On June 5, the Alberta Energy Regulator issued a corporate abandonment order to Tallahassee Exploration Inc., requiring the company to decommission its sites and submit and implement an approved reclamation plan.

The order comes in response to Tallahassee’s failure to comply with two previous orders issued in September and November 2023.

On September 15, 2023, the AER issued a reasonable care and measures (RCAM) order to Tallahassee, citing concerns about a lack of reasonable care and measures to prevent impairment or damage to its sites. Tallahassee was directed to ensure reasonable care and measures at all sites, address outstanding noncompliances, and submit plans, including an RCAM plan and an abandonment plan for mineral lease-expired wells.

Despite submitting plans, Tallahassee failed to fully comply with the September order. In response, on November 27, 2023, the AER rescinded the September order and issued a new RCAM, directing the Orphan Well Association (OWA) to ensure reasonable care and measures at all Tallahassee-licensed sites.

Tallahassee was required to comply with the terms of the November order, including providing a plan detailing how it planned to transition custody of its assets from the OWA, reimburse the OWA for costs incurred, come into compliance with the 2022 closure spend quota, and action the previously approved abandonment plan for mineral lease-expired wells.

Following Tallahassee’s submissions and failure to comply with certain requirements of the November order, Tallahassee has not demonstrated it is capable of providing reasonable care and measures to protect public safety and the environment and is unable to meet its regulatory and end-of-life obligations. Consequently, the OWA retains care and custody of Tallahassee’s sites, and Tallahassee must obtain approval from the OWA before accessing and commencing any decommissioning work on the sites. Tallahassee will remain the licensee of record.

Alberta’s oil and gas industry in 2022 spent $517.9 million (CAD 696 million) on cleanup, exceeding the $314 million (CAD 422 million) expenditure requirement by 65%, according to the 2022 Liability Management Performance Report by the AER.

According to the report, more than $0.89 billion (CAD 1.2 billion) was spent in total on closure and cleanup activities in 2022. The figure includes industry spend and closure activities funded by the Government of Alberta’s Site Rehabilitation Program (SRP) and the OWA.