CALGARY, A.B. – The Alberta Orphan Well Association says it has taken the “unprecedented” step of having a receiver appointed to manage the oil and gas assets of failed Trident Exploration.
The industry association that takes care of wells in Alberta when the owner can’t or won’t says accounting firm PricewaterhouseCoopers has been appointed by a court to maintain the company’s roster of more than 4,400 wells, pipelines and other licensed oil and gas assets.
Private Calgary-based Trident abruptly stopped operations on Tuesday, posting a statement that said it had terminated 33 employees and 61 contractors and, with abandonment and reclamation obligations of about $329 million, didn’t expect any financial recovery for shareholders or unsecured creditors.
It 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.
It says a restructuring and sales process with its lenders failed due to issues it linked to a Supreme Court of Canada decision in January that found energy companies must fulfil their environmental obligations before paying back creditors in the case of insolvency or bankruptcy.
OWA says in a news release the shutdown came after Trident and its lenders were unable to find a workable solution with the Alberta Energy Regulator to safely transfer its assets to a responsible operator.
“This is an unprecedented step for the OWA as normally the company or its creditors would clean up its sites or appoint an insolvency professional to help transition the licensed assets, where possible, to other parties,” the association said in a release.
“In this case, the OWA has no other choice but to take this step to ensure that Trident’s assets are managed and maintained safely for the benefit of the public, and where possible, placed in the hands of responsible operators.”