Bulletin – Orphan Well Association – Orphan Well Levy
In accordance with Part 11 of the Oil and Gas Conservation Act, the AER announced that it prescribed, by regulation, an orphan fund levy in the amount of $15 million.
The Orphan Well Association (“OWA”), Canadian Association of Petroleum Producers (“CAPP”), and Explorers and Producers Association of Canada (“EPAC”) had previously approved a $30 million orphan fund levy to fund the OWA budget for its 2016/2017 fiscal year. The approved levy is to be collected through two separate levies. The AER collected the initial $15 million levy in April 2016.
In this bulletin, the AER announced that the second half of the levy will be allocated among licensees and approval holders included in the Licensee Liability Rating (“LLR”) and Oilfield Waste Liability (“OWL”) programs based on the August 2016 monthly assessment.
Each licensee or approval holder will be invoiced for its proportionate share of the orphan fund levy in accordance with the formula:
Levy = A/B x $15 000 000;
where:
• A is the licensee’s or approval holder’s deemed liabilities on August 6, 2016 for all facilities included within the LLR and OWL programs; and
• B is the sum of the industry’s deemed liabilities for all facilities included within the LLR and OWL programs.
Payment and Appeal Due Dates
Orphan fund levy invoices were e-mailed on or before August 11, 2016. The bulletin states that all orphan fund levy invoices must be paid and payment must be received by the AER by September 12, 2016.
Any appeal of invoiced amounts was to be made in writing by September 12, 2016.
