Calgary-based oil and gas company cites gas prices, tax bills, court decision as it shuts down

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Junior oil and gasoline firm Trident Exploration Corp. says it’s ceasing operations and can flip over care of its four,700 wells to the Alberta Vitality Regulator.

In a information launch, the privately held Calgary-based firm says its abandonment and reclamation obligations are estimated to be $329 million and it doesn’t count on any monetary restoration for shareholders or unsecured collectors.

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It says it terminated 33 staff and 61 contractors on Tuesday.

Within the launch, the corporate blames its demise on low pure gasoline costs and excessive lease and property tax payments, together with capability constraints on TransCanada Corp.’s NGTL gasoline pipeline system.

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It says a restructuring and gross sales course of with its lenders failed attributable to points it linked to January’s Supreme Court docket of Canada choice on bancrupt Redwater Vitality.

The excessive court docket dominated that power corporations should fulfil their environmental obligations earlier than paying again collectors within the case of insolvency or chapter, overturning decrease court docket choices that had favoured chapter regulation over provincial environmental duties.

“As many have speculated and now we have now sadly confirmed, the Redwater choice has had the unintended consequence of intensifying Trident’s monetary misery and accelerating unfunded deserted nicely obligations,” the corporate acknowledged.

“With out regulatory collaboration and readability, Trident is unable to deal with its near-term liquidity wants and has no monetary capability to proceed working. We concern that many different corporations might falter with out clear, sound coverage making post-Redwater.”

On Wednesday night, the AER issued an announcement about Trident ceasing operations. You’ll be able to learn the assertion in its entirety under.

Trident Exploration Corp. has knowledgeable the Alberta Vitality Regulator (AER) that its lender has withdrawn funding from the corporate.

Due to this, Trident doesn’t have the funds to function its infrastructure or enter into creditor safety. In consequence, they’ve determined to stroll away, leaving greater than 4400 licensed websites, lots of them lively, with out an operator.

The AER has been working with Trident for a number of weeks to deal with considerations about its capability to proceed working to make sure that their property find yourself within the arms of accountable operators and that end-of-life obligations are addressed to the best extent attainable.

The AER’s mandate is to guard public security and the surroundings whereas making certain accountable power growth. Addressing end-of-life obligations is crucial to accountable power growth. The AER has a duty to uphold the Supreme Court docket of Canada’s ruling that monetary issues don’t have precedence over environmental duties.

On April 29, after Trident knowledgeable us that they have been going to stop operations, the AER ordered the corporate to correctly handle its roughly four,400 power licences by addressing end-of-life obligations by decommissioning its websites, posting monetary safety, or transferring the websites to accountable power corporations.

Nearly all of Trident’s operations are in pure gasoline, which has skilled weak costs for a number of years. Whereas we’re conscious of the troublesome market circumstances Trident has endured, we even have a duty to make sure that security and environmental necessities are being met.

On April 30, the AER was knowledgeable that, with out responding to our order or addressing their regulatory obligations, the administrators ceased operations, terminated staff and contractors, after which resigned.

The AER will make sure that the general public and the surroundings are protected and can assess any high-risk websites to make sure there aren’t any instant dangers.

If members of the general public have any security considerations with any Trident web site, they’re requested to contact the AER’s 24-hour grievance and emergency response line at 1-800-222-6514.

The AER will pursue all choices to make sure that Trident’s infrastructure is transferred to accountable operators, safely decommissioned, or, as a final resort, transferred to the Orphan Properly Affiliation.

A lot of Trident’s wells have been nonetheless working and, as soon as transferred to accountable operators, can nonetheless contribute to royalties, preserve Albertans working, and ship worth to our financial system.

The AER will assess all choices for attainable enforcement.

For extra info on the obligations of licensees when in insolvency or ceasing operations, click on right here.

–With recordsdata from World Information’ Phil Heidenreich

 

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