AER Announces Updates to Directive 011, Industry Parameters and Liability Costs

On June 26, 2024, the Alberta Energy Regulator (AER) announced updates to Directive 011, Industry Parameters and Liability Costs, following its information session on June 13. This release marks the beginning of scheduled updates to the Liability Management Framework (LMF) and the planned removal of the Liability Management Rating (LMR) and Licensee Liability Rating (LLR) in October 2024.

This initial phase of the AER’s proposed two-year update to industry liability estimates focuses on revising well abandonment costs across Alberta. The proportional adjustments in tubing and rod well abandonment costs by geographic area are detailed in the map below.

360 Engineering & Environmental Consulting has conducted a comprehensive review of the updated Directive 011 values across geographic areas and completion types. This assessment included benchmarking against 360’s proprietary data and internal Asset Retirement Obligation (ARO) methodologies. Feel free to reach out if you would like to discuss the implications of these updates.

Graeme Hawkins
Manager of Asset Retirement Obligations

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