Plans for closure of 43 wells in Cameron Hills continue

A once-major producer of gas in the territory, Strategic Oil and Gas Ltd, entered receivership earlier this year after being under creditor protection for 10 months.

The Alberta-based company went into receivership in February. It had repaired and suspended 43 oil wells and a pipeline catchment system at the Cameron Hills production area in the South Slave by an April deadline issued by the territorial government.

A suspended well is a well that hasn’t produced for a while and is safely secured, but could feasibly enter production again. Abandoned wells have been permanently sealed, and mean the site can enter the reclamation stage.

There was some concern, back in February, that the failing company wouldn’t hit deadlines for work that needed to be done to close its I 73 well by the April deadline that then minister Louis Sebert had set for the company in October 2019, reported the CBC. That well had previously been fitted with scrubbers to deal with leaking hydrogen sulfide [sour gas] – which is a poisonous gas, and can cause breathing difficulties.

But Pauline de Jong, the new regulator for the Office of the Regulator of Oil and Gas Operations (Orogo), confirmed the deadline to repair and suspend the wells had been met.

“The vast majority were suspended before the regulator’s order was issued in October 2019. Strategic only repaired and suspended three wells during the 2020 winter season, the three that were subject to the April deadline in the order,” said de Jong in an email.

“At this point Strategic is in compliance with the requirements of the order. They’re also then in compliance with the requirements of the legislation and the guidelines.”

“The next big deadline that’s coming up are the group of [23] wells that needs to be abandoned by January 31, 2023,” said de Jong.

Strategic is required to provide the regulator with a plan for the remaining suspension and abandonment of the remaining wells and closure of the pipeline gathering system. de Jong said that plan will have to be put forward prior to the regulator’s approval.

Strategic responsible for costs of cleaning site

Costs to remediate the Cameron Hills site are the responsibility of Strategic Oil and Gas, said Toni Riley, spokesperson for the Department of Lands.

“Strategic Oil and Gas has posted, and the Government of the Northwest Territories has accepted, the full amount of security required under its land use permit and water licenses,” said Riley. “In addition to the securities held by Orogo, the GNWT currently holds a total of $2,909,880 in land and water reclamation securities: $1,309,880 under the water license and $1,600,000 under land use permit.”

The obligations for the site’s end of life are updated periodically, said Riley, and those are overseen by Strategic’s receiver, Alvarez & Marsal Canada Incorporated.

“The receiver is in charge of managing the day to day affairs of Strategic in the NWT, including its obligations related to land and water authorizations. 

“Strategic’s land use permit for the Cameron Hills operations expires in September 2020. It is expected that the receiver will be engaging with the board on the permit, including consideration of the securities.”

Correction: August 14, 2020 – 13:54 MT. An initial version of this story incorrectly stated 40 oil wells had been suspended at the Cameron Hills site. It has been corrected to 43 oil wells.