By Canadian Press

Bankruptcy of energy company may show lenders view industry differently: CAPP

May 2, 2019 | 1:09 PM

The bankruptcy of a Calgary energy company that plans to walk away from thousands of gas wells may be a sign lenders are changing how they look at the industry in light of a recent Supreme Court ruling.

Brad Herald, vice-president of the Canadian Association of Petroleum Producers, says institutions are now taking a harder look at costs of cleaning up old wells after the so-called Redwater decision.

That decision says bankrupt companies must pay those costs before they’re allowed to sell off any remaining assets.

Trident Exploration announced Wednesday it was ending operations and abandoning 4,700 gas wells.

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It says the Redwater decision was one of the reasons it decided to wind things up.

But University of Calgary resource law professor Nigel Bankes says it’s good that bankers are weighing clean-up costs in their financing decisions.  

Herald says many or even most of Trident’s wells could be bought by another operator, who would then take over clean-up responsibility.

The Canadian Press