MOUNTAIN VIEW COUNTY - Council has forgiven outstanding taxes totalling more than $39,000 owed by five bankrupt oil and gas companies.
“The five companies owning the nine listed property tax rolls have been insolvent and in receivership,” said Mountain View County's chief administrative officer Jeff Holmes at the Jan. 10 council meeting. “Those companies have gone through the bankruptcy process and there is no hope of recovering any of those amounts from them.
“The oilfield properties have been offered for sale for a number of years and remain unsold. Decommissioning and remediation is yet to be completed by the Orphan Well Association for the accounts still receiving annual tax levies.
“The outstanding levies are all of the accounts back to at least 2018 and are all deemed to be uncollectible.”
The five companies involved are Houston Oil and Gas Ltd., Manitok Energy Inc., Scollard Energy Ltd, Trident Exploration Corp., and Trident Limited Partnership.
“The allowance for doubtful accounts and taxes receivable would be reduced by the same amount, $39,150.64.”
As far as budget implications, he said, “The nine listed property tax rolls have been recognized in allowance for bad debt. By writing off these accounts, with a December 31, 2023 effective date, it would be recognized as a bad debt expense in the 2023 fiscal year.
Council also passed a motion approving having a number of other outstanding oil and gas accounts included in planned county applications under provincial education requisition (PERC) and designated industrial requisition credit (DIRC) programs.
PERC provides an opportunity to recover funds previously submitted to the province for the education requisition, while DIRC provides the same opportunity for designated industrial property requisition.
The companies involved are Hard Rock Resources Ltd., Houston Oil & Gas Ltd., Manitok Energy Ltd., Odaat Oil Corp., Sailing Energy Ltd., Scollard Energy Ltd., Shanpet Resources Ltd., Silver Blaze Energy Ltd., and Tallahassee Exploration Inc.
“These are companies that are still in operation but have not paid their education requisitions for 2023, so we are able to make application to the province to get that money back and then in the future is that education tax is paid then we have to do a reconciliation with the province and turn it over to them,” said Holmes.
Coun. Peggy Johnson asked whether there is any expectation that the companies will “come through with their education tax.”
Holmes replied, “Certainly there is some chance, some possibility, and that is why we are not asking council to formally write-off any other tax amounts owed by any of those companies.”
Coun. Greg Harris asked, “What is the process for us for these companies, at what point do we notify AER (Alberta Energy Regulator) and monitor what they are doing and if they are applying for other licences?”
Holmes replied, “The new process is a quarterly update that we provide to the AER and Municipal Affairs and we list the companies with outstanding amounts and then in exchange the changes to the legislation indicate that the AER is not supposed to grant any new licences to those companies until their debts are paid.”
Coun. Jennifer Lutz said, “My new concern would be that I hope they (AER) are looking at who they are giving licenses to in the first place, that it is not just recycled, we will start a new company with the same folks, because I think that process is something they could look at next.”
Deputy reeve Dwayne Fulton chaired the Jan. 10 council meeting, with reeve Angela Aalbers not in attendance.
