Buyer steps forward for Cameron Hills oil and gas project
Strategic Oil and Gas filed for creditor protection 6 months ago
It appears the Cameron Hills oil and gas project near the N.W.T.-Alberta border south of Kakisa is about to be sold.
The project is owned by Strategic Oil and Gas, which filed for creditor protection six months ago. According to the latest report of the monitor overseeing the restructuring plan for Strategic, part of that plan is selling the Cameron Hills project to Calgary-based Tallahassee Exploration Inc.
Strategic bought the Cameron Hills project from Paramount Resources in 2013. Just two years later, it halted operations at the oil and gas field. The field has been dormant ever since. The sprawling project includes wells, roads, camps, sumps, bridges, a processing plant, pipeline gathering system and other infrastructure.
Calls to Tallahassee and Strategic were not returned.
According to Tallahassee's website, the company specializes in acquiring undervalued oil and gas properties in western Canada. The privately owned, debt-free company owns 700 wells in northern and central Alberta and northeastern B.C. There is no indication how much Tallahassee is paying for the project.
Creditors are scheduled to meet in Calgary on Nov. 29 to vote on the restructuring plan.
It is unclear what, if any, effect, any sale of the Cameron Hills project will have on environmental liability associated with it.
The issue of the cleanup costs compared to the security posted for the project came up in the legislature in August. Frame Lake MLA Kevin O'Reilly pointed out that KPMG, the accounting firm handling the restructuring of Strategic, estimated that the company owed the N.W.T. government $12.4 million in "end of life" obligations associated with the Cameron Hills project.
In regulatory filings, Strategic says it posted $3.9 million in security for the project.
In an email, the territorial government said it does not know how KPMG came up with the $12.4 million figure and said it relies on regulators to determine what an appropriate security is for resource developments.
The process of determining that is ongoing. Strategic recently filed what it calls a revised "conceptual" closure and reclamation plan for Cameron Hills. It does not include an estimate of the cleanup costs.
An official with the territory's executive department said that it will attempt to ensure that the environmental obligations associated with the project will be fully met, but added that will ultimately be up to the courts to decide.
Commenting on the plan, the territory's Department of Environment and Natural Resources called for more detail and a new security estimate based on current liabilities at the site.
- An earlier version of this story said Cameron Hills was located near Fort Liard. In fact, the oil and gas project is located closer to Kakisa, N.W.T.Oct 09, 2019 9:33 AM CT