The applicant sought a declaration that its gas storage lease was the only valid instrument permitting storage of gas under certain lands after the Court of Appeal held that the respondent’s gas storage lease had terminated but its earlier oil and gas lease remained valid.
The respondent argued that the oil and gas lease, as amended by a unit operation agreement, granted continuing gas storage rights.
The court applied principles of commercial contractual interpretation and considered the relationship between multiple agreements governing the same subject matter.
It held that the later gas storage lease, which contained an entire agreement clause and broader storage provisions, was intended to replace any storage rights that may have existed under the earlier oil and gas lease.
The application was granted and the respondent was found not to possess storage rights under the earlier lease.
