Strategic Oil and Gas: who holds the licence at Cameron Hills after the receiver

On September 4, 2019, Strategic Oil and Gas Ltd. notified the territory's oil and gas regulator, through the spill line, that its Cameron I-73 well was leaking gas through the surface casing vent; a week later it reported that the gas was sour, at 640 parts per million of hydrogen sulphide. Pauline de Jong, then chief conservation officer of that regulator, the Office of the Regulator of Oil and Gas Operations (OROGO), deposed that hydrogen sulphide "is considered immediately dangerous to life and health at levels of 100 ppm or higher." The company's October attempt to repair the leak failed, in part for lack of access to water to kill the well ("the water was frozen at that time of year"), and on October 19 it fitted a scrubber that OROGO approved as a temporary measure only, rated for temperatures down to minus 40 degrees, per the Affidavit of Pauline de Jong, Jan. 28, 2020, paras. 1, 14–19.

Her affidavit, affirmed on January 28, 2020, answered the company's own account. A transition plan in Strategic's CCAA proceeding stated Strategic's intention to "defer previously scheduled suspension and abandonment work," and its chief operating officer had sworn that "all of Strategic's property is in a safe state." OROGO did not agree. It named three wells, I-73 among them, that it said were not suspended in compliance with its guidelines, and it pointed to the order it had issued on October 4, 2019 for the abandonment of the field's wells, per the Affidavit of Pauline de Jong, Jan. 28, 2020, paras. 2–9. On January 28, 2020, on the application of GMT Capital Corp., Justice K.M. Horner of what was then the Court of Queen's Bench of Alberta appointed Alvarez & Marsal Canada Inc. receiver and manager of what Strategic Oil and Gas and its subsidiary Strategic Transmission Ltd. held in the territory, under s. 243 of the BIA and s. 13(2) of the Judicature Act, and KPMG Inc. as a separate receiver of the rest, per the Fifth Report of the Receiver, July 31, 2026, paras. 1, 3–4, 16 and the Application by the NWT Receiver, July 31, 2026, paras. 5–6. A&M was appointed, its first report says, at the request of the territorial government, per the First Report of the Receiver, Nov. 9, 2020, para. 1.

Six and a half years later, A&M has asked to be discharged. By its account the territorial government has funded the NWT receivership entirely, and the government now wants to take on what is left "without the additional layer of costs associated with these NWT Receivership Proceedings," per the Fifth Report of the Receiver, July 31, 2026, paras. 28, 69. On August 6 OROGO answered the application, returnable August 11 before Justice D.R. Mah, with a bench brief and a second affidavit from Ms. de Jong, now the Regulator designated under the territory's Oil and Gas Operations Act. It opposes the discharge unless the government first holds an operating licence and an operations authorization under that Act. The government, in a letter attached to the affidavit, says it is not eligible for the licence and does not intend to apply for the authorization, per the Bench Brief of OROGO, Aug. 6, 2026, p. 1 and paras. 4–5 and the Second Affidavit of Pauline de Jong, Aug. 6, 2026, paras. 1, 13 and Ex. "G".

A field on the books at $114,899

The receiver's statutory notice put the territorial property, on the company's books, at $114,899 in receivables and oil inventory, with the oil and gas properties themselves entered as "Unknown." The creditor list, "submitted by the Debtor without Admission," showed $15,250,000 owed to seven secured creditors, GMT among them, $3,359,441 owed to unsecured creditors, and regulatory liabilities to OROGO marked "Undetermined," per the Form 87 Notice and Statement of the Receiver, Feb. 6, 2020, paras. 2, 6 and Sched. "A". Strategic Transmission holds title to a section of pipeline that crosses the Alberta border into Cameron Hills, and many of the properties can be reached only by aircraft or, in winter, over an ice road, per the Fifth Report of the Receiver, July 31, 2026, paras. 14–18. The receiver's first report traces the company's difficulties to "the oil and gas industry downturn," per the First Report of the Receiver, Nov. 9, 2020, para. 18.

No cash was made available or transferred to the receiver from Strategic or the Alberta receiver, at the start or later, and the receiver and its work "have been funded entirely by the GNWT," per the Fifth Report of the Receiver, July 31, 2026, paras. 28, 57. The 2020 suspension program, run between February 27 and March 24, suspended three wells, one of them with a surface casing vent flow, at a cost of approximately $1.2 million that the government advanced, per the First Report of the Receiver, Nov. 9, 2020, paras. 23–25.

One bid, then a contractor

A sale process approved on July 19, 2021 reached approximately 600 parties by mail and 2,250 by email and drew one offer by its September 23 bid deadline, for some of the wells and facilities and the interprovincial pipeline, per the Third Report of the Receiver, July 4, 2022, paras. 25–31; no acceptable offer was received, per the Fifth Report of the Receiver, July 31, 2026, para. 6.

The receiver turned instead to a request for proposals for the abandonment work, designed in consultation with the government, which it called the "primary stakeholder, who will be funding the abandonment process," and approved by Justice P.R. Jeffrey on July 15, 2022, per the Third Report of the Receiver, July 4, 2022, paras. 38, 42 and the Order (Approval of RFP Process), July 15, 2022, para. 3. Six proponents submitted proposals, and an evaluation committee of the receiver and two government representatives recommended ELM Inc., which scored highest of the six in total, per the Fourth Report of the Receiver, Nov. 28, 2022, paras. 38–44. On December 8, 2022, Justice E.J. Sidnell approved the abandonment agreement among the receiver, the government and ELM and sealed the committee's scorecard and the unredacted agreement until the earlier of a further order or ten years after the agreement is completed, per the Order (Approval of Abandonment Agreement), Dec. 8, 2022, para. 3 and the Restricted Court Access Order, Dec. 8, 2022, para. 2.

Three years in the field

Between January and April 2023, ELM abandoned and decommissioned approximately 100 assets, among them 44 wells, and abandoned 24 pipelines and decommissioned 27 well sites and the large battery facility; reaching the field took 160 km of winter access roads. Testing that October found that the M-31 lease had failed; after a further downhole abandonment attempt the next winter, a July 2024 test there showed no surface casing vent flow and zero gas-migration readings. In September 2024 OROGO identified open excavations where subsidence or erosion had occurred since the work, and in December it issued a formal non-compliance order. In May 2025 ELM put up fence panels at ten locations by helicopter; in June OROGO withdrew the order on condition that the receiver inspect annually and permanently address the concerns by April 2027, per the Fifth Report of the Receiver, July 31, 2026, paras. 34, 39, 41, 45–47.

The accounts

The receiver's statement of receipts and disbursements counts government funding of $3,780,800 up to November 25, 2022 and $22,320,093 from November 26, 2022 to July 31, 2026. Payments for the abandonment program came to $22,543,787, and Obsidian Energy Ltd., a working-interest participant in some of the wells, paid approximately $2.1 million toward the work. The receiver forecasts paying its remaining fees and contractor bills and refunding the residual cash to the government, a return of $1,251,645, after which the statement's total column puts government funding at $24,849,248, per the Fifth Report of the Receiver, July 31, 2026, paras. 36, 57–61 and p. 18. The dispute over Strategic's funds was settled, the receiver understands, by an agreement among the government, the Alberta Energy Regulator and the Canada Energy Regulator in September 2025. KPMG was fully discharged on November 25, 2025, per the Fifth Report of the Receiver, July 31, 2026, paras. 4, 29.