified in paragraph (a) above. Any amendment made to the Call for Bids shall be published on the Board's website (www.cnsopb.ns.ca). Bidders are advised to refer to the Board's website prior to submitting their bids.

2.4 Submission of Written Comments

The public is invited to submit written comments to the Board on the Lands included in the Call for Bids. Such submissions will be considered by the Board before the issuance of Exploration Licences. The deadline for the submission of written comments is 4:00 p.m. Atlantic Time, June 10, 2010.

2.5 Bid Selection Criterion

(a) Work Expenditure Bid

(i) Bidding on each parcel will be based solely on the amount of money proposed to be expended on the exploration of the respective parcel and on research & development and education & training within Period 1 of the term of the Exploration Licence (“Work Expenditure Bid”), determined in accordance with the Schedule of Allowable Expenditures as defined in Schedule B of the Exploration Licence attached as Appendix III.

(ii) In submitting a Work Expenditure Bid, the bidder commits to spend at least 95% of the Work Expenditure Bid on exploration of the respective parcel.

(iii) There is no obligation for the bidder to include research & development or education & training as part of the Work Expenditure Bid. However, in the event the bidder spends money on such purposes, a maximum of 5% of the Work Expenditure Bid may be applied for as an Allowable Expenditure as defined in Schedule B of the Exploration Licence attached as Appendix III.

(iv) The Schedule of Allowable Expenditures will be used in determining the amount of money expended pursuant to the Work Expenditure Bid, and is defined in Schedule B of the Exploration Licence attached as Appendix III.

(b) Minimum Bid

(i) The minimum bid that will be considered is $500,000 of work expenditure.

(ii) The submission of a Work Expenditure Bid does not obligate the successful bidder to perform the full dollar value of work. However, if work is not performed in the full amount of the Work Expenditure Bid, the unrefunded balance of the Work Deposit will be forfeited upon expiry, surrender or cancellation of Period 1, as more particularly described in the form of Exploration Licence attached as Appendix III.

(c) Acceptance and Rejection

The Board is not obliged to accept any bid nor is the Board required to issue an interest as the result of this Call for Bids.

(d) Tied Bids

In the event of two or more bids being tied, each bidder involved will be notified of the tie and will have the opportunity to submit a new bid in its proper form within a time frame specified by the Board which will not be more than 24 hours after being notified.

2.6 Deposits

(a) Bid Deposit

(i) Each bid must be accompanied by a Bid Deposit in the amount of $10,000, in the form of a certified cheque or bank draft payable to the Receiver General for Canada.

(ii) The successful bidder will receive a refund of the Bid Deposit, without interest, if the Licence Deposit is posted within the time specified and any outstanding Environmental Studies Research Fund (ESRF) levies are paid as described below.

(iii) The failure of the successful bidder to post the Licence Deposit within the specified time will result in forfeiture of the Bid Deposit and disqualification of the bid, and in that event the Board may, if it sees fit, award the Exploration Licence to the second highest bidder without making another Call for Bids.

(iv) Bid Deposits will be returned to unsuccessful bidders, without interest, following announcement of the winning bid and receipt of the Licence Deposit by the successful bidder.

(v) Bid deposits will be returned by courier service unless the bidder requests in writing, at the time of bid submission for the Board to hold the Bid Deposit at its office until it is picked up by the bidder or designated representative or agent of the bidder.

(b) Licence Deposit

(i) As a condition of issuance of the Exploration Licence, the successful bidder will be required to post a refundable Licence Deposit of $50,000 or one-percent (1%) of the Work Expenditure Bid, whichever is greater, in the form of a certified cheque or bank draft payable to the Receiver General for Canada within thirty (30) days of being notified that its bid was successful. This deposit will be refunded in full upon the posting of the Work Deposit, as described in paragraph 2.6 (c) (i) below. No interest will be paid on this Licence Deposit.

(ii) In the event that the Work Deposit is not posted by the third anniversary of the licence, the Licence Deposit will be forfeited and the licence cancelled.

(iii) Parties submitting a joint bid may post separate deposits representing each party's proportionate share of the required Licence Deposit. However, the Board will only deal with the representative designated in the bid. The failure of any party to submit its share of the Licence Deposit will be considered the failure of all parties participating in the joint bid.

(c) Work Deposit

(i) The interest owner will be required to post 25% of the Work Expenditure Bid as security for the performance of work by no later than the third anniversary of the licence. This deposit will be referred to as the Work Deposit. Failure to post the Work Deposit as security for the performance of work will result in the cancellation of the licence and forfeiture of the Licence Deposit.

(ii) This Work Deposit is refundable to the extent of 25% of approved Allowable Expenditures, as more particularly described in the form of Exploration Licence attached as Appendix III.

(iii) Work Deposits must be in the form of cash or promissory notes payable on demand to the Receiver General for Canada. The promissory note must be accompanied by a bank letter of guarantee issued by a Canadian chartered bank which states their agreement to honour on presentment for payment. The form of the promissory note and bank guarantee must be acceptable to the Board. Acceptable forms of a promissory note and bank guarantee are attached as Appendix VI.

(iv) Parties submitting a joint bid may post separate securities representing each party's proportionate share of the required Work Deposit. However, the Board will only deal with the representative designated in the bid. The failure of any party to submit its share of the Work Deposit will be considered the failure of all parties participating in the joint bid.

2.7 Identification of Bidders

(a) Bids must identify the parties making the bid and their participating shares. Under the Legislation, an Exploration Licence must be issued to the person who submits the winning bid. Therefore, agents should identify the principals for whom they act and their participating shares. The Board will publicly announce the identity of the successful bidder and the amount of the winning bid.

(b) The identities of unsuccessful bidders and the amounts of their bids will not be disclosed.

2.8 Environmental Studies

(a) In accordance with the Legislation, prior to the authorization of any petroleum related activities on the Lands the operator must demonstrate to the satisfaction of the Board that such activities can be conducted in an environmentally safe manner. Special precautions, such as enhanced environmental assessments, more stringent mitigation measures and environmental effects monitoring may be required in some cases.

(b) Upon issuance of the Exploration Licence, the successful bidder must pay Environmental Studies Research Fund (ESRF) levies under Part VII of the Canada Petroleum Resources Act, S.C. 1986, c. 45, for the year in which the licence is issued and retroactive levies for the two preceding years. Thereafter, ESRF levies as fixed from time to time by the federal Minister of Natural Resources will be payable unless the interest owner surrenders the licence prior to the payment due date. Both parcels are in ESRF Region #12, Scotian Shelf East. The 2008 and 2009 ESRF levy rates for Parcel #1 and Parcel #2 would be as follows:

2008	Levy #20	$0.2668/ha
2009	Levy #21	$0.0908/ha

(c) ESRF matters are not administered by the Board, but are the responsibility of the federal Minister of Natural Resources. ESRF levies are determined by multiplying the number of hectares of land included in the licence by the ESRF rate for the applicable region.

2.9 Benefits Plan

(a) Operators proposing to conduct work in the Nova Scotia Offshore Area will ordinarily be required to submit a Canada-Nova Scotia benefits plan to the Board for approval. This is a plan required by the Legislation for the employment of Canadians, and in particular, members of the labour force of Nova Scotia, and for providing manufacturers, consultants, contractors and service companies in Nova Scotia and other parts of Canada with a full and fair opportunity to participate on a competitive basis in the supply of goods and services.

(b) Industrial Benefits and Employment Plan Guidelines and Industrial Benefits Information Bulletin are attached as Appendix V.

2.10 Information

(a) Geological, geophysical and well information is available with respect to the Lands and the surrounding area on the web at www.cnsopb.ns.ca or requests for information may be directed to:

Mary Jean Verrall
Supervisor, Geoscience Reseach Centre
201 Brownlow Avenue
Dartmouth, Nova Scotia
B3B 1W2
Tel. (902) 468-3994
Fax (902) 468-4584
mverrall@cnsopb.ns.ca

(b) Inquiries regarding this Call for Bids may be directed to:

Steven F. Bigelow
Manager, Resources and Rights
Canada-Nova Scotia Offshore Petroleum Board
6th Floor, T.D. Centre
1791 Barrington Street
Halifax, Nova Scotia
B3J 3K9
Tel. (902) 422-5588
Fax (902) 422-1799
sbigelow@cnsopb.ns.ca

2.11 Non-Compliance

Failure to comply with the Call for Bids or any term or condition of the Exploration Licence or resulting Significant Discovery Licence or Production Licence may result in cancellation of the respective Licence.

DATED at Halifax, Nova Scotia this 26th day of October 2009.
CANADA-NOVA SCOTIA OFFSHORE PETROLEUM BOARD
Stuart Pinks, P.Eng.
Chief Executive Officer

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Overview of the Call for Bids

Call for Bids NS09-1

The Lands

Exploration Licence

Significant Discovery Licence

Industrial Benefits & Employment Plan

Forms

Call for Bids NS09-1