On June 20, 2016, the Alberta Energy Regulator (AER) published
Bulletin 2016-16, outlining interim measures to manage the
increased risk of disclaimed oil and gas properties and the
associated abandonment and reclamation costs, following the recent
decision of the Alberta Court of Queen's Bench in the
bankruptcy of Redwater Energy Corporation. The interim
measures are effective immediately and include a requirement that a
transferee of oil and gas properties have a Liability Management
Rating (LMR) of at least 2.0 before the AER will approve the
transfer of the AER licences, approvals and permits associated with
such properties.
The LMR is a measure used by the AER to estimate the ability of an
AER-licensed company to pay for its future costs to close and
abandon its wells, pipelines and facilities and to reclaim well and
facility sites. The LMR is a measurement of a company's assets
versus its liabilities. If a company's liabilities exceed its
assets, a security
