Implications Of The Redwater Decision – Where Does The Buck Stop?

On May 17, 2016, the Alberta Court of Queen's Bench released its eagerly awaited decision in Redwater Energy Corporation (Re), 2016 ABQB 278 regarding the intersection between the provincial oil and gas regulations and the federal bankruptcy and insolvency regime. At issue was whether the provincial regulatory regime under the Oil and Gas Conservation Act ¹ (OGCA) and the Pipeline Act ² (PA) operationally conflicted with the Bankruptcy and Insolvency Act ³ (BIA) or frustrated its purposes.

In particular, the Court was concerned with: (a) whether a receiver and trustee (together, a Trustee) who renounce licensed oil and gas assets in the context of a bankruptcy or receivership proceeding is required to take possession and control of all licensed assets – including abandoned or non-producing wells; (b) whether a Trustee is required to fulfill the statutory obligations of the debtor under the OGCA and the PA to abandon, reclaim and remediate a debtor's licensed assets;