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Creditors mount as oil companies continue to struggle

In a previous post, we talked about one landmark bankruptcy case in Alberta which could ultimately result in both the public and industry players covering the costs for abandoned wells left behind by insolvent oil and gas companies.

Now, amid the continuing financial plight of the province's resources sector, landowners and municipal governments are also feeling the pinch of unpaid tax debts and land lease payments - and for the first time, the debtors are no longer confined to small producers with 10-20 wells, but also mid-sized companies.

Hundreds of thousands in tax dollars owing

The county of Stettler is one rural municipality that's out $500,000 in tax money due to a single delinquent resource company. To recover its due, the County has chosen to take legal action against the company.

Mountain View County - whose tally totals $300,000 spread out over a number of troubled companies - is taking another approach. The County has sent Alberta Finance Minister Joe Ceci a letter asking to have the amounts outstanding from the companies factored into the education/property tax bill levied by the province against the County.

Record numbers of landowners seeking compensation

For owners still waiting on surface rights lease cheques from the companies who lease well sites on their land, the official recourse is to file an application with the Alberta Surface Rights Board. The increased delinquency in making these payments has resulted in the number of applications this year being four times what has been typically seen in previous years.

The Board is already working through almost 800 applications, with another 400 waiting to be processed. If it can't mediate a resolution, then the provincial government could be saddled with a potential $4 million tab to cover the shortfall.

With some of these resource companies already dissolved and others in receivership or bankruptcy, it's a troubling trend that will likely continue leaving creditors holding an open bag - and the public ultimately shouldering the financial fallout.

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