Archives for May 2, 2019

Calgary-based company says abandonment and reclamation obligations estimated at $329 million

The Alberta Energy Regulator says junior gas company Trident Exploration Corp. shut down abruptly Tuesday without responding to an order to properly manage its 4,700 wells — adding to the more than 3,000 orphan wells already awaiting remediation in the province.

Trident terminated 33 employees and 61 contractors on Tuesday, the company said in a news release.

The privately held Calgary-based company said its abandonment and reclamation obligations are estimated to be $329 million and it doesn’t expect any financial recovery for shareholders or unsecured creditors.

Regulator was working with company for weeks

The Alberta Energy Regulator said it’s been working with Trident for weeks to ensure the company’s assets end up with “responsible operators” and that end-of-life obligations for wells are addressed.

 On Monday, Trident told the regulator it would be closing, so the AER ordered the company to decommission sites, post financial security or transfer the sites to other energy companies

But on Tuesday, the AER said Trident’s directors ceased operations, terminated employees and then resigned — without responding to the order or addressing any regulatory obligations. 

“Trident does not have the funds to operate its infrastructure or enter into creditor protection. As a result, they have decided to walk away, leaving more than 4,400 licensed sites, many of them active, without an operator,” the regulator said in an emailed release.

‘Concerning’ situation

AER spokesperson CaraTobin said most companies they work with are able to come to an outcome that works for all parties, but this was not one of those situations.

“We are still working on our options,” said Tobin. “Generally speaking, yes, a situation like this is concerning.”

The company blamed its demise on low natural gas prices and high lease and property tax bills, along with capacity constraints on TransCanada Corp.’s NGTL gas pipeline system in the release.

The AER acknowledged natural gas has experienced weak prices, but said that doesn’t erase the company’s obligations.

“While we are aware of the difficult market conditions Trident has endured, we also have a responsibility to ensure that safety and environmental requirements are being met,” the AER said.

Trident also said a restructuring and sales process with its lenders failed due to issues it linked to January’s Supreme Court of Canada decision on insolvent Redwater Energy.

The high court ruled energy companies must fulfil environmental obligations before paying back creditors in the case of insolvency or bankruptcy, overturning lower court decisions that had favoured bankruptcy law over provincial environmental responsibilities.

“As many have speculated and we have now unfortunately proven, the Redwater decision has had the unintended consequence of intensifying Trident’s financial distress and accelerating unfunded abandoned well obligations,” the company stated.

“Without regulatory collaboration and clarity, Trident is unable to address its near-term liquidity needs and has no financial ability to continue operating. We fear that many other companies may falter without clear, sound policy making post-Redwater.”

The AER said it has a responsibility to uphold the Supreme Court’s “ruling that financial matters do not have priority over environmental responsibilities.”

The regulator said it will assess high-risk sites to ensure they don’t pose immediate hazards and will make sure both the public and the environment are protected from Trident’s sites.

Transferring wells to the Orphan Well Association will be a “last resort,” the AER said, adding that it will aim to transfer many of the wells to other companies to keep them working and contributing royalties to Alberta’s economy.

At the end of 2018, nearly 90,000 wells were sitting idle in Alberta and under current rules, they can continue to do so as long as lease payments are being made to the landowner.

The AER said any member of the public who has a safety concern about the Trident sites should call the 24-hour complaint and emergency response line at 1-800-222-6514. 

More than half of working British Columbians admit putting their career ahead of their health and family, a new poll by Research Co. reveals.

The online survey of more than 600 respondents found 53% of employed British Columbians say their work is “definitely” (23%) or “probably” (30%) taking precedence over lifestyle.

One third (33%) claim to have a perfect work/life balance, while only 12% say their lifestyle takes precedence over work.

Almost half (47%) acknowledged having to stay late after work in the past six months, while about three-in-10 missed a family gathering or other leisure activity because of their job.

One-in-four (25%) had to take a work-related call while they with family or friends, while 24% had to work from home on a weekend or at night (21%).

“There is a staggering age gap when it comes to work getting in the way of the lifestyle of British Columbians,” says Research Co. president Mario Canseco. “While 44% of those aged 55 and over say they did not experience any off-work interruptions, the proportion drops to 26% for those aged 35-to-54 and just 15% for those aged 18-to-34.”

More than two-in-five (42%) say their work has put a strain on their relationships.

B.C. lumber company Canfor Corp. reported a loss in its most recent quarter compared with a profit a year ago as revenue fell.

The forestry company says it lost $89.5 million or 71 cents per diluted share for the three months ended March 31.

That compared with a profit of $112.2 million or 87 cents per diluted share in the same quarter last year.

Sales for the first three months of 2019 amounted to $1.15 billion, down from $1.23 billion for the first three months of 2018.

On an adjusted basis, Canfor says it lost $36.8 million or 29 cents per diluted share for the quarter compared with an adjusted profit of $145.4 million or $1.13 per diluted share a year earlier.

On Monday, Canfor temporarily curtailed operations at its B.C. lumber mills due to low prices and the high cost of fibre. The curtailment is expected to reduce Canfor’s production output by approximately 100 million board feet.

“While our B.C. based lumber business experienced significant challenges due to lower than anticipated market prices and difficult operating conditions, our U.S. South and European operations generated solid financial returns,” Canfor chief executive Don Kayne, said in a statement.

“We look forward to adding a further 200 million board feet to our U.S. South operations during the second quarter with the upcoming close of the Elliott acquisition, which will help offset the escalating log cost and fibre supply issues impacting our B.C. operations.”

Canada’s biggest banks are marking the official launch of a new digital identity network called Verified.Me, following years of development with their partner SecureKey Technologies Inc. of Toronto.

The banks see Verified.Me as the beginning of a more secure Canadian identity system for a world where technology is making it easier for criminals to steal personal data and create false identities.

In essence, the Verified.Me smartphone app will connect with the financial institutions and remove many of the steps that are currently required to apply for financial services and government documents.

However, they are taking baby steps and initially offering only a limited selection of products from Sun Life Financial and Equifax through the participating institutions.

CIBC, Desjardins, RBC, Scotiabank and TD say they’ll have Verified.Me running immediately while BMO Bank of Montreal and the National Bank of Canada are to join the network in the future.

SecureKey chief executive Greg Wolfond says the longer-term goal is to have Verified.Me used by a wide range of businesses and government agencies such as the Canada Revenue Agency.