This page answers commonly asked questions about our liability management programs and processes.
If your question is not answered here, please contact our Customer Contact Centre or email @email.
Question: What are the conditions and benefits of filing a multiwell pad notification?
Answer: A licensee may establish a multiwell pad on an individual surface lease that the licensee has more than one well on. Both the well licences and the surface lease must be held by the same licensee. Establishing a multiwell pad reduces the reclamation liability of the wells located on the pad.
Question: I am the licensee of a well, and there has been a change to one of the working interest participants (WIPs). Can I update this information?
Answer: Yes. Licensees can update WIP information at any time through OneStop and will be prompted to update this information when a well is licensed, transferred, suspended, and abandoned.
The above information will be included in the well file, but our database will not be updated.
Question: How can I view our monthly licensee liability rating (LLR) and liability management rating (LMR) assessment?
Answer: LLR and LMR assessments can be viewed by accessing the Digital Data Submission (DDS) system and selecting Subsystem Reports > Liability Rating > View Liability Rating. These assessments can be downloaded.
Question: What is the formula for calculating the LLR?
Answer: The LLR calculation is provided in appendix 4 of Directive 006: Licensee Liability Rating (LLR) Program.
Question: Can I view the detailed monthly assessment of another company?
Answer: No. The monthly assessment is only accessible to the licensee.
Question: What do I need to submit if my company qualifies for a 50 per cent reduction in reclamation liability?
Answer: To apply for a 50 per cent reduction in reclamation liability, the following documents are required:
- cover letter describing the nature of the request
- Phase I Environmental Site Assessment (ESA)
- Phase II ESA, if applicable
- remediation reports, if required
- reclamation assessment (soil, landscape, and vegetation; the vegetation assessment will show that re-establishment of vegetative cover is required)
- signed professional declaration forms
If approved, the changes in liabilities are valid for one year after the reclamation assessment, after which the licensee must resubmit a request.
Question: Are deemed assets calculated differently in the OWL program than in the LLR program?
Answer: Yes. A multiplier of 0.5 is used in the facility deemed asset calculation to establish a minimum asset-to-liability ratio of 2.0. An oilfield waste management facility's deemed assets is the sum of the previous 12 months of nonproducer licensee (NPL) volumes multiplied by the AER-approved netback for these volumes, multiplied by 3 years, multiplied by 0.5.
Question: One of my waste management approvals is for a facility that does not have any Petrinex reporting requirements. How will assets for this approval be calculated?
Answer: The asset calculation for a licensee not required to report volumetric data to Petrinex is the same as for a licensee reporting volumes to Petrinex. The only difference is that the licensee reports the volumes directly to us. If you have any further questions, please contact our Customer Contact Centre.
Question: If a Phase I ESA finds evidence of contamination, can we estimate liability based upon the Phase I investigation?
Answer: No. Observation alone cannot be used to evaluate the significance of contaminant issues or quantify the effects. A phase II ESA is required.
Question: Where do I find facility SSLA cost estimates in the DDS system, and where is the expiry date?
Answer: Search in the DDS system under the company BA code and go to AER > Reports > Liability Rating > View Liability Rating. Views and searches of all properties licensed to the company can be accessed. Click on the facilities tab; there will be a list of facilities with licence numbers. For each facility, cost estimates can be viewed by clicking on the view button at the far right-hand side of the screen, which will indicate expiry date and other relevant data.
Question: How is the large facility orphan levy calculated?
Answer: A licensee in the Large Facility Liability Management Program (LFP) is responsible for its percentage of any LFP orphan levy. A facility's share of the levy is calculated as the sum of the deemed liability of facilities in the program (for which it is the licensee to the total liability of all facilities in the LFP), less the liability of any facilities licensed to a defunct licensee as of the date the levy is calculated, in accordance with the following formula:
Facility's share of levy = A/B Ã— required levy amount, where
- A is the facility's deemed liability on the date the levy is calculated, and
- B is the deemed liability of all facilities in the LFP, less the liability of any facilities licensed to a defunct licensee on the date the levy is calculated.
Question: How do I become a nonproducer licensee (NPL)?
Answer: Pursuant to Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process, an NPL is a licensee whose deemed assets from midstream activities in the LLR Program, Large Facility Liability Management Program (LFP), and Oilfield Waste Liability (OWL) Program exceed its deemed assets from production volumes reported to Petrinex or a licensee having only facilities included in the LFP or the OWL program.
Question: What is a netback? What items should be included or excluded?
Answer: Netback is net revenue generated from midstream activities per a unit of third-party volume processed. For the purposes of a netback submission, net revenue is earnings before interest, taxes, depreciation, and amortization, and is equal to gross margin (midstream revenue less cost of goods sold), less direct operating costs and applicable general and administrative expenses.
Net revenue is that which a similar midstream licensee could achieve if it operated the same midstream facility. Net revenue is generated from conducting the day-to-day midstream operations. Therefore, revenue and expense items that would not be typical of facility operations should be excluded from the netback calculations.
Production volumes refer to the 12 months of total received inlet volumes reported to Petrinex against the reporting facility ID codes attached to a facility's licence. Report only third-party volumes from which revenue is generated. Volumes from a licensee's own production are not to be included. The 12-month reported volumes must correspond to the same accounting period as the licensee's most recent fiscal year.