Section 106 of Oil and Gas Conservation Act – Enforcement
In this letter to Mr. Currie, the AER provided its reasons for issuing a deceleration under section 106(1) of the Oil and Gas Conservation Act (the “OGCA”), naming Donald Allen Currie as a person in direct or indirect control of Sabanero Energy Corporation (“Sabanero”), a company that contravened or failed to comply with AER orders and has a debt owing to the AER.
Declaration under Section 106 of the OGCA
The AER explained that OGCA section 106 applies where the AER considers it in the public interest to make a declaration naming one or more directors, officers, agents, or other persons who, in the AER’s opinion, were directly or indirectly in control of a licensee, approval holder, or working interest participant that has (i) contravened or failed to comply with an order of the AER; or (ii) has an outstanding debt to the AER, or to the AER to the account of the orphan fund, in respect of suspension, abandonment, or reclamation costs.
AER Findings
The AER found that:
(a) Sabanero held 58 well licenses, 3 facility licenses and 10 pipeline licenses, many of which had been orphaned due to noncompliances;
(b) Sabanero failed to comply, or even attempt to comply, with AER orders including:
(i) a December 22, 2015 Order regarding a pipeline failure;
(ii) Closure/Abandonment, issued after Sabanero did not pay its required security deposit of over $1.7 million; and
(iii) an Environmental Protection Order, requiring reclamation and remediation;
(c) Saberno owed $14,628.90 to the AER in outstanding levy fees;
(d) Many of Sabanero’s licences had been designated as orphan for purposes of abandonment, as Sabanero effectively abdicated any responsibility for them; and
(e) as the director of Sabanero at the time of the company’s noncompliances and nonpayment of debts owing to the AER, Donald Allen Currie was and is a person in control of Sabanero.
The AER stated that Sabanero’s ongoing failure to comply with AER requirements demonstrated a blatant disregard for the regulatory regime. Further, failure to pay amounts owing to the AER and abandon and reclaim facilities left a substantial weight on the already over-burdened Orphan Well Association.
The AER found that Sabanero’s actions and inactions undermined the regulatory system and posed an unacceptable risk to public safety and the environment.
The AER concluded that issuing a declaration was necessary to deter future noncompliances and uphold the credibility of the regulatory system and AER enforcement processes.
