Bulletin – Insolvency – Licensee Obligations
The AER released Bulletin 2016-10 to remind its licensees of statutory responsibilities when ceasing operations, whether due to insolvency or other reasons.
The AER noted that licensees remain responsible for complying with all AER requirements, including:
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Ensuring continued care and custody of all AER-licensed properties;
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Responding to any incidents or complaints;
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Maintaining records of AER-licensed properties in accordance with AER requirements; and
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Either obtaining approval from the AER under Directive 006: Licensee Liability Rating Program and
Licensee Transfer Process to transfer licenses, approvals, and permits to an eligible party with a Liability Management Rating of at least 1.0 post-license transfer; or completing abandonment and reclamation of all sites in accordance with AER requirements; or posting applicable security under Directive 006.
The AER further noted that failures to comply may result in the AER pursuing enforcement action against the licensee, which may include naming individual directors and/or officers of the licensee under section 106 of the Oil and Gas Conservation Act.
The AER also reminded licensees that no licensee or its creditors may remove equipment from a site for any purpose without the AER’s consent, including during the conduct of abandonment or reclamation work. The AER noted that any debts owed to the AER by a licensee are also subject to a lien by the AER which takes priority over all other liens, charges, rights of set-off, mortgages and any other security interests pursuant to section 103 of the Oil and Gas Conservation Act. A lien by the AER applies to a licensee’s interest in any wells, facilities and pipelines, and land or interests in land, including mines and minerals, equipment, and petroleum substances.
