Sad story in my Globe and Mail this morning about a plucky junior gas producer out in Alberta that just couldn't cope with low prices, high taxes, blahblahblah... so they've walked away from 4,700 gas wells. They've also walked away from their responsibility to decommission those wells.
The fiction that these costs will be borne by the "industry fund that is already struggling to deal with orphan wells" is just that; fiction. The Canadian taxpayer is on the hook, and were I a betting man, I would bet that the final tally will be several times the estimated $329 million.
The Globe and Mail should be naming and shaming the people behind this fiasco. Trident Exploration Corp. was acquired in 2016 by US hedge fund Origami Capital Partners. They installed a new board of directors consisting of four lawyers (including one Columbia and two Harvard grads), an MBA from Yale, an accountant, and a solitary petroleum engineer. Since 2016 Trident has been run by paper-shufflers, not oil and gas guys.
The price of gas in early 2016, when Origami would have been doing their due diligence, was lower than it is today, so that excuse doesn't wash. In fact, the only credible reason mentioned is the recent Supreme Court decision prioritising polluters' environmental liabilities over secured creditors.
This situation is crying out for a serious forensic accounting investigation. What did Origami pay for Trident? How much of that was debt and how much was equity? How much money has left Trident since the Origami takeover, and where did it go?
These and many other questions need to be answered, but the Globe and Mail lets those responsible hide behind a veil of anonymity.
Here's a link to the board of directors installed at Trident Resources by Origami in 2016. Hopefully that will give Globe reporters Jones and Lewis a starting point for researching a serious story about this debacle.
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