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'Deliberate' contravention nets oil and gas company $40,000 penalty

B.C.’s energy regulator ruled the company must pay the administrative penalty for failing to properly manage several gas wells.
A natural gas drilling rig at dawn in British Columbia.

B.C.’s energy regulator has handed an oil and gas company a $40,000 penalty for failing to properly manage several gas wells.  

The incident stems from April 23, 2020, when the British Columbia Energy Regulator (BCER) ordered Tallahassee Exploration Inc. to suspend, reactivate or abandon 20 wells. 

The Calgary-based company said it would need more time to comply and bring eight of the wells into production. The BCER gave the company until the end of March 2021. But when the time came, the company asked for another extension, which it also failed to meet. 

According to its LinkedIn profile, the company describes itself as a junior oil and gas company that “mainly focuses on acquiring undervalued and/or mismanaged oil and gas producing assets in AB, BC and SK.”

In his Jan. 15 ruling, the BCER’s executive vice-president of safety and compliance Andy Johnson said paying for closure obligations is the cost of participating in B.C.'s regulated oil and gas industry and is not something that should be paid for through public funds. 

Johnson noted Tallahassee Exploration Inc. had not been in breach of regulatory rules in the past and that the magnitude and gravity of the contravention was low. 

Companies found in breach of BCER regulations can face up to a $500,000 administrative penalty. The amount decided is based on several factors, including the gravity and magnitude of the act, whether it was a repeated violation, how much harm resulted from it, and whether the contravention was carried out on purpose.

“There is evidence demonstrating that the contravention was deliberate,” wrote Johnson.

“The evidence is insufficient to establish whether [Tallahassee Exploration Inc.] derived any economic benefit from this contravention.”