The Abbey Resources Corporation has gone bankrupt and here’s what you need to know about it:
The Abbey Resources Corporation is a natural gas production company that holds properties in southwestern Saskatchewan. More specifically, its properties are located on Carry the Kettle First Nation, Crown, and freehold lands. The company produces natural gas from the late Cretaceous Milk River, the Medicine Hat and Colorado formations.
Last 2016, the company purchased 2,200 unusable gas wells for 10 dollars from Husky and Enerplus, which seemed like a viable investment at the time. The companies only provided the Abbey Resources Corporation 800,000 dollars each for the possible ramifications of owning the said wells. The Saskatchewan province also ordered the two companies to pay 27 million dollars on behalf of the Abbey Resource Corporation for the wells’ end of life costs. As time passed, the repercussions of owning the said wells dawned on the company as they accumulated millions of dollars in debt. As of August 2022, its annual revenue was only 4.8 million dollars, which is low for a large-scale energy company. This was not enough to sustain the wells the corporation purchased. As a result, the company was heavily indebted to the Ministry of Energy and Resources, rural municipalities, and a First Nation in southern Saskatchewan. The Ministry also currently has 27.7 million dollars for its environmental liability to clean locations in the Abbey Resource Corporation’s ownership, which is separate from what the company owes the Ministry.
To try and combat these debts, the Abbey Resources corporation tried to gain a reduction in their local taxes but the Court of Queen’s Bench decided to deny them this tax reduction. The Court of Appeal of Saskatchewan also refused to hear more about the case.
Upon filing for bankruptcy, the Government of Saskatchewan took on the role as a receiver, MNP. Through a bidding process, it will be determined who gets to own portions of what the Abbey Resources Corporation used to own. More specifically, people want a claim on the Abbey Resources Corporation’s assets that have been listed in the orphan well inventory as of March 22, 2022. The bidding deadline for the company’s assets have been repeatedly extended and puts stakeholders in an uncertain position. Given this context, Saskatchewan citizens’ access to natural gas is made more difficult. Instead of people knowing who the assets go to and how the assets will be used in relation to them, the Saskatchewan public is left waiting for an answer for a prolonged period of time. The government must act more swiftly because the longer people wait for how the company’s assets will be used, the longer they are deprived of proper access to sustainable energy.
