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Working Interest Claims

A Working Interest Claim (WIC) is a claim submitted by industry to the AER for the proportionate share of abandonment and/or reclamation costs incurred on behalf of a defaulting working interest participant (wip) when the abandonment or reclamation is complete. A wip is any party to a joint operating or other agreement under which the party is entitled to a proportionate share of cash flows for the same proportionate share of costs.

Abandonment or reclamation is considered complete when the well, pipeline abandonment or facility decommissioning is done in compliance with AER requirements and the AER DDS system is updated. Reclamation is considered complete when a reclamation certificate has been obtained from the AER.

Step One The OWA requests applicants to notify the OWA beforehand of their intentions of making a WIC by sending the OWA an AFE for approval before commencing operations. This process will help us better manage the influx of claims, and is intended to improve turnaround times on claims at the time of application.

Step Two WIC’s are submitted to the AER with a letter and supporting documentation. It is suggested that applicants confirm with the AER Insolvency Team, Closure and Liability Branch that their claim is eligible before proceeding. Please contact the AER Insolvency Team at 403-297-3113 or at liabilitymanagement@aer.ca for further information on the AER process.

The AER reviews WIC’s and first determines that the claims are eligible for a company that has been deemed a defaulting working interest participant in accordance with section 70 (2)(iii)(b)(iii) of the Oil and Gas Conservation Act.

Step Three The AER then gives the WIC to the OWA to review for appropriate backup and to provide comment. The OWA requires backup documentation including a summary sheet of expenditures, invoices, daily reports and salvage credits before claims are reimbursed. GST is reimbursed and administration, overhead expenses, surface lease payments, municipal taxes and legal expenses are not reimbursed.

The summary sheet should include invoice date, vendor name, invoice number, invoice amount and the defunct company's percentage of invoice. (Summary Sheet Examples). Please provide summary sheet in electronic and paper format. Claims with insufficient documentation can be rejected at this stage.

Step Four When the OWA is in agreement with the cost submission and has confirmed that all relevant documentation in the claim has been provided, it notifies the AER. The AER then designates the property (well, pipeline, facility or site) as an orphan for the purpose of reimbursement in a letter to the OWA. OWA will make the payment directly to the applicant and notify the AER.

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