Navigating the Sequoia Resources Insolvency: A Guide for Alberta Landowners on Lease Sites and Unpaid Rent

Author: kristian-toivonen posted in: Surface Rights

The recent resolution of the Sequoia Resources insolvency case holds significant implications for landowners in Alberta who have Sequoia lease sites on their property. As the Orphan Well Association (OWA) prepares to take on an additional 1,800 to 2,000 wells, many landowners are understandably worried about the future of their land and the recovery of unpaid rent. In light of this situation, it is important for landowners to understand the Section 36 Surface Rights Act proceedings and how KMSC Law LLP can provide assistance. Further, KMSC Law LLP assists landowners with Section 36 Applications for unpaid rent on a contingency basis, meaning we only get paid if you do, and the amount of our fee never exceeds the amount you will be paid.

Understanding the Sequoia Resources Insolvency

Sequoia Resources went bankrupt in 2018, leaving behind a substantial number of idle wells and associated infrastructure. The OWA, which is responsible for cleaning up orphaned wells, is now tasked with managing these additional assets. The estimated clean-up cost for Sequoia’s properties is around $200 million, and the OWA anticipates that it will take over a decade to complete the reclamation process.

Implications for Landowners

For landowners with Sequoia lease sites on their land, the primary concerns are the environmental impact of the abandoned wells and the recovery of unpaid rent. The prolonged court battle and the eventual transfer of wells to the OWA have left many landowners in a state of uncertainty. However, there are legal avenues available to address these issues.

Section 36 Surface Rights Act Proceedings

Under the Alberta Surface Rights Act, landowners have the right to receive compensation for the use of their land for oil and gas operations. Section 36 of the Act specifically addresses situations where a company fails to pay the required compensation. Here’s a breakdown of the process:

1. Application for Recovery of Unpaid Rent: If a company fails to pay the agreed-upon rent, landowners can apply to the Land and Property Rights Tribunal (LPRT) for recovery of the unpaid amounts. This application can be made even if the well has been transferred to the OWA.
2. Issuance of a Recovery Order: Upon receiving the application, the LPRT will review the case and, if satisfied that the rent is unpaid, will issue a recovery order. This order directs the Government of Alberta to pay the outstanding rent to the landowner.
3. Enforcement of the Recovery Order: The recovery order can be enforced through the courts if necessary. This ensures that landowners receive the compensation they are entitled to, even if the original leaseholder is insolvent.

How KMSC Law LLP Can Assist

At KMSC Law LLP, we understand the complexities and frustrations that landowners face in these situations. Our experienced team is well-versed in surface rights law and can provide comprehensive support to landowners dealing with Sequoia lease sites. Here’s how we can assist:

• Legal Consultation and Advice: We offer detailed consultations to help landowners understand their rights and the legal options available to them. Our team will review your lease agreements and provide tailored advice on the best course of action.
• Filing Section 36 Applications with the Land and Property Rights Tribunal: Navigating the application processes of administrative tribunals can be daunting. We assist landowners in preparing and filing applications for the recovery of unpaid rent with the LPRT, ensuring that all necessary documentation is in order.
• Representation in Proceedings: Our lawyers can represent you in proceedings before the LPRT, advocating on your behalf to secure a recovery order. We have a strong track record of successfully representing landowners in similar cases.
• No Win, No Fee: At KMSC Law LLP, we are committed to ensuring that our clients receive the support they need without upfront financial burdens. Therefore, we operate on a contingency fee basis for Section 36 Applications, meaning you will only be required to pay our legal fees if your application for the recovery of unpaid rent is successful. This approach underscores our confidence in our ability to navigate the complexities of the process and aligns our interests with yours, focusing on achieving a favorable outcome.

Contact Our Surface Rights Team for Help

The Sequoia Resources insolvency has undoubtedly created challenges for landowners in Alberta. However, with the right legal support, it is possible to navigate these challenges and secure the compensation and environmental remediation you deserve. At KMSC Law LLP, we are committed to standing by landowners throughout this process, providing expert guidance and representation every step of the way.

If you have Sequoia lease sites on your land and are facing issues related to unpaid rent, do not hesitate to contact us. Our team is here to help you understand your rights and take the necessary legal actions to protect your interests.