Buying land with an abandoned oil well

[JayT]

I'm looking at buying some property in parkland county and there is an old well on it that was decommissioned I believe in 2016. It has been filled with concrete and the pipeline removed from the property. Just curious if anyone has any experience with property like this, and what problems could arise from it. I would like to get the soil tested for contaminants because who knows what they left behind....

 

[Lightningmike]

Regulations are pretty stiff for abandonments in the last few years. Both on the casing and the contaminated soil surrounding it. Not to say its 100% guaranteed but what is now aways. I know there are a few like that in Lloydminster.

 

[Ron H]

Here’s some info,.... I’d certainly recommend getting quotes on clean up prior to making any decisions,,,
https://thenarwhal.ca/11-things-trudeau-1-7-billion-clean-up-festering-orphan-inactive-wells/

This quote in particular...

The Alberta Energy Regulator estimates it can cost $12,800 to $134,177 to plug a well, and $16,500 to $42,155 to reclaim the site.
As The Narwhal has previously reported, a researcher at the University of Calgary found that actual reclamation costs can easily be 60 per cent higher than the regulator’s estimates.
Others have said the numbers may be far higher — in the hundreds of thousands of dollars.

 

[Cyle]

If it’s not completely done run. I looked into this, it can easily be $500k to clean up and no guarantee if government will ever do it. Unless you get land for that much under value it’s not worth the risk.

 

[JayT]

If it’s not completely done run. I looked into this, it can easily be $500k to clean up and no guarantee if government will ever do it. Unless you get land for that much under value it’s not worth the risk.

If it costed that much to reclaim it properly the bank will have to pay me to take it. I know we can get an awesome deal on it because of the abandoned well, and it looks like everything was reclaimed properly but I wouldn't know unless I tested the soil and check for the certificate. The oil company that owned it went bankrupt in the end of 2018, which means they reclaimed the site well before they went under. The bank has owned it since then.

 

[Cyle]

If it costed that much to reclaim it properly the bank will have to pay me to take it. I know we can get an awesome deal on it because of the abandoned well, and it looks like everything was reclaimed properly but I wouldn't know unless I tested the soil and check for the certificate. The oil company that owned it went bankrupt in the end of 2018, which means they reclaimed the site well before they went under. The bank has owned it since then.

I was looking at property in the city with one, I believe it was still stubbed out of ground and needed to be capped and what not. Problem is if it’s not done totally it’s a crap shoot what it will cost and you can’t build anything close until it is so depending on layout of land if you want to try and wait for government the land just sits. The reason there is so many orphan wells is because the clean up costs more then the land is worth so the companies just sell it to a numbered company and bankrupt it, super shady and shouldn’t be allowed. If it’s all done and paperwork is in line I wouldn’t worry about it. But even the ground contamination is a huge issue. No bank will lend on land without it. And costs are insane to do it.

 

[pfi572]

If well was produced and cleaned up correctly it should have a Rec certificate issued from AB Gov . This will be on record .
All producing wells have to have a faze three down before clean up can start .
That’s drilling and sampling the soils for contamination.
If borrowing money the bank probably won’t lend the coin for the land without doing a Enviromental assessment anyway?

 

[S.W.A.T.]

It doesn't cost much to get your soil tested. Make that one of your subjects, owner to have soil tested around well head. And then you pay another company to do the same. Might cost $2-500 depending on how many tests and what company. Call your local Secure Energy office and explain the situation. Spending $500 now could save you hundreds of thousands down the road.

 

[snopro]

There are so many regualtions around the oil industry now I wouldn't worry about it. I have an abandoned well on my land and I'm not worried about it. Its not my responsibility to clean it up. Its either the oil companies or the governments. The orphan well program is working on these wells as we speak and they will be cleaned up properly and a certificate will give them the green light when its completed.

 

[tejay]

Didn’t SNC Lavalin get a contract from turdeau to clean up abandoned wells? Might be an avenue to pursue?

 

[snopro]

yes they got it. Thats just criminal

 

[JayT]

Thanks for the responses guys, I think I might throw in a lowball offer subject to a environmental assessment and checking on the Reclamation certificate. If they dont accept it, then I think I'll pass on it.

 

[Cdnfireman]

If it's been properly reclaimed and has the government paperwork proving it, no worries on it.... if its been abandoned with nothing done and they're not paying the lease payments anymore.... not so good....

 

[JayT]

If it's been properly reclaimed and has the government paperwork proving it, no worries on it.... if its been abandoned with nothing done and they're not paying the lease payments anymore.... not so good....

The land is basically pristine, there is no well head or anything left just Concrete where the well was, and I believe the pipeline was removed from the property all the way to the property line at the road. That's all I know so far until I can find out more tomorrow. So far the real estate agent with the listing told us we can't build anything within five metres of the well. Which is not really a problem

 

[gedakbx]

Is there still a lease sign.

 

[doorfx]

I have a land administrator in the family. Pm me your questions and I’ll ask her.

 

[JayT]

Is there still a lease sign.

There's a steel post that used to have a sign on it sticking out of the ground where the well was. The oil company had bought the land and when they went under the bank took it over. Now they are trying to sell it.

 

[JayT]

So the realtor that is listing the property is trying to tell us that there is no Reclamation certificate required on this property. To me that sounds like a line of bull and he's just trying to sell this property sent to some unknowning person. Does anybody know who I would contact to find out about a Reclamation certificate? Or if it is in the works to be reclaimed? The realtor is coming across as a dolt

 

[Cyle]

So the realtor that is listing the property is trying to tell us that there is no Reclamation certificate required on this property. To me that sounds like a line of bull and he's just trying to sell this property sent to some unknowning person. Does anybody know who I would contact to find out about a Reclamation certificate? Or if it is in the works to be reclaimed? The realtor is coming across as a dolt

I'm not sure what the legal name of it is called. But to protect yourself I would just get in writing the property has been reclaimed, or doesn't require reclamation, something to that effect so if you buy it and find out you aren't on the hook.

 

[skegpro]

So the realtor that is listing the property is trying to tell us that there is no Reclamation certificate required on this property. To me that sounds like a line of bull and he's just trying to sell this property sent to some unknowning person. Does anybody know who I would contact to find out about a Reclamation certificate? Or if it is in the works to be reclaimed? The realtor is coming across as a dolt

AER (Alberta Energy regulator) or alberta surface rights board will be able to point you in the right direction.