Ranch Energy failure more than doubles B.C.’s inventory of orphan wells

Ranch Energy failure more than doubles B.C.’s inventory of orphan wells

CALGARY — The number of orphan wells in British Columbia has more than doubled thanks to the failure of one oil and gas company.

The BC Oil and Gas Commission says it has designated 401 wells and three facilities formerly owned by Calgary-based Ranch Energy Corp. as orphans, which means there is no owner willing or able to restore those sites.

It says it has booked a liability of about $53 million as a result, offset by $13.7 million in security that will be transferred to the industry-funded Orphan Site Reclamation Fund.

“The addition of the 404 Ranch sites means the commission is now responsible for 770 orphan sites in B.C. — though 56 sites are substantially restored — which is less than three per cent of all oil and gas wells in B.C.,” the provincial agency said in a news release.

“The rest are in the care and control of viable companies. We will continue working with landowners impacted by the Ranch decision.”

Ranch slipped into receivership in July 2018. Last Friday, the Court of Queen’s Bench of Alberta approved a transaction under which 414 oil and gas sites owned by Ranch were sold to Erikson National Energy Inc.

The commission says it will carry out site clean-up and restoration on the remaining Ranch assets through the orphan reclamation fund.

It says it has already permanently plugged (abandoned) 11 wells and partially drained a storage pond to ensure public safety during the Ranch Energy legal proceedings.

B.C.’s list of orphan wells, most located in the northeastern part of the province, is dwarfed by Alberta’s, which contains about 3,000 orphan wells slated for reclamation and abandonment and another 3,000 oil and gas sites for reclamation only.

In April, the federal government announced a $1.7-billion program to help Alberta, Saskatchewan and B.C. clean up inactive wells, as well as orphan wells.

B.C. received $120 million, of which the orphan well fund was to receive $15 million. It hopes to clean up 2,000 of its 7,000 dormant wells over two years.

The B.C. orphan program is budgeted to spend more than $27 million on cleanup activities during the current fiscal year, the commission said.

This report by The Canadian Press was first published June 19, 2020.

The Canadian Press

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