On March 30, 2023, the Alberta Energy Regulator (AER) issued a Demand Letter to AlphaBow Energy Ltd. requiring the company meet a number of demands in order to maintain their licenses.
These demands follow a letter issued in July 2022 suggesting that AlphaBow Energy posed an unreasonable risk and their license eligibility was limited. This was due, in part, to a below industry average field compliance rating with a failure to meet outstanding debts including municipal taxes and surface lease payments to landowners. It is estimated that field compliance has slipped from 76% satisfactory in 2019 to a dismal 42% satisfactory in 2023.
So far in 2023, Alphabow Energy has informed the AER that they would be unable to complete their mediation plan due to lack of resources and funds and that no ground water monitoring was done in 2022 at a number of contaminated sites. They have also been unwilling to submit quarterly financial statements and proof of insurance as well as a number of other regulatory documents.
The AER states that AlphaBow Energy does not have the capability to meet it’s regulatory and liability obligations.
AlphaBow Energy currently sits with approximately $153 million in estimated inactive liability across the province, which is equal to approximately 58% of AlphaBow’s total liability. The demand states that the company is in high financial distress with high liability magnitude. The AER states that AlphaBow Energy does not have the capability to meet it’s regulatory and liability obligations.
In order to reach compliance, the company must complete a number of detailed tasks including submission of a Reasonable Care and Measures Plan, an Abandonment Plan, proof of insurance, maintenance of staff in control of sites and they must post a security deposit for over $15 Million to offset 10% of the estimated costs of abandonment and reclamation. All of this is to be done by April 30, 2023.
What Does this Mean for Alberta Landowners with AlphaBow Energy leases?
We estimate that AlphaBow Energy has in excess of 2600 leases across Alberta. Unfortunately, for landowners this means that the few lease payments that were being paid are probably not going to continue and lease sites will not be maintained by the operator. Year over year, the loss of these payments adds up and affects the bottom line of farmers and ranchers. Not to mention being responsible for weed control and continuing to have to work around unpaid leases.
We estimate that AlphaBow Energy has in excess of 2600 leases across Alberta.
Fortunately there is a way to claim lost payments. The Alberta Government runs a rental recovery program through the Land and Property Rights Tribunal. Once an application for rental recovery has been processed, the landowner generally receives 100% of their claim from the province’s general revenue fund. Claims can be made retroactively although applying for more than 5 years at once makes a file considered complicated and adds to the amount of time needed for a decision.
How Do I Make a Claim?
Claims are made through the Land & Property Rights Tribunal online portal. Applications must include proof of the original lease date, payment amount and the condition of the leased area. It is preferred if a copy of the lease and plan are also attached to the application.
Some landowners choose to complete applications on their own while others seek out a service to provide advice and help them with this tedious process.
Some landowners choose to complete applications on their own while others seek out a service to provide advice and help them with this tedious process. Agri-Energy Partners Ltd. runs a program called Surface Lease Rental Recovery Partner (SLLRP)
where we help landowners to complete these applications, track their files and complete amendments and repeat applications as necessary.
We have built a customized database to house all of our claim information and have staff dedicated strictly to rental recovery. Each staff member is skilled in using the Government’s online portal, knows how to complete an application correctly and has positive working relationships with LPRT staff. The use of our database ensures amendments and repeat applications for subsequent years are completed on time. Wait times can be lengthy. It is our goal to ensure clients don’t wait longer than needed for their payments.
Between the months of November 2022 and March 2023, we have seen our clients paid over $700,000 for AlphaBow Energy claims and are nearing the $1 Million mark paid to our rental recovery clients overall in the same time period.
To date, we have completed nearly 900 AlphaBow Energy claim applications. This number continues to grow as landowners become frustrated with non-payment. These applications represent approximately $2.7 Million in lost revenue to landowners. Between the months of November 2022 and March 2023, we have seen our clients paid over $700,000 for AlphaBow Energy claims and are nearing the $1 Million mark paid to our rental recovery clients overall in the same time period. Our best guess is that Alberta Landowners will be owed over $7 Million by AlphaBow Energy by the end of 2023. That is a staggering number that will compound year over year.
If you have missed lease payments from AlphaBow Energy or another oil and gas operator and would like more information on how to apply for your lost revenue, please reach out to us at rentalrecovery@AgriEnergy.ca or call 1-855-871-0306.
Heidi Burzinski
Manager, Operations