Vertex Leadership Team and Corporate Outlook
Growing Regulatory & Environmental Requirements
Estimated Inactive Wells in Western Canada 1
Cumulative number of inactive wells
140,000
120,000
In 2005,
100,000
Saskatchewan
had 16,010
inactive wells
80,000
60,000
40,000
20,000
0
1999
2003
2007
2011
2015
2018
Sask.
25,857
B.C.
7,382
Alta.
89,217
Market Details 2,3,4,5,6
Alberta and British Columbia are developing regulations to
impose cleanup timelines while other jurisdictions are set to
impose higher security deposits to ensure wells with major
cleanup liabilities will be dealt with despite being transferred
to other E&P entities.
Costs for cleaning inactive wells by insolvent companies are
borne by industry partners. This has resulted in peer
monitoring to block deals in which the environmental liability is
unlikely to be properly dealt with.
AER estimates total liability associated with the cleanup of oil
and natural gas well sites, pipelines, and facilities is
approximately $30.9 billion.
Note: Saskatchewan only provided data for 2005 and 2018.
Number of Abandonments Completed by Vertex
2000
1500
1000
500
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Opportunity For Vertex
•
The market for abandonments and reclamations is
expected to continue to grow based on the
increased focus by governments, loans to the
orphan well association to expedite reclamation,
deposits required by the AER for distressed
companies, industry peer monitoring and a growing
number of inactive wells.
1. The Globe and Mail: In Western Canada, surge of inactive wells a brewing 'disaster' November 27, 2018
2. AER, OGC
3. Orphan Well Association, http://business.financialpost.com/commodities/energy/oil-industry-to-get-235-million-government-loan-to-help-clean-up-abandoned-wells, https://www.ctvnews.ca/business/defunct-oil-firm-leaves-behind-thousands-of-orphan-wells-in-alberta-1.3834743
11 4. https://keepcanadaworking.ca/facts
5. The Globe and Mail: "Hustle in the oil patch: Inside a looing financial and environmental crisis" November 26, 2018
6. The Globe and Mail: "Alberta vows to impose oil, gas well cleanup timelines on energy companies" November 27, 2018
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