Operators & Industries

Working Interest Participant Agreements

Before closing a defunct company site, we encourage Working Interest Partners (WIPs) to consider a Working Interest Partner Agreement (WIPA) with the OWA. WIPAs allow the OWA to close a site that is licensed to a defunct company when there is an active company with a working interest in the site (that is, the site is not an orphan), as if it were an orphan site. The OWA closes the site and pays the costs for that work, and the working interest participant reimburses the OWA for their portion of the costs. These agreements allow WIPs to pay their percentage of the closure costs only, rather than paying 100 per cent of costs and then waiting for reimbursement through a WIC.

Benefits of a WIPA

A major benefit of a WIPA is that the OWA executes all closure work on the proponent’s behalf and can leverage efficiencies based on our large, province-wide program. As such, the OWA typically executes projects for significantly less than industry averages.

The overall intent of a WIPA must always be to reduce costs to the Orphan Fund.

Eligibility

The OWA retains discretion on where and when WIPAs are undertaken. The OWA may enter into WIPAs in many situations; however, the following criteria will be used to determine situations were a WIPA may be formed:

  • The licensee of record is defunct and a WIP has been issued a corporate-level Abandonment Order or an Operator Letter/Environmental Protection Order for closure work by the AER.
  • The defunct licensee’s working interest percentage (WI%) typically exceeds 50 per cent.
    • This may be individually for a single site or in the aggregate for several sites.
    • Where more than one defunct company is involved, the aggregate of the defunct companies combined WI% typically exceeds 50 per cent.
  • The WIP must be financially viable but may be required to post up-front financial security that will cover their WI% of the liabilities.
  • WIPs are in good standing respecting any previous agreements with the OWA.
  • Field execution programs are subject to budgetary considerations. WIPAs may be extended where current-year budget restrictions apply.

Other considerations may be reviewed by the OWA. The OWA is not obligated to enter into an agreement with a WIP and will ultimately make the final decision. The AER will be engaged prior to any atypical agreements being considered.

For further information, please contact WIPA@orphanwell.ca