UNDERSTANDING LIABILITY FOR OIL AND NATURAL GAS ASSETS IN ALBERTA - THE LIFE CYCLE OF A WELL

UNDERSTANDING LIABILITY FOR OIL AND NATURAL GAS ASSETS IN ALBERTA THE LIFE CYCLE OF A WELL Our industry Every company that explores for and develops Canada’s oil and natural gas safely manages resources is financially responsible for safely managing each well it drills, as well as any associated facilities. [...] CA JUNE 2022 COVERING THE COSTS FOR ORPHAN WELLS Abandoned, inactive and suspended wells have an identifiable owner, the licensee, and are financially managed by the licensee through to end-of-life activities. [...] To protect against licensees whose businesses failed and are unable to cover the costs for abandonment and reclamation, the AER collects an annual levy (the Orphan Well Levy) from all active oil and natural gas producers and remits these funds to the Orphan Well Association (OWA). [...] Managing THE ORPHAN WELL ASSOCIATION orphan wells is In Alberta, when a well has been deemed an orphan by the AER, the OWA on behalf of industry, assesses the work needed to abandon or reclaim the site a top priority for safely, and then oversees performance of this task. [...] For the fiscal year 2022-2023, industry to return the OWA has levies totalling $78 million which is 100 percent industry funded, to ensure orphan wells are abandoned safely and sites are reclaimed according the land to an to regulations.