Alberta company ordered to abandon wells following months of regulatory failures
A Calgary-based company, Revitalize Energy Inc., has recently lost the right to manage its own well sites in Alberta after the provincial regulator deemed the operations to pose a safety risk. The Alberta Energy Regulator has ordered the company to suspend operations due to ongoing financial distress and a failure to comply with previous orders.
As a result, the Orphan Well Association (OWA) has stepped in to assume control of Revitalize Energy Inc.’s operations. The OWA, an industry-funded agency responsible for cleaning up abandoned or ownerless wells in Alberta, will now ensure that over 200 wells and pipelines are safely shut down. This intervention comes after the regulator determined that Revitalize Energy Inc. could not be relied upon to maintain its wells safely.
Lars De Pauw, the president of OWA, highlighted the importance of ensuring that these sites are put into a safe condition. He noted that Revitalize Energy Inc. had failed to take the necessary actions to maintain its assets, leading to the intervention by the association.
The AER order dated Nov. 14 outlined the company’s failure to safely suspend wells and pipelines, along with its inability to operate properly due to cash flow issues. The company, which operates in Alberta and Saskatchewan, has been the subject of multiple AER orders and has been on a sanction status since last November.
Despite efforts to recapitalize the company, Revitalize Energy Inc. faced financial struggles, with operators reporting unpaid wages and the company ultimately stating that financing was no longer available. This financial turmoil led to the company being unable to comply with regulatory requirements, prompting the AER to issue the order to suspend operations.
De Pauw emphasized that the sites under OWA’s care are not technically abandoned, as the company still exists and is expected to reimburse the association for its services. However, he noted that it can take years for neglected sites to become officially abandoned after a company collapses.
The intervention by OWA underscores the importance of ensuring the safe management of well sites in Alberta. With the association now overseeing the shutdown of Revitalize Energy Inc.’s operations, steps are being taken to mitigate the risks posed by the company’s inability to maintain its assets. This case serves as a reminder of the challenges faced by companies in the oil and gas industry and the importance of regulatory compliance to ensure the safety of workers and the environment.
