Word to the Wise: Abandonment and Reclamation across WCSB from 2021 to 2022

May 2, 2023

Each week, XI Technologies uncovers trends and insights using our enhanced data and software focused on the WCSB. If you’d like Word to the Wise delivered directly to your inbox, subscribe here. 

This week we look at the E&P landscape through a different lens, one which shows how liabilities were managed in the Western Canadian Sedimentary Basin (WCSB) over the past year  

XI Technologies conducted an analysis of liability values and reclamation totals with the aim of obtaining a comprehensive overview of the status of oil and gas liabilities 

Liabilities Value 

The following information was compiled using XI’s ARO Manager with XI’s 2022 Cost Model (plus AssetSuite’s well and facility data) compared with AssetBook’s LLR Module using the government’s Directive costs model. Pipeline information was specifically excluded for this compilation as provincial LLR calculations do not currently include those assets. 

Figure 1 –Total YOY Liabilities using XI’s ARO Cost Model vs Directive LLR Cost Model

Comparing the two years, 2021 and 2022, we observe that the liability values have reduced by 92 million, with Alberta reducing its liability value by 59 million using XI’s 2022 cost modelBased on the LLR cost values dictated by government directives, the liability reduction is $524 million, with Alberta reducing its calculated LLR costs by $476 million. 

This significant difference between XI’s cost model values and the LLR calculated values reflects the large amount of abandonment work that was completed and recognized in 2022. XI’s cost model reflects lower costs for abandonment on average than the LLR models from each government because current market data reveals actual abandonment costs (not including reclamation and remediation) are coming in lower. 

For a look at five major differences between XI’s proprietary third-party cost model and regulator LLR costs, download this case study 

Reclamations in Western Canada 

During 2022, the four western provinces combined had 2804 reclaimed well sites, at an approximate spend of $64.8 million. Additionally, $4 million was allocated to facility locations which were reclaimed.  

Figure 2 – Wellsite Reclamation in 2022 across WCSB

Based on our 2021 blog article entitled Liabilities and Reclamation in 2021, the Average Cost for full reclamation was approximately $41,300 per site (across all provinces), whereas it is now approximately $23,100 per site (across all provinces). 

But this doesn’t really tell the full picture of how liabilities are being currently managed, as the reclamation calculations are based on when the Regulator updates the status for a site, for example, when the site has officially been “reclaimed, and doesn’t reflect when the work was actually completed. As mentioned, 2022 saw a large amount of abandonment work completed. 

 Abandonments in Western Canada 

Over the past three years, there have been several different federal and provincial programs available to assist companies in completing abandonment work. The availability of these funds to operators is reflected in the number of sites where the license status changed to abandoned, and therefore are well on the path of being fully reclaimed. 

Figure 3 – Overall Cost of Abandonment Licenses

Based on a comparison of the statuses between the last 2 years, there were many more sites which moved to an abandoned status in 2022 than in previous years, with spending calculated at $272 million (LLR calculated amount), including sites which were currently on the Orphan Well list in any of the provinces. 

Figure 4 – Wellsite Abandonments in 2022 across WCSB 

As you can see, there was much work completed in all provinces, with the largest calculated abandonment dollars being spent in Southeastern Alberta. If you’d like to dig deeper into the two graphics, click here to access an interactive dashboard. 


This data was calculated using XI’s liability software module called AssetBook ARO Manager. ARO Manager is the only standardized tool for estimating and monitoring asset retirement obligations in Western Canada’s oil and gas sector. It is ideal for over-the-fence evaluations of potential acquisitions and also for keeping track of your internal ARO, replacing cumbersome spreadsheets.  To learn how XI’s ARO Manager can help with the planning and reporting of liability management, visit our website or contact us for a demo.