Orphan Fund Levy
The AER announced that, in accordance with Part 11 of the Oil and Gas Conservation Act, the AER will prescribe an orphan fund levy in the amount of $15 million.
The Bulletin notes that the Orphan Well Association, along with the Canadian Association of Petroleum Producers and the Explorers and Producers Association of Canada have approved a $30 million orphan fund levy to fund the Orphan Well Association’s budget for the 2016/17 fiscal year.
The first instalment of the orphan fund levy will be $15 million in March 2016, and the second instalment will also be $15 million in August or September 2016.
Allocation of the orphan fund levy among licensees will be as follows:
Levy = A / B x $15,000,00
Where A is the licencee’s deemed liabilities on February 6, 2016 included within the Licensee Liability Rating and Oilfield Waste Liability programs, and where B is the sum of the industry’s deemed liabilities on February 6, 2016 under the same programs.
An orphan fund levy invoice will be sent to each licensee’s chief financial officer via e-mail by March 23, 2016. Licensee’s who do not receive a copy of their orphan fund levy by March 28, 2016 must request a copy from the AER.
All orphan fund levy invoices must be paid by April 25, 2016. All appeals of orphan fund levy amounts must also be received by the AER by April 25, 2016.
