Alberta Orphan Well Tally Jumps as Lexin Licences Suspended

Posted by Joseph Keefe

The Alberta Energy Regulator (AER) suspended licences
on all oil and gas well facilities and pipelines belonging to
Lexin Resources Ltd on Wednesday, nearly doubling the number of
orphaned wells in Canada's main crude-producing
province.

The provincial regulator ordered privately-held Lexin to cease
all production, saying it failed to comply with multiple orders
and lacked enough staff to manage its more than 1,600 sites.

Calgary-based Lexin also owes more than C$1 million to Alberta's
orphan fund and more than C$70 million in security for its
obligations to clean up its oil and gas facilities at the end of
their producing life.

"The AER has little confidence in Lexin's ability to conduct its
operations safely and is taking measures to prevent increasing
public safety, environmental, and financial risk," the regulator
said in a statement.

Alberta's Orphan Well Association (OWA) is responsible for
cleaning up wells that have no owners financially able to deal
with abandonment and decommissioning costs. It is overseen by the
AER and funded by levies from the oil and gas industry.

The enforcement action by the regulator means the 1,380 wells
belonging to Lexin are now the responsibility of the OWA, taking
the total numbers of ownerless wells awaiting clean up in Alberta
to 2,970.

Prior to Wednesday's order there were 1,590 orphan wells in
Alberta.

Reporting by Nia Williams

Feb 15, 2017

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