AER Bulletin 2014-11

AER Bulletin 2014-11: Licensee Liability Rating (LLR) Program Changes – Phase 2

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Licensee Liability Rating (LLR) Program Changes – Phase 2

Apr 10, 2014

Effective May 1, 2014, the AER is implementing the second phase of changes to the LLR Program as announced March 12, 2013, in ERCB Bulletin 2013-09: Licensee Liability Rating (LLR) Program Changes and Implementation Plan.

The goal of the changes is to increase the well abandonment liability costs and industry average netback to the 2012 values by May 1, 2015. In addition, other liability costs and parameters will also be updated so they are closer to actual values. After this time, the liability costs and parameters will be updated in accordance with Directive 011: Licensee Liability Rating (LLR) Program – Updated Industry Parameters and Liability Costs.

Phase 2 of the changes consists of updating Directive 011 as follows:

  • increasing the deemed well abandonment liabilities by an additional one-third towards the 2012 values,
  • increasing the deemed assets by an additional one-third towards the 2012 industry average netback,
  • increasing the facility abandonment cost parameter for each well equivalent from $10 000 to $17 000, and
  • increasing all existing regional reclamation liability costs by 25%.

The final phase of the changes is scheduled to occur May 1, 2015.

Directive 011 is available on the AER website, www.aer.ca. Printed copies of the directive can be purchased from AER Information Product Services, Suite 1000, 250 – 5 Street SW; telephone: 403-297-8311 or 1-855-297-8311 (toll free); fax: 403-297-7040; e-mail: infoservices@aer.ca.

 

<original signed by>

Kirk Bailey
Executive Vice President
Operations Division