The Globe and Mail reports in its Monday, Nov. 21, edition that Canadian energy companies are expected to abandon a record number of aging oil and gas wells over the next year.
The Globe's Andrew Willis writes that
RBC Dominion Securities says production is currently suspended at 93,000 Western Canadian oil and gas wells.
RBC expects decommissioning activity to rise in Western Canada. RBC estimates the present value of all future decommissioning projects is $7.3-billion.
However, the timing of these costs varies from one company to the next. For some Canadian producers, decommissioning is a near-term hit to the bottom line, for others, the expense of shutting down properties is decades away.
RBC says, "Sensitivity to decommissioning liabilities is highest at producers with a high weighting of legacy assets, such as Pengrowth Energy Corp., Petrus Resources Ltd., Northern Blizzard Resources Inc. and Bonavista Energy Corp."
At the other end of the spectrum, companies taking oil and gas out of new, large reserves are years away from paying anything to retire wells. A list of these companies includes Seven Generations Energy, Tourmaline Oil and Granite Oil.
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