Why should you spend your scarce capital on abandonment and decommissioning activities today instead of waiting for the next up-cycle? Natural instinct of operators in the Western Canadian oil & gas market of the past few years has been to put every hard-earned dollar into increasing production and reserves. ELM Inc. would suggest that now is the time to actively manage your abandonments and decommissioning obligations.
Asset retirement obligation (“ARO’s”) is a material issue for governments, regulators, financial institutions and operators. Governments and Regulators may be forced to mandate quotas if industry does not dramatically increase the pace of liability retirement. Operators that actively manage the liability side of their business will have a competitive advantage over their peers, by lowering their ARO and increasing their cash flow
The costs to complete field work as part of an environmental liability management program are lower in today’s market than they were in the over-heated markets we have seen in the past. With the lack of egress from the Western Canadian Sedimentary Basin and the deep crude oil price discounts we are experiencing in Canada, the economics of bringing on more production, in many cases are economically challenging.
Here is why you should choose ELM Inc. to help you assess your liabilities and manage your abandonment, decommissioning and reclamation & remediation requirements?
End-to-End Service Delivery, Elm Inc. offers “single-source” environmental liability management service in the areas of well abandonment, facility & pipeline decommissioning, reclamation, remediation, water & waste solutions. We can help you optimize your Liability Management Rating (“LMR”) in the short and long term and drive down your ARO. ELM Inc. works with management team to prescribe and implement a liability management program with a goal to reducing liability and eliminating security deposits.
Area Based Closure, ELM Inc. can facilitate and manage your project as part of an area-based asset retirement campaign for multiple operators thereby driving down costs on a per well basis. Area Based Closure (“ABC”) is a collaborative, cost-effective, flexible approach to regulatory closure that is being embraced by the AER and promoted by the oil and gas industry. This ABC can result in cost savings of up to 40% when working with ELM Inc.
ELM Inc. is the only supplier in the abandonment, decommissioning business to offer an exclusive “Cost Cap” solution. With our global environmental and risk solutions partner, ELM Inc. has created a proprietary cost overrun insurance offering.
ELM Inc. can offer a cost certainty element in their programs to ensure a simple cost overrun solution if the project exceeds estimated values by up to 100%. This Cost Cap solution provides protection against unknown complications that can occur during the well closure for the estimates above and beyond standard duty of care as environmental professionals and can provide the owner with a full cost overrun solution. This in turn allows operators to cap their cost exposure, provide management and board of directors an insurance that their capital exposure can be mitigated relative to the program cost.
Effectively managing your LMR and ARO through the reduction of your liabilities is another way to add value for your shareholders. For more information on ELM Inc.’s services please visit our website at elminc.ca