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Bulletin 2007-01

January 23, 2007

2007 Orphan Levy

The Orphan Levy is based on the revenue requirements identified in the Alberta Orphan Oil and Gas Abandonment and Reclamation Association (Orphan Well Association) budget. The Alberta Energy and Utilities Board (EUB) will allocate Orphan Levy costs among the licensees subject to the Licensee Liability Rating (LLR) assessment of February 3, 2007.  Information on the LLR Program is contained in Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process.

This year each licensee will be invoiced for the percentage of the Orphan Levy annual budget as its deemed liability represents to the total industry deemed liability in the February 3, 2007, LLR assessment, according to the following formula:

Amount of Levy =  _A_    x   $12 000 000
                            B
where

• A is the licensee’s deemed liability on February 3, 2007, for all wells, facilities, and unreclaimed sites licensed to the licensee, as calculated in accordance with Directive 006, and
• B is the sum of the industry’s deemed liability on February 3, 2007, for all licensed wells, facilities, and unreclaimed sites, as calculated in accordance with Directive 006.

A licensee may review its calculated deemed liability at any time by accessing its LLR rating through the Digital Data Submission (DDS) program on the EUB’s Web site at www.ercb.ca.

Invoices to licensees will be mailed no later than February 12, 2007, with payment required no later than March 16, 2007. Payments received after March 16, 2007, are subject to a 20 per cent late-payment penalty. Failure to pay any invoice or late-payment will result in the licensee being issued a First EUB Notice of Low Risk Noncompliance, in accordance with Directive 019: EUB Compliance Assurance—Enforcement.

Please note that invoices for the 2007 Orphan Levy are sent to and are payable by the licensee of record at the time of the February 3, 2007, LLR assessment.

Any appeal should be sent to the attention of
Liability Management
EUB Corporate Compliance
Telephone: (403) 297-3113
Fax: (403) 297-7168
E-mail: eub.llr@eub.ca

Notwithstanding the filing of an appeal, payment of invoices is required by March 16, 2007, with subsequent adjustments applied as needed following consideration of the appeal.

Questions regarding this bulletin should be directed to Hugh Bourgeois at (403) 297-4205 or Holly Elliott at (403) 297-3587, Corporate Compliance Group, Compliance and Operations Branch.

[Original signed by]

D. K. Boyler, P.Eng.
Executive Manager, Compliance and Operations Branch