The Ministry of Energy and Resources has the ability to use the orphan fund to reimburse working interest participants (WIP) for a defunct licensee's share of the facility decommissioning, well abandonment, and related well and facility site reclamation costs under The Oil and Gas Conservation Regulations, 2012.
For the purposes of reimbursement consideration, a licensee is considered defunct when they:
- do not exist;
- cannot be located; or
- do not have the financial means to contribute to the costs of meeting the obligations pursuant to The Oil and Gas Conservation Act.
A WIP may apply to the ministry for reimbursement of the defunct licensee's proportionate share of abandonment, decommissioning or reclamation costs incurred on behalf of a defunct licensee when the abandonment or reclamation work is complete.
The submission of an application does not guarantee that the defunct licensee's share in the costs will be reimbursed. The ministry reserves the right to approve or deny the request based on the evidence provided by the WIP as to whether the costs are, in the opinion of the minister, reasonable and necessary to have completed the work.
Before submitting a Request for Reimbursement of a defunct licensee's WIP cost, you must:
- Confirm the licensee that you are seeking reimbursement for has been deemed as orphan in Saskatchewan.
- Have evidence of the working interest (participant name and percentage) for the given well and/or facility licences reimbursement is being requested for.
- Have completed the abandonment and/or reclamation work in accordance with the ministry's requirements. Note that:
- Abandonment is considered complete when the well is cut and capped, or the facility has been decommissioned and IRIS has been updated to reflect this.
- Reclamation is considered complete when the well or facility site has received an Acknowledgement of Reclamation approval from the ministry.
How to Apply
To apply for reimbursement of a defunct licensee's WIP costs:
- Ensure all eligibility criteria are met.
- Prepare an Invoice Package which includes the following supporting documents:
- A detailed breakdown of the costs incurred to complete the abandonment, decommissioning or reclamation work for the given licence;
- All associated invoices (which identify the well or facility licence) for work performed; and
- A summary of any salvage revenue.
- Prepare a Working Interest Package which includes the following supporting documents:
- Complete list of working interest percentages of each licensed entity held by the defunct licensee for which reimbursement is being requested and totaling 100 per cent;
- A copy of the executed working interest agreement;
- Complete list of directors and officers within both corporations (WIP and defunct licensee);
- A summary of the steps taken to collect the costs from the defunct licensee; and
- Any other relevant information.
- Prepare a letter making a request for reimbursement which summarizes the important details from the supporting documents (prepared in steps 2 and 3 above), such as:
- Defunct licensee's full corporate name;
- Confirmation that the defunct licensee has no relation to the WIP who is applying for reimbursement (i.e. no common directors or officers);
- Summary of the well or facility licence and the associated working interest (participant and percentage); and
- Total amount of reimbursement being requested for the abandonment, decommissioning and/or reclamation costs incurred.
- Attach the letter, invoice package and working interest package as separate PDF documents (no security applied and pages orientated to be read on a computer screen) and email to ER.Servicedesk@gov.sk.ca with subject line "Reimbursement of a Defunct Licensee’s WIP Costs."
If all eligibility criteria are met and the ministry is in agreement that the reimbursement is warranted, the WIP will be contacted via email to arrange payment.
Complete and attach the application.
Submit your application now