Xfuels Inc (XFLS): How a Well becomes an Orphan and How it...

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TheGuy87

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Friday, 02/12/2021 11:37:09 PM

Friday, February 12, 2021 11:37:09 PM

How a Well becomes an Orphan and How it Relates to XFLS
https://www.orphanwell.ca/about/orphan-inventory/

Wells, pipelines, and facilities are plugged and decommissioned (“abandoned”) when companies decide to stop using them for oil and gas development. In Alberta, companies are responsible for cleaning up their sites when the sites have reached the end of their productive life and returning the land to a natural state (known as “reclamation”). Doing this job properly is often costly.

If a company goes bankrupt before properly decommissioning its wells, facilities, or pipelines, and reclaiming the associated sites, we take action. We will order anyone who owned a part of the site—known as a “working interest participant”—to carry out this work to properly close the project.

If there is no legally responsible party, we designate the wells, facilities, pipelines, and associated sites as “orphaned.” The Orphan Well Association (OWA)—an industry-funded nonprofit organization established in the 1990s—takes over to decommission these wells, facilities, and pipelines, and reclaim the land. The OWA helps to protect Albertans from footing the bill.

Orphan Wells in Alberta for decommissioning

Orphan Wells in Alberta for Reclamation

Approved Reclaims

SRP (Site Rehabilitation Program)
The Site Rehabilitation Program – which provides grant funding to oil field service companies to do closure work on oil and gas sites in Alberta – launched on May 1, 2020. It is vital in achieving one of government’s top priorities, by helping get thousands of Albertans back to work. This program is expected to generate almost 5,300 direct jobs and lead to indirect employment – and economic benefits – across the province, as other businesses will benefit from the increased closure work occurring in many rural areas across the province.

Tens of thousands of applications have been received and staff are working diligently to review all applications, evaluate project contracts, and process grant funding payments in order to get as many Albertans back to work as soon as possible.

We are in the process of notifying successful and unsuccessful applicants of the status of their grant application. Applicants who are not successful are encouraged to apply in coming application periods, where $800 million is still to be awarded through the program.