Trident Exploration, which had an office in Rumsey announced on April 30 it has ceased operations.
The company issued a press release stating its 33 employees and 61 contractors have been terminated and 4,700 wells are being transitioned into the care of the Alberta Energy Regulator.
“We had been working openly and collaboratively with our lenders and the Alberta Energy Regulator (“AER”) since February. The combination of extremely low natural gas prices and high surface lease and property tax payments (totaling $0.72 C$/GJ) has exhausted the liquidity of the company,” the company stated in a press release.
“Alberta has no mechanism to allow a struggling energy company such as Trident to address its inflated surface lease and property tax obligations,” it also stated.
Reeve of Starland County Steve Wannstrom is concerned about the major company closing its doors. He said between Drumheller and Stettler there were approximately 30 employees, including 5 at the Rumsey office and contractors. He has learned operators have been told they were not going to be paid for the month of April. A number of operators took it upon themselves to shut down wells that were concerning.
One major concern for Wannstrom is Trident has an outstanding tax bill from last year of about $3 million and about the same amount for this year.
See complete statement from Reeve Steve Wannstrom and Starland County Council on page 4.
In Trident’s release, it stated “Trident’s total estimated abandonment and reclamation obligations are approximately $329 million. Behind these obligations, we do not anticipate any recovery for shareholders and unsecured creditors. Likewise, any recovery for secured lenders is highly uncertain.”
Trident also references the Redwater decision, which ensured environmental cleanup costs will get priority, over creditors when companies go bankrupt, saying it has exacerbated the situation.
“The Redwater decision has had the unintended consequence of intensifying Trident’s financial distress and accelerating unfunded abandoned well obligations. Without regulatory collaboration and clarity, Trident is unable to address its near-term liquidity needs and has no financial ability to continue operating.
“We fear that many other companies may falter without clear, sound policy making post-Redwater. In the face of this extended uncertainty, lenders and investors may flee Canada and further job losses will occur. Without access to financing, we expect that the Orphaned Well Association may grow exponentially.”
