Resources for Producers With Lexin Resources Ltd. Surface Leases

 
  From the June 5, 2017 Issue of Agri-News
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 Jeana Schuurman, rural engagement and communications specialist with the Farmers’ Advocate Office (FAO), has seen an increase in landowners seeking clarification on what happens with their lease with Lexin Resources Ltd.
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“In March 2017, the Alberta Energy Regulator (AER) suspended all licences belonging to Lexin due to concerns about the company’s ability to safely manage its sites. This was the largest licence suspension in Alberta’s history,” says Schuurman, “Some landowners may be more familiar with Lexin by some of its former names: Compton Petroleum Corporation, MFC Industrial Ltd., or MFC Bancorp Ltd.

“Lexin was placed into the receivership process at the end of March. In the receivership process, Lexin’s assets will be sold to cover unpaid debts,” Schuurman explains, “The receivership process serves the interest of secured creditors first. Landowners are not secured creditors.”

On the question of what happens next, the FAO is advising landowners that there are two potential outcomes. “A landowner’s lease site could be sold to another company during the receivership process. Sites that are not economically viable will move towards reclamation, either by a company with an interest in the licence known as a Working Interest Participant (WIP) or by the Orphan Well Association,” says Schuurman.

“In either case, a landowner with an unpaid lease should apply to the Surface Rights Board (SRB) for a Recovery of Rentals.” Schuurman says “Under section 36 of the Surface Rights Act, the SRB has the power to terminate a company’s rights to the site and direct payment from General Revenue.”

The FAO is providing landowners with the following tips concerning the SRB process:
  • There’s no retrospective time limit on the Recovery of Rentals process, so a landowner who did not receive their payments from Lexin, Compton, or MFC in previous years can make applications to the SRB. Each year is a separate application.
  • Since Lexin is in receivership, there is a stay on proceedings, which means the SRB can’t proceed on applications for unpaid rentals until the receivership process concludes. Landowners need to be aware that they will face delays in receiving payment from the SRB.
  • Applications for unpaid rentals with the SRB do not automatically renew each year. If you have applied to the SRB for an unpaid rental and another unpaid year has passed, you must resubmit forms to the SRB for that year.
  • Landowners who don’t have copies of their original surface leases should call the SRB to talk about how to best substantiate their claim.

For more information, see What Happens Next With my Lexin Resource Ltd. Surface Lease?

The FAO can be reached through the Ag Info Centre at 310-FARM (3276) or at farmers.advocate@gov.ab.ca.
 
 
 
 
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For more information about the content of this document, contact Ken Blackley.
This information published to the web on May 11, 2017.