Companies evaluating their own viability these days have more than bottom line financials to consider. When it comes to operating within Western Canada, most producers understand and strive to meet general liability standards. Producers have programs in place to manage abandonments and reclamations according to regulations and proper environmental stewardship. Producers budget operations with these liabilities in mind. However, this planning becomes more difficult when it comes time for a company to decide if they should cease operations.
Whether it’s the result of volatile commodity pricing or the natural outcome of an entrepreneurial-driven patch, cessation decisions aren’t uncommon among WCSB producers. And with the current importance placed on ARO liabilities within the region, decision-makers need tools to help examine the potential impact of liabilities on their options.