Update: Stewart Estate v TAQA North Ltd, The Finale

In November 2015, the Alberta Court of Appeal issued its decision in Stewart Estate v TAQA North Ltd, 2015 ABCA 357, which addressed a number of issues significant to the oil and gas industry. We previously commented on this decision. In January 2016, ExxonMobil Canada Ltd. ("Exxon"), Nexen Inc. ("Nexen"), Bonavista Energy Corporation ("Bonavista"), Coastal Resources Limited ("Coastal") and Pengrowth Energy Corporation, as successor to Esprit Exploration Ltd. ("Esprit/Pengrowth"), filed applications with the Supreme Court of Canada (docket number 36810), for leave to appeal the decision in Stewart Estate v TAQA North Ltd, 2015 ABCA 357, citing the need for clarification of:

the proper measure of damages in mineral trespass cases; the standard of review applicable to interpretation of oil and natural gas leases and clarification of Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53; and whether a gross overriding royalty (GORR) holder has a duty to account for GORR payments to the lessor under the lease from which the GORR is carved. On June 30, 2016, the Supreme Court of Canada denied leave to appeal with costs. No reasons were given.

The decision of the Alberta Court of Appeal in Stewart Estate v TAQA North Ltd, 2015 ABCA 357 remains the current law with the following industry implications from a legal and practical perspective (reproduced from our...