Canada: How Long Is The Builders' Lien Registration Period For Drilling And/Or Servicing A Well Or Well Site On An Oil Sands Project? Spoiler Alert – It's 90 Days!

In the recent decision of Davidson Well Drilling Limited (Re), 2016 ABQB 416 ("Davidson") the Court of Queen's Bench of Alberta held that the 90-day lien period to register a lien against an "oil or gas well" or "oil or gas well site" applies to drilling on oil sands mines. The Court also concluded that the costs of trucking equipment away from a project site after it is completed may, in certain circumstances, be properly included in a builders' lien.

Under Section 41 of the Builders' Lien Act, RSA 2000 c B-7 ("BLA"), a lien for materials or the performance of services must, in almost every instance, be filed within the 45-day lien period starting from the day that the last of the materials or services are provided or the relevant contract is abandoned. The BLA does, however, provide a special exception respecting liens for improvements to an "oil or gas well" or "to an oil or gas well site", by extending the lien period to 90 days. As the terms  "oil or gas well" and "oil or gas well site" are not defined terms in the BLA, the prevailing legal and oil industry wisdom, prior to Davidson, has been that the extended 90-day period does not apply to non-traditional oil and gas extraction methods, such as the open pit mining methods often used on oil sands sites.

In Davidson, Davidson Well Drilling Limited was contracted to perform work on two Syncrude Canada Limited ("Syncrude ") open pit oil sands mining sites (the "Syncrude Lands"), which consisted of resource coring, geotechnical testing, sonic/auger rig drilling, dewatering/depressurizing and exploration work (the "Work"). Importantly, the Work involved drilling wells for resource coring to explore the location of bitumen from which oil would be processed. The Work was exploratory and there was no mineral extraction or direct recovery of oil and gas from these wells. Davidson subcontracted the Work to a number of subtrades (the "Subcontractors").

Syncrude terminated its agreement with Davidson on February 25, 2013 and a receiver (the "Receiver") was appointed on April 16, 2013. A number of the Subcontractors liened the Syncrude Lands.

On application by the Receiver seeking approval of its proposed distribution of the lien funds (pursuant to a settlement agreement with Syncrude that validated some but not all of the liens) and a cross-application by the Subcontractors to have their liens declared valid, the primary issue before the Court was whether the Work was done respecting improvements to an "oil or gas well" or to an "oil or gas well site". The answer to this question was important as it would determine whether the 45-day or the 90-day lien period applied and whether the Subcontractors lien claims registered after the 45-day period (but before the 90-day lien period) were valid.

At the hearing of the application, the Receiver's position was that the Syncrude Lands were open pit mines, not oil or gas wells or well sites and that in any event the work done to the sites was not in relation to the extraction of oil or gas. In contrast, the Subcontractors argued that the purpose of the extended 90-day lien period was to benefit contractors that drill oil or gas wells or service oil or gas well sites. As such, the Subcontractors argued, it is the activity of oil or gas well drilling and servicing of such sites that matters, and not the location of the Work that triggers the extended 90-day lien period.

In its written decision, the Court agreed with the Subcontractors, finding that the 90-day lien period for improvements to an oil or gas well or to an oil or gas well site required a liberal interpretation, consistent with the remedial purpose of the BLA. The Court further accepted that the Alberta Hansard record indicates that the 90-day lien period was enacted by the Alberta Legislature for the purpose of reflecting the unique industry payment practices affecting contractors that drill oil and gas wells or service oil and gas well sites, and the industry associated with those activities.  The Court held that nothing in Hansard or the language of the BLA suggests that the lien rights of drillers should be restricted depending on the location of their work. The Court further found that, in this case, the drilling of exploratory oil or gas wells was for the purpose of locating bitumen, from which oil would be processed therefore bringing the exploratory wells "within the ordinary and grammatical meaning of oil or gas wells". As there was the "potential" that oil or gas could be discovered, the lien period for the drilling on the oil sands mines was found to be 90 days.

The Court's secondary finding was that demobilization costs are included as work on or in respect of an improvement. In Schlumberger Holdings (Bermuda) Ltd v Merit Energy Ltd, [2001] 10 WWR 631 ("Schlumberger"), the Court held that transportation of equipment to a site was essential to the performance of work on an improvement but did not apply the same reasoning to transportation of equipment away from a site. The Court in Davidson disagreed with the decision in Schlumberger, finding that the equipment is required on a temporary site for the purpose of construction and essential to the completion of the improvement. Consequently, both the delivery of the equipment and the removal from a site afterwards give rise to lien rights.

Major Findings and Recommendations:

  • It is the active work of oil or gas well drilling and the active work of oil or gas well site servicing, and not the location of the work that will give rise to the extended 90-day lien period;
  • As always, the "work requirement" (which mandates that work must be in respect of an "improvement") must be met in order to give rise to entitlement for either the 45-day or a 90-day lien period;
  • Most non-drilling related work on an oil sands site, will remain subject to the 45-day lien period;
  • Accordingly, where work is not obviously related to drilling or servicing an oil or gas well or site, it is still best practice to register a builders' lien on non-traditional oil and gas extraction projects within the 45-day lien period; and
  • The costs of removing trucking equipment away from a site may be considered essential to the performance of work on an improvement to the land and, as such, properly included in a builders' lien.

With assistance from Danielle Douglas

To view the original article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.