Woman making a frame around the sun with her hands at sunrise
Woman making a frame around the sun with her hands at sunrise
Woman making a frame around the sun with her hands at sunrise

Redwater Appeal Creates Continued Uncertainty for Insolvent Oil and Gas Companies in Alberta

June 2016 Restructuring and Insolvency Bulletin Kourtney Rylands, Adam C. Maerov*

As discussed in our May 2016 bulletin, New Rules for Asset Sales by Insolvent Producers (at least for now), the decision of the Court of Queen’s Bench of Alberta in Re Redwater Energy Corporation, 2016 ABQB 278 (“Redwater“) determined that provisions of the provincial legislation governing the actions of licensees of oil and gas assets did not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bankruptcy and Insolvency Act (the “QB Decision“).

Both the Alberta Energy Regulator (the “AER“) and the Orphan Well Association (“OWA“) have taken steps to appeal the QB Decision to the Alberta Court of Appeal. Although the QB Decision currently represents the law in Alberta with respect to how receivers and trustees take possession of and sell oil and gas assets in Alberta, the pending appeal will likely create uncertainty in the industry that will limit how comfortable insolvent companies and  receivers feel relying upon the QB Decision in renouncing wells and facilities. As we noted in our May 2016 bulletin, caution may continue to delay these activities until a decision on an appeal is made.

by Caireen Hanert, Kourtney Rylands and Adam Maerov

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2016

Related Publications

post
Publication

Canada’s Transport Minister Approves Air Transat’s Take-Over by Air Canada

Feb 22, 2021

In a long-awaited decision, Canada’s newly appointed Transport Minister approved Air Canada’s acquisition of rival Transat on public interest grounds

post
Publication

On Second Thought: Ontario Court Dismisses Secondary Market Securities Class Action on Summary Judgment

Feb 21, 2021

Part XXIII.1 of Ontario’s Securities Act creates a statutory cause of action for investors who suffer losses in the secondary market.

post
Publication

LIBOR Newsflash: Announcement on Official Cessation of LIBOR is Expected Soon

Feb 18, 2021

IBA and FCA expected to make announcement about the official cessation of LIBOR. Timelines for ceasing new issuances of LIBOR loans.