By Jessie Weisner

ABANDONING 2000 GAS WELL

City of Medicine Hat to abandon 2000 gas wells by 2022

Sep 11, 2019 | 10:30 AM

A major announcement today from the City of Medicine Hat regarding the future of hundreds of gas wells. According to a release, the City is speeding up it’s abandonment and reclamation of uneconomic gas fields.

By the end of 2022, 2000 currently producing wells will be abandoned. A decrease in activity means jobs within the Natural Gas and Petroleum Resources division (NGPR) will be impacted, though it’s unknown how many. The release says the City is working to redeploy affected staff, and remaining NGPR staff will focus on reclamation efforts, and oil field production at the Northeast gas field.

The City says this decision follows an extensive four-year process to find efficiencies and new opportunities in a depressed oil and gas market.

It involved exploration for new wells, disposing non-core assets, and searching for other revenue streams like helium and lithium.

The small amount of oil and gas discovered, along with low gas prices and the financial risk of helium production is too significant for the city to continue operating the wells, according to the release.

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“Our exploration program found some oil and some gas and even helium – just not enough of it,” said Commissioner of Energy and Utilities, Brad Maynes, in the release. “And a sustained pricing recovery in natural gas is not expected in the foreseeable future.”

The release adds a small team will continue with NGPR, exploring options for financial improvements.

“Over the past forty years, the City’s oil and gas assets provided over $600 million to the City coffers.” Maynes stated the decision to roll back activity was not taken lightly by city officials.

“We have worked hard for years to make the division profitable again, but this is a market phenomenon happening across North America – this is the new normal,” said Maynes in the release. “I want to thank all of our dedicated NGPR employees and consultants who have worked so hard over the last four years to find efficiencies in our business and comb the area for new discoveries. I also want to thank current and past City Council for their support in our drive to return profitability to our City’s gas division.”

Residential and business gas supply will not be affected by the move. The City says steps are being taken to ensure a continued flow of supply for decades to come.

The subject will be discussed more in depth at the next City Council meeting on September 16.

More to come..