Bulletin – Orphan Fund Levy
The AER announced the collection of the second orphan levy of $15 million to fully fund the Orphan Well Association’s approved budget of $30 million. The first instalment of the Orphan Fund Levy, which is collected pursuant to Part 11 of the Oil and Gas Conservation Act, was collected in March 2015 by the AER. The AER calculates a licensee’s share of the Orphan Fund Levy with reference to Directive 006: Licensee Liability Rating (“LLR”) Program and Licence Transfer Process; Directive 011: LLR Program – Updated Industry Parameters and Liability Costs; and Directive 075: Oilfield Waste Liability Program as follows:
Levy = A/B x $15,000,000
“A” is equal to the licensee’s deemed liabilities as of August 1, 2015 pursuant to the above LLR programs. “B” is equal to the sum of the industry’s deemed liabilities as of August 1, 2015 pursuant to the above LLR programs.
Orphan Fund Levy invoices were mailed out on August 6, 2015. The bulletin notes that payment of the same to the AER is due no later than September 7, 2015 or a 20 percent penalty will be applied along with an issuance of a Notice of Low Risk Noncompliance in accordance with Directive 019: Compliance Assurance. Any licensees appealing the Orphan Fund Levy must do so by September 7, 2015.
