How we’re using LLR well data to assess Canadian oil and gas producers

New tools have been developed to help Canadian oil and gas producers measure more easily the impact of LLR regulations on well operations and potential asset deals.

Recent changes in Alberta to how the Licensee Liability Rating is applied bring into focus the importance of these regulations in an economy where assets may be under threat.

You’re likely aware that LLR programs ensure costs to suspend, abandon, remediate or reclaim a well, facility or pipelines are not borne by the public if a licensee becomes defunct. To fulfill LLR regulations, the value of an operator’s ongoing assets must outweigh any abandonment/reclamation costs.

We’re using a new tool that allows us to quickly calculate the LLR for individual and clusters of wells. The CanOils Assets LLR data, a new standard addition to every CanOils Assets subscription, also allows us to easily measure how a potential asset purchase or sale could alter a company’s LLR position.

[maxbutton name=”LLR-Demo”]

CanOils Assets LLR data includes deemed assets and liability estimates for wells in Alberta, Saskatchewan and British Columbia. This degree of data transparency is excellent for business development and the service and supply sector. We’ve been using the data for pro-forma analysis of M&A transactions and to identify companies in need of abandonment or reclamation services.

For a more detailed look at how the CanOils Assets LLR data can benefit business development, click here for a short case study, which includes pre- and post-transaction LLR estimates for Canada’s biggest deal of 2016.

We’ve also been reviewing the CanOils Corporate LMR Summary module. This module delivers the LMR ratio for all companies as reported by each provincial regulator (AB, SK, BC). For SK, this includes the value of any security deposits provided. Importantly from a business development perspective, the tool can help us find companies whose LMR ratios may be problematic. We’ve found this data especially useful in conjunction with our regular financial reporting. To learn more, click here.

Related links:

• CanOils Assets LLR – Book a demo
• CanOils Assets LLR for Business Development – Download our case study
• Alberta’s liability rating system is making it harder for smaller oil and gas producers (Oct. 26, 2016)
• The AER issued a chilling announcement on the first day of summer (June 22, 2016)