Calgary-based Houston Oil & Gas ceases operations, withdrawal roughly 1,300 wells wanting cleanup

Another Alberta oil and gas association has sealed a doors, withdrawal some-more than $80 million in estimated costs to purify adult a remaining wells, pipelines and facilities.

Calgary-based Houston Oil Gas told a Alberta Energy Regulator (AER) final month that it was ceasing operations and no longer has any employees, according to justice documents. Houston entered receivership final week.

The association is focused essentially in southeast Alberta and essentially produces healthy gas, according to a web site.

“I feel bad for them,” pronounced Marc Raedschelders, who has a Houston healthy gas good on his skill nearby Pincher Creek in a southwest dilemma of a province. 

Raedschelders said he’s not astounded a association is no longer operating, given Houston’s aspect rights payments to him were mostly delayed. He’s uncertain either a good on his skill will be sole to a opposite association or be decommissioned.

“I don’t know what my options are,” he said.

Houston has 1,264 wells, 41 comforts and 251 pipelines, according to documents.

The justice papers contend some of a wells have already been eliminated to a Orphan Well Association (OWA) to be decommissioned. The OWA is an industry-funded classification that cleans adult aged oil and gas infrastructure when companies go bankrupt and a resources can't be sold.

“If all of Houston’s wells are eventually designated as orphans, a waif register of wells requiring [decommissioning] will boost by scarcely 30 per cent,” according to a justice acquiescence by a OWA. In that event, a AER estimates a cost tab at $81.5 million. 

Houston is a latest oil and gas association in Alberta to fail. 

Last month, Bellatrix Exploration entered creditor insurance and is still looking for a buyer.

In May, Trident Exploration close down, that put 94 people out of work and left approximately 3,650 wells though an owner.

While there is no central list of how many firms have announced failure given a oil cost pile-up in late 2014, many others have announced bankruptcy or entered creditor protection. 

Some tiny and mid-sized companies are faring improved than others, according to Patrick O’Rourke, an researcher with Calgary-based AltaCorp Capital.

“Everybody is confronting headwinds here on a series of fronts,” he said, indicating to “lower collateral flows, less investor seductiveness and weaker prices.”

Big or small, a some-more successful companies are focused on oil properties or healthy gas wells that are “liquid,” meaning they also furnish aloft valued line such as ethane, propane, butane, isobutane, and pentane.

Companies essentially focused only on healthy gas, seem to onslaught a most.

“Gas prices have been intensely challenging, privately in Alberta,” pronounced O’Rourke. “We’ve seen some strengthening in Oct with low storage levels and a continue out a window here being flattering cold, though generally, a producers who have followed that liquids plan have fared improved than some youth gas producers.”

According to Houston’s web site, a association shaped in 2002 and began prolongation in 2015.

“Houston Oil Gas Ltd. is indifferent in a government of a end-of-life liabilities. The association invests on a monthly basis, addressing a down hole abandonment of wells, decommissioning of facilities, infrastructure and reclamation of wells that are non-productive,” according to a web site.

Hardie and Kelly Inc. has been allocated to safeguard Houston’s wells are scrupulously confirmed and to demeanour at possibly offered some of a assets.

Article source: https://www.cbc.ca/news/business/houston-calgary-oilpatch-orphan-wells-1.5348828?cmp=rss