Orphan wells, Builders’ liens continuing concern for Alta. farmers and landowners

By Tim Kalinowski

The Farmers’ Advocate Office continues to deal with a steady stream of complaints regarding orphan wells and oilfield insolvency, says FAO rural engagement and communication specialist Jeana Schuurman.

“We are getting a lot of questions around insolvency and orphaned wells,” confirms Schuurman. “A lot of those calling us, the issue has been Lexin Resources/ Compton. The receivership process has been proceeding slowly, and that is a federal process.

“So we have a lot of landowners calling to ask about their rights, and what happens next. Asking how we interact with that federal process going on, and what do we need to know about that?”

Schuurman reminds farmers they have recourse in Alberta under the Surface Rights Act.

“People continue to trickle into our office saying I didn’t know I had recourse through the Surface Rights Board,” she says. “I had no ideas Section 36 existed. How do I make my application?

“In the last couple of months we have had people calling and saying: The operator went insolvent on my land. Does that mean I own the infrastructure now? I am very quick to say no, that is not the case, and this is what you need to know … I am happy also to pass that same message onto your readers to get the regulatory and surface rights aspect out there.”

Schuurman also cautions those engaging in the compensation process outlines under the Surface Rights Act must be patient.

“We just want people to be aware the Surface Rights Board is overwhelmed with these types of files and are receiving quite a lot of them,” she says. “So you have to be patient and realistic about the time frame as to when you will get that money back.”

Related to the issue of insolvency in some cases is the issue of builder’s liens, states Schuurman— another hot topic of inquiry among Alberta farmers right now.

“The (oil and gasfield service) company can register a Builders’ lien against the (production) company’s interest attached to the certificate of title, but some of those are not registered properly and some have been registered against the landowner’s certificate of title, or have even been naming the landowner as a liable party.

“We are really communicating to landowners that they are not obligated to accept that,” she stresses.”

She suggests a few potential courses of action for those in this situation.

“They can write to the company or Alberta Land Titles if they feel the lien has been registered incorrectly,” Schuurman explains. “It is supposed to be registered against the mineral’s interest or the caveat for the add-on title instead of the whole landowner’s certificate of title.”

Landowners can also contact the company directly which is asking for payment, and ask them to correct the error on your land title. But if you have received a legal notice asking payment on a builder’s lien from an attorney, Schuurman says challenge it immediately.

“In the case where the landowner is named as an owner of the debt, they would have to make sure they responded in the timeline listed in the lawyer’s correspondence, and to say I don’t agree to be liable for this amount.”

The Farmers’ Advocate Office frequently releases packets of information on outstanding issues facing farmers in the province, and Schuurman advises farmers to take advantage of these free information resources.

“Any time we see rural issues which keep popping up, we are going to respond to that by saying here is the information you need and how we are going to equip you to make decisions for your property,” Schuurman explains.

“One of two of the guides we just put out are on sand and gravel pits, or surface material extraction, to give people an understanding if there is a sand or gravel pit coming into their neighbourhood here is what they need to know, and what the regulation structure is.

“The other one we just put out was a document on engaging with your municipality, and some of the questions we get out about development permits, subdivision, assessment and the role of the ombudsman.”

“I think these are both good resources for more of the general, rural issues we talk about.”