Refer first to (will be interesting to see who gets discovery documents first, Ernst or AER):
2017 04 04: How many years will it take for Encana to heed Alberta’s Rules of Court and respect the parties’ 2014 agreed-upon Protocol for Electronic Discovery?
Case “Management” Alberta Style!
Klippenstein’s April 4, 2017 letter to Encana’s lawyer, Maureen Killoran with Osler, on the company still not having filed with Ernst appropriate records for discovery that heed Alberta’s Rules of Court and the agreed-upon Protocol for Electronic Discovery (that cost Ernst significant funds negotiating with Encana to reach agreement on in 2014).
Deadline for Encana’s filing was ordered by Chief Justice Neil Wittmann to be no later than December 19, 2014. From the letter:
I am writing regarding your letter of May 4, 2015 and my letter of March 27, 2015. We have waited nearly two years now and still have not been provided with any of the promised updated .csv format List of Records, or updates of the pdf’s of the records themselves and remain waiting for a satisfactory response to the other concerns raised.
In my letter, I raised serious concerns regarding Encana’s failure to meet its legal obligations regarding the disclosure of records in this action. I understood from your letter that we would shortly expect both an updated .csv format List of Records, and updates of the pdf’s of the records themselves. We have heard nothing further from you.
As stated in the conclusion of my letter of March 27, 2015, given the nature, number and seriousness of these deficiencies, the only solution must be for Encana to redo its disclosure of records in a manner that complies with the Alberta Rules of Court and the agreed-upon Protocol Regarding Electronic Discovery. If we do not receive the complete, cleaned-up and appropriate disclosure of records by May 30, 2017 in a manner that complies with both Encana’s obligations under the Alberta Rules of Court and the protocol agreed upon between the parties, my client will bring an application for a further and better affidavit of records. I note that Encana has already had more than two years to provide an appropriate response to our serious concerns regarding Encana’s affidavit of records, and has to date failed to do so. [Emphasis added]
Lexin Resources documents recovered from women’s washrooms, garbage bins as AER suit heads to appeal by Geoffrey Morgan, April 5, 2017, Financial Post
CALGARY — The Alberta Energy Regulator is suing insolvent Lexin Resources Ltd. to recover money it is allegedly owed, while the company’s receiver claims in a report that it is working to recover Lexin documents from garbage bags, a storage locker and even a women’s washroom.
Borden Ladner Gervais partner Robyn Gurofsky, acting on behalf of Lexin’s court-appointed receiver Grant Thornton LLP, asked an Alberta Court of Queen’s Bench judge Tuesday to approve a plan, negotiated with Lexin’s lawyers, for the handover of various recovered documents so the receiver can prepare Lexin’s assets for sale.
Gurofsky said the receiver must have the records to establish a data room and drum up interest for asset sales.
The negotiated plan will allow Lexin’s legal team to review documents in a limited period of time and then hand over documents not subject to lawyer-client privilege. Any records relating to emergency procedures or safety, however, would be immediately released to the Alberta Orphan Well Association (OWA).
Lexin was a relatively small natural gas producer in southern Alberta but its insolvency has outsized implications because it owned 1,514 well licenses — many in partnership with 51 other energy companies — which could now become the responsibility of the OWA and double the number of wells under agency management.
The AER took the unusual step of pushing the company into receivership and is now demanding damages from the company. Lexin is appealing the AER decision with a hearing scheduled Wednesday. The AER’s amended statement of claim asks for $1 million plus “any amounts owed to the Orphan Fund.”
The claim also repeats the allegation, reported by the Financial Post, that Lexin owes the AER $70 million in deposits for well liabilities.
“It is not open for a licensee, when times get tough, to transfer the burdens associated with holding AER licenses to the AER and/or the OWA, which is exactly what Lexin is attempting to do here,” the AER’s suit alleges, adding that Lexin is trying to “fob off” its responsibilities. [So? The AER enables that for all companies!]
The AER and receiver, Grant Thornton, declined to discuss the document recovery process, citing Tuesday’s court application.
A receiver’s report, filed with the Court of Queen’s Bench of Alberta on March 30, claims Lexin’s documents were recovered in various unusual places.
“The receiver notes that there are entire rooms, including the women’s washroom, containing an estimated 1,000+ banker’s boxes and filing cabinets, presumably containing Lexin records,” the report states.
The report also says the receiver learned Lexin had records stored in a storage locker in a southeast Calgary neighbourhood three days before the lease on the storage locker was set to expire. The receiver has since taken possession of the locker.
The Alberta Energy Regulator also has Lexin records it seized from offices in downtown Calgary “located either in the garbage or strewn about on shelves,” and six racks of disassembled computer servers. [Ernst expects Encana’s documents related to the company illegally fracturing Rosebud’s drinking water aquifers, and chats with AER about how to cover it up and get to keep frac’ing the fresh water zones at Rosebud, were shredded years ago. And how many of the documents relevant to the Ernst lawsuit against Alberta Environment did the regulator shred in 2015? Or perhaps Encana shredded those for the regulator?]
The report noted the documents are currently being stored in garbage bags and Lexin’s legal team has asserted lawyer-client privilege claims on the items recovered from the office.
It also says the receiver is visiting other Lexin field offices to locate any additional files. [Emphasis added]
[Refer also to:
2016 01 07: Shred Fraud? “Better Shred than Read!” Tory Cover-up Saga Continues: Document shredding rules not followed by Alberta Environment, investigation finds. “344 boxes of executive records were destroyed between May 1 and May 13,” including related to litigation ]
Comment to the article below:
I thought 40 plus years of conservative rule in Alberta provided enough examples of colossal stupidity. This one is the worst to date.
Ralph Klein’s multibillion dollar liability is about to blow up in Alberta’s face by Regan Boychuk, April 3rd 2017, National Observer
#2 of 2 articles from the Special Report: Legacy of liabilities
Anxiety was running high among oil and gas industry executives after a stunning court ruling in 1991.
In the June 12, 1991 decision, a panel of Court of Appeal of Alberta judges unanimously ruled that “abandonment of oil and gas wells is part of the general law of Alberta enacted to protect the environment and for the health and safety of all citizens.”
The responsibility to properly abandon a well was binding on all who became licensees of oil and gas wells, even in bankruptcy.
The ruling came to be known as the Northern Badger case.
The anxiety it triggered was profound, but it was replaced with a newfound confidence after an unexpected boom in oilpatch activity and Ralph Klein’s swearing in as Alberta premier in December 1992.
Under Klein, the Orphan Well Association was established. Wells are called “orphans” when there is no solvent entity to carry out abandonment and reclamation responsibilities. This industry-funded organization saw the already enormous problem of old wells multiply.
With Klein calling the shots, the oilpatch effectively escaped accountability for billions of dollars in reclamation obligations in exchange for merely plugging some wells after companies disappeared. In fact, the Orphan Well Association has only reclaimed about 700 sites in more than 15 years.
And today, Klein’s environmental liabilities are about to blow up in the face of Albertans.
Environmental liabilities passed around like hot potatoes
The overwhelming obstacle to industry accountability is the fact that these environmental liabilities have cascaded down from the companies that profited from the wells, and can afford to reclaim the well sites, to smaller and smaller companies that lack ability to meet the reclamation obligations.
A joint government/industry committee reported in 1992 that new companies with “inadequate financial resources to meet future well-abandonment liabilities” were taking responsibility for wells from established companies. In some cases, “well-licence transferors have disposed of valuable assets, leaving only liabilities within a corporate shell and thereby generating future orphan wells.”
And regulators weren’t duped; they didn’t just look the other way while these environmental liabilities were passed around like hot potatoes; they actively sabotaged their own regulatory programs to further facilitate this downloading of risk.
The only program that even began to address abandonment and reclamation with any real enforcement was the Long Term Inactive Well Program (LTIWP) launched, after considerable delay, following the 1997 election. With enforcement provisions that scaled up to legal action, the LTIWP was a five-year plan to safely plug wells that had been inactive for more than a decade.
It had some success in its first year, but as enforcement escalated in the second year, regulators lost their nerve. [or got bought off?] A second progress report was never produced and a dramatic change was announced in the third year. The Base Well Count assigned to each producer was supposed to be unchangeable. Regulators then let it be manipulated so companies could shift wells to smaller and smaller companies.
The rule change completely undermined the program’s objectives and allowed industry to game the program and loot it of deposits companies paid for well abandonment costs that could otherwise be left to taxpayers. Outrageously, regulators actually demonstrated to companies how to do so.
Six months later, with another election approaching, the program was cancelled – locking in the refunded deposits enabled by the rule change and relieving industry of any real obligation to so much as plug wells sitting dormant for decades.
Fading wells transferred so many times, basic information has been ‘lost’
The LTIWP was replaced in 2000 with the Licensee Liability Rating (LLR) system to calculate the amount of security deposits a company must provide to regulators to cover some of the costs of abandonment and reclamation that bankrupt licencees have left to taxpayers.
It literally took me all of five minutes of reading the regulatory directive on the formula used to calculate the deposits, to recognize the LLR program as a multi-layered charade that has cloaked Alberta’s growing mountain of environmental liabilities for more than 15 years.
Deposits are calculated on the difference between a company’s ‘deemed liabilities’ and ‘deemed assets.’ However, ‘liabilities’ are grossly underestimated and exclude more than 430,000 kilometres of pipelines, while ‘assets’ are exaggerated by grouping almost two million barrels of daily bitumen production in with the fading production of aging conventional crude and gas producers.
But the single biggest factor distorting the LLR program is the fact that current profitability is not used to calculate ‘assets.’ Despite clear wording, regulators are not using a three-year rolling average like their directives suggest.
Instead, regulators are still using a measure of industry profitability from 2008-10 (when both oil and gas prices were dramatically higher) to calculate ‘deemed assets’ – inflating the ‘asset’ side of the ratio significantly to spare producers from having to pay deposits on even a small fraction of their liabilities.
What’s more, in 2000, the Klein government had freed oil executives from liability. As further demonstration of their gross negligence, Alberta regulators made this gob-smacking admission in 2004:
“During the last 15 years, property sales were very high and many of these inactive wells were transferred numerous times. With the sale of these wells, knowledge of wellbore conditions, and in some cases even knowledge of the well’s existence, was lost.”
The law as a weapon against Albertans and the environment
In early 2015, Alberta was well into the current decline in oil prices and new Progressive Conservative leader Jim Prentice was campaigning to further intensify austerity and permanently remove resource revenue from the annual budget, instead placing an increasing share of the paltry sum still collected into the Heritage Savings Trust Fund.
A spotlight was about to shine once again on who should pay when a company wants to walk away.
Redwater Energy was a small company with more than 100 inactive wells and $5 million in debts to Alberta Treasury Branches (ATB Financial), a provincial Crown corporation.
ATB expressed confidence that its loans to Redwater Energy would be repaid in full – despite lower commodity prices and despite being fully aware of the company’s reclamation liabilities.
Suddenly, one week after the surprise election of the provincial New Democratic Party, however, ATB forced Redwater into receivership. And one week after ATB CEO Dave Mowat was appointed chair of the new government’s promised royalty review, the regulator was informed that Redwater’s inactive wells were going to be left for someone else to clean up.
ATB intended to sell the company’s active wells to pay itself back the millions it lent Redwater in 2013 and was relying on a clause inserted into federal bankruptcy law in 1997 to counter provincial regulators’ insistence that it was responsible for all of Redwater’s wells, not just the profitable ones.
Redwater Energy court ruling lets company off the hook for well cleanup [all enabled by the AER to set horrific legal precedent for companies across Canada to escape liability?]
In the midst of the royalty review in October 2015, ATB applied for the appointment of a trustee to liquidate Redwater’s active wells while it defied the regulator’s abandonment and closure orders for the inactive wells.
The 2016 Redwater Energy case was a virtual replay of the 1991 Northern Badger case – except the outcomes were polar opposites. Where it was earlier recognized that environmental cleanup had a super-priority over lenders and that companies were jointly and severally liable for environmental obligations, in 2016, Alberta’s chief justice ruled that banks came first and Redwater could not be forced to clean up its mess.
The Redwater decision was the culmination of two decades of the industry downloading its risk, and of legislators effectively rendering polluters and their bankers immune from the environmental consequences of their profit.
The key difference between the 1991 and 2016 court cases was that the federal Bankruptcy and Insolvency Act (BIA) had been amended in 1997.
“The most important substantive change,” wrote environmental legal scholar Dianne Saxe, “is that trustees (including receivers) have the qualified right to abandon contaminated property. When that property has been abandoned, the trustee cannot be required to comply with any remedial order relating to that property.”
Saxe noted the 1997 BIA amendments failed to distinguish the need to prevent irreparable future harm in cases like Northern Badger from other environmental requirements lacking special reason to trump other monetary claims in a bankruptcy. Presciently, she lamented: “This is most unfortunate, and will lead to unnecessary hardship, injustice and waste.”
[Has there ever been “justice” in rape & pillage Canada, when it comes to pollution and harms, including financial, by the oil and gas industry?]
“In an ideal system,” Saxe added, “bankruptcy priorities would reflect a functional analysis: urgent claims to prevent future harm to significant public interests would take priority over mere monetary claims… This is not, however, the approach taken in the  Bankruptcy and Insolvency Act provisions.”
“Flies in the face of any conception of the polluter-pays principle”
The impact of the amendments “provides an incentive to failing companies to dishonor environmental orders,” lawyer Alexander Clarkson wrote in the University of Toronto Faculty of Law Review.
Clarkson, along with Nicholas Chaput, are among the very few specialists to have studied the environmental super-priority in depth.
Resource extraction industries often rely heavily on debt financing, “Therefore, when commodity prices fall, the solvency of the company falls dramatically and the company is quickly unable to comply with [environmental] orders,” Clarkson wrote. The secured lenders could obtain a receivership order and remove whatever the remaining value that could have gone to environmental cleanup.
Which brings us back to Redwater Energy and the government-owned ATB.
The 2016 decision by Alberta’s chief justice “flies in the face of any conception of the polluter-pays principle,” says Nigel Bankes, University of Calgary Chair of Natural Resource Law.
“Any effort to restore the pre-eminence of the polluter pays principle will require statutory amendments [and] changes in regulatory practice. The most obvious candidate for amendment is the BIA itself but this may well prove to be an immovable object given the desire to protect the interests of secured creditors.”
[All intentionally by AER & Alberta government – including NDP – design?]
Alberta needs a super-priority to prevent producers from escaping liability through bankruptcy, but the changes can only come federally. Because the Redwater decision has national implications, all Canadians need that super-priority to hold all polluters accountable for cleaning up mines and pulp mills in bankruptcy. Without it, polluters will simply walk away with their pockets stuffed full of money, leaving taxpayers burdened with the cost of cleanup. [That’s been the plan!]
Editor’s note: This article was updated at 8:52 p.m. PT due to an editing error to correct that the late Ralph Klein was sworn in as premier of Alberta in December 1992, more than a year after the ruling in the Northern Badger case. [Emphasis added]
Who should pay to clean up the oil patch’s Alberta mess? by Regan Boychuk, March 31st 2017, National Observer
#1 of 2 articles from the Special Report: Legacy of liabilities
The legacy of a century of oil and gas development in Alberta is much more than just riches. There are almost a half-million oil and gas wells, well over 400,000 kilometres of pipelines, and tens of thousands of assorted facilities that played a part in bringing wealth to governments, to Calgary office towers, and to regular Albertans’ pocketbooks.
But Alberta’s conventional oil and gas industry has long been mature and now is well into terminal decline, haunting the province with the spectre of cleaning up a hundred years’ poorly regulated mess.
In fact, the issue of how to reclaim many billions of dollars’ worth of environmental liabilities has grown to such proportions that I believe it is the single biggest issue facing Alberta today and threatening our tomorrow. And it could spill far beyond the province.
Last year, the oilfield service lobby asked for half a billion federal dollars to clean up old wells, but the Trudeau government demurred. Rebranded as a half-billion dollar ‘loan’ this year, the Petroleum Services Association of Canada’s request had the support of the Alberta government, but did not find it’s way into the federal budget.
Instead, the world’s richest and most powerful industry will get $30 million in federal dollars to clean up wells whose owners have gone bankrupt.
How did this problem grow so big and what can be done now, as the conventional oil and gas industry declines, provincial government royalty revenues shrink, and Albertans adjust to a life of austerity?
Northern Badger court case confirmed industry responsibility for clean up
Alberta’s oil and gas industry was dragged into the modern age on June 12, 1991. After three-quarters of a century drilling more than 100,000 wells, the oilpatch was finally going to be held accountable for its environmental liabilities.
Not only were depleted wells going to have to be safely sealed (abandoned, in the industry’s parlance) and the sites properly reclaimed, but most importantly, neither of those responsibilities could any longer be avoided through bankruptcy.
In its decision in the Northern Badger case that day, a panel of Court of Appeal of Alberta judges unanimously ruled that “abandonment of oil and gas wells is part of the general law of Alberta enacted to protect the environment and for the health and safety of all citizens.” The responsibility to properly abandon a well was binding on all who become licensees of oil and gas wells, even in bankruptcy.
Unfortunately, the good effects of the court ruling were short lived.
In the 25 years since Northern Badger, Alberta’s conventional oil and gas sector has generated over $169 billion in pre-tax profit for the enjoyment of their executives and investors.
In the same period, regulators allowed the accumulation of many billions of dollars’ worth of unfunded environmental liabilities for cleanup of hundreds of thousands of oil and gas well sites. Estimates of potential cleanup costs reach well into the hundreds of billions of dollars.
Reclaiming an oil or gas well site to near the land’s original capacity involves much more than simply plugging the well. Spills and leaks must be remediated, access roads dug up, and top soil replaced. Risks include contamination of soil and groundwater.
The cost of plugging a well runs into the tens of thousands of dollars, assuming no complications. The cost of remediating a well site, however, can easily run into the hundreds of thousands. When significant leaks or complications are encountered, the cost can reach into the millions for a single well.
Oil and gas industry pre-tax profits 1991-2015 total of $169 billion is based on value of production minus exploration/development/operating costs minus royalties and land sales. Excess pre-tax profit totals $125 billion after subtracting a 10-per-cent profit. Statistics source Canadian Association of Petroleum Producers
Environmental clean up should have priority over all claims in a bankruptcy
The Badger case was the first time Canadian courts considered the intersection of bankruptcy and the environment. Northern Badger Oil & Gas Ltd. had declared bankruptcy and sold all but seven depleted wells to pay off creditors.
The Energy Resources Conservation Board, Alberta’s regulatory authority at the time, ordered the bankruptcy receiver to carry out proper abandonment procedures, safely sealing the seven wells at a cost of more than $200,000.
The court case hinged on whether the Bankruptcy Act requires that the assets in the estate of an insolvent well licensee should be distributed to creditors, leaving the bill for duties of environmental safety – such as safely abandoning and reclaiming depleted wells – up to the taxpayer. The court had to determine whether the bankruptcy receiver had to obey the regulatory order.
In lower court, Justice Jack MacPherson decided environmental cleanup took a back seat to the banks.
“This was incorrect,” the highly regarded legal scholar Dianne Saxe wrote at the time in the Windsor Review of Legal and Social Issues. Saxe, who is currently the Environmental Commissioner of Ontario, explained why it was fortunate the appeals court reversed his ruling:
“The logical conclusion of the Justice’s argument would be that a trustee in bankruptcy could ignore all provincial statutes if they would thereby save money, including dumping hazardous waste in a school yard if that were cheaper than using licensed disposal sites as required by provincial legislation.”
Landowner Jim Robins says Lexin Resources left a large pool of oil that his dog bathed in on hot days in August 2016. His property leased by Lexin is near Blackie, about 70 kilometers southeast of Calgary. Photo courtesy of Jim Robins
Ruling sent shock waves through oil and gas industry office towers in Calgary
In the appeal court ruling, Alberta Chief Justice Herb Laycraft concluded that a well licensee’s compliance with environmental orders could not be based on whether it might affect distribution of funds to creditors under the Bankruptcy Act.
Those holding well licenses “cannot pick and choose as to whether an operation is profitable or not in deciding whether to carry it out,” the chief justice wrote. “If one of the wells… should blow out of control or catch fire, for example, it would be a remarkable rule of law which would permit him to walk away from the disaster saying simply that remedial action would diminish distribution to secured creditors.”
The Supreme Court of Canada confirmed the ruling by refusing to hear an appeal by industry.
Alberta’s Appeals Court made clear that, in effect, environmental cleanup should enjoy a super-priority over even secured lenders to ensure regulatory obligations were respected in bankruptcy.
Alberta regulators interpreted the ruling to mean they had the power to hold companies jointly and severally liable to clean up their mess. If a company couldn’t cover the expense, regulators could go after its executives. And if those executives couldn’t cover the costs, regulators could go after the company that sold them the wells and their executives.
That threat of accountability sent shockwaves through corporate office towers in Calgary and beyond. By the next summer, the Globe and Mail was warning that “quitting the board could become a growing trend among directors who are becoming increasingly concerned they will be held personally liable for financial commitments their companies are unable to meet.”
Oilpatch executives didn’t have to worry for long though. Regulators relinquished their power to protect Alberta taxpayers and the environment not long after the courts confirmed they had it.
“You can’t just drill wells and walk away from them”
Alberta had a real super-priority for a year and a half, from the Northern Badger decision until December 1992 when the new Progressive Conservative premier Ralph Klein struck a deal with industry to subvert it.
But before it was traded away, the super-priority was having a significant effect on how industry was operating.
By the time 1991’s corporate annual reports were due, the Canadian Institute of Chartered Accountants was insisting individual companies acknowledge their share of many billions in reclamation costs. “It’s certainly going to hurt,” the regulator’s manager of drilling and production John Nichol said at the time. “But that’s the oil and gas business. You can’t just drill wells and walk away from them.”
“New posses of environmental private investigators are fanning out to catch industrial polluters and make them clean up messes,” the Calgary Herald reported a year after the decision. “Bankers, calling the crackdown self-defense, lead teams of experts such as engineers, soil scientists, water and air quality labs in a dragnet called environmental audits and due diligence. The policing kicks in every time loans are sought for projects or property sales. Loans are refused unless cleanups are done, under stern new standards crafted for the financial community by the Canadian Bankers Association.”
By November, the newly-combined oilpatch lobby – the Canadian Association of Petroleum Producers – had released a comprehensive report on how to meet provincial environmental guidelines and clean up polluted land and tear down unused facilities. Organizers expected between 80 and 100 for a seminar explaining their report; more than 320 showed up. Interest was described as phenomenal.
And then, Premier Klein brought it all to an end. [Emphasis added]
Major oil companies caught in orphan wells crisis as tiny Lexin Resources goes insolvent by Geoffrey Morgan, Financial Post, April 3, 2017, Calgary Herald
CALGARY – Major Canadian oil companies could face tens of millions of dollars in liabilities as a result of tiny Lexin Resources Ltd.’s insolvency and its inability to clean up over 1,500 oil and gas wells in Alberta, which has doubled the number of orphan wells in the province.
Receivership documents reviewed by the Financial Post show 51 companies – including major Calgary-based producers Canadian Natural Resources Ltd., Exxon Mobil Canada and Husky Energy Inc. – may be held at least partially liable for Lexin’s wells as a result of their ownership in some of those assets.
These companies were copied on correspondence between the Alberta Energy Regulator and Lexin before the regulator took the unprecedented step of pushing Lexin into receivership because the company failed to comply with multiple regulatory orders. Lexin has a complicated ownership structure but which the AER believes is a subsidiary of Vancouver-based MFC Bancorp, a publicly listed company. MCF did not respond to a request for comment.
AER spokesperson Tracie Moore said the regulator normally holds the existing licensee and its partners – in this case, Lexin and the 51 energy companies – responsible for reclamation work but “there are instances where the AER may consider pursuing previous operators.”
Lawyers and consultants say Lexin’s situation is the result of a wider problem in Alberta, where major oil and gas producers defer the liability to clean up their non-producing wells indefinitely or sell off the wells and a portion of the liability to smaller producers like Lexin.
“It’s common practice in the industry to package up non-producing wells, dry holes, wells that are problematic, with a few really nice good wells and then sell them to a smaller or medium-sized company,” said Keith Wilson, an Edmonton-area property rights lawyer.
Wilson said Lexin’s case will be the biggest example so far of how that practice can leave an environmental mess when the smaller company becomes insolvent. Lexin’s insolvency documents do not show which companies previously owned and operated Lexin’s wells.
Laura Chant, an insolvency management specialist at the AER stated in an affidavit that Lexin’s case was unusual because of the massive number of wells that could be orphaned. Lexin held licenses for 1,380 operational wells, 134 abandoned wells, 81 other facilities and 201 pipelines. She also said Lexin did not comply with an AER order to post more than $70 million as a security deposit for its well liabilities.
Lexin’s licenses have all been added to the Orphan Well Association list, roughly doubling the quantity of wells and facilities under management by the association.
Chant’s affidavit stated that Lexin did not pay two Calgary-based producers, Crescent Point Energy Corp. and Pengrowth Energy Corp., royalty and other payments last year and the companies took control of operating some of Lexin’s properties in response. In Crescent Point’s case, the company took control of certain wells to ensure they operated safely.
Crescent Point president and CEO Scott Saxberg said the Lexin wells his company has interests in represent a tiny fraction of the company’s total, and therefore wouldn’t affect its decommissioning liabilities. Some of the Lexin wells Crescent Point partially owns, he said, are capable of producing and would not need to be plugged and reclaimed yet.
Saxberg said he couldn’t speak to how other companies handle their clean up responsibility, but said the company allocates 35 cents from every barrel of oil it produces to well remediation, and that Crescent Point has spent money cleaning up well sites left in disrepair from previous owners after its own acquisitions.
“We feel the cost of these abandonments is going to rise over time,” Saxberg said, adding that his company follows a “clean as you go policy.”
Caledonian Royalty Corp. president Charles Selby said his company also had royalties and liens on many of Lexin’s wells and Lexin failed to pay Caledonian. “They had promised to bring us up to date and pay what was owed to us but that never occurred,” Selby told the Financial Post.
Caledonian and other oil and gas producers are evaluating whether it’s possible to resume operations at Lexin’s shut-in wells and reduce the potential liability for the OWA. “There are a number of wells in the (southern Alberta) area that are capable of commercial production,” Selby said.
Pengrowth did not respond to, and Canadian Natural and Husky declined, requests for comment on how the Lexin case could add to their decommissioning liability, a publicly disclosed measure of an oil and gas company’s responsibility for remediating their wells.
Exxon Mobil Canada spokesperson Todd Spitler said in an email, “We are currently assessing impacts, but will not speculate on potential impacts or timelines, as it remains a matter before the courts.”
Grant Slezak · Calgary, Alberta
This issue falls directly on the shoulders of this and past Alberta Governments, the AEUB, the AER has allowed this to get totally out of control so that now, with so many oil & gas producers like Lexin, that don’t have the resources to clean up their mess. Unfortunately it will now become the resposibility of the Albertan & Canadian taxpayer. Orphan wells and abandoned wells should now and always be tied to well licensing.
Grant Slezak The oil companies should have set money aside for cleaning up these things.There should have been a deposit paid or something like it. If the wells aren’t cleaned up, the money isn’t refunded.
Cam Gall · Astronaut at The Moon
Maybe some Bombardier money could be spent cleaning up these abadoned wells….
Cam Gall Maybe the oil companies should be responsible for themselves and their abandoned wells.
Former Lexin workers raise public safety fears over sour wells near Calgary by Reid Southwick, March 31, 2017, Calgary Herald
For scores of residents across Alberta, sour gas wells have been unwelcome neighbours for decades.
The dangers of having sour wells close to heavily populated areas drove Marilynn Christensen to help wage a successful campaign in 2005 against one company’s proposal for four new sour wells on the outskirts of Calgary.
Still, Christensen and her husband continue to live less than 10 kilometres from existing sour wells, which were controlled by Lexin Resources Ltd. until the company was shut down by a provincial watchdog last month.
She’ll be closely watching what happens to those wells, which she believes should be plugged and sealed, arguing “the population is worth more than what’s in the ground.”
“If there was a blowout in those wells, New Brighton, Legacy — all of those areas — would have to be evacuated,” Christensen said recently.
The Alberta Energy Regulator’s rare decision to shut down Lexin came after the company raised doubts it could ensure the safety of its sour gas wells beyond mid-February. It had also failed to comply with a series of orders to properly maintain its properties.
Last week, the watchdog forced Lexin into receivership.
Former Lexin employees, who spoke to Postmedia on condition of anonymity, said they were worried the shuttered wells, especially those close to communities, could trigger massive emergencies over time without proper care or oversight.
The company itself has warned about potential dangers, cautioning there are risks that valves inside the shuttered sour wells could break down.
“A valve failure could lead to a high-pressure sour gas release, and possibly fire-related events, that may be deadly or result in critical injuries to humans and damages to the environment,” Lexin director Michael Smith wrote in a sworn affidavit last July.
The Alberta Energy Regulator and the Orphan Well Association, the industry-funded group now charged with overseeing most of Lexin’s wells, said safety of the sites is a top priority.
Brad Herald, chairman of the Orphan Well Association, said his group is likely better positioned to take care of the sour gas wells than Lexin was in recent months.
“In our industry, the hazards of sour gas are very well known, [Then why does the AER lie to concerned families living in sour gas fields, and tell them they are perfectly safe? ] both from an operations perspective and an emergency response perspective,” said Herald, whose group is assessing well sites by priority to ensure they are safe. “This is not new ground for us.”
The association considers 18 of the 1,100 Lexin wells now under its custody as high risk. Herald said all of the high-risk wells have been shut down and the pipelines have been purged of sour gas.
One of those wells is less than two kilometres from Calgary’s southeast neighbourhood of Auburn Bay, while another is four kilometres from South Health Campus, a major city hospital.
More than 3,000 barrels of sour gas were released from a well about seven kilometres from the hospital in 2014 after a tubing failure below the surface. The regulator said the failure caused numerous odour complaints — sour gas smells like rotten eggs — but that it didn’t trigger evacuations or impact wildlife and water.
According to Lexin, sour gas wells could be struck by a vehicle, which could hurt or kill the driver and cause toxic gas to spill into the atmosphere, posing fire risks and hazards for nearby populations.
Smith wrote in his affidavit, filed as part of litigation involving Lexin subsidiaries, that the company’s oil and gas wells are hit by farmers three to five times a year.
Two former Lexin workers said they believe the orphan well group or the regulator should plug and seal the high-risk sour gas wells, taking them out of production for good, due to the risks.
“As field and gas plant operators, we’re highly trained in what we do and it takes years to get familiar with the locations and familiar with your equipment,” said one source.
“It would be a huge stretch for them (the regulator and association) to step in, in an emergency situation, and respond as well as we could have as employees.”
In an interview before Lexin was forced into receivership, Herald said it was too early to determine whether the high-risk wells would be plugged and permanently sealed, adding some could be transferred to other operators.
“We’ll make plans to make sure those wells are safe,” he said.
According to the energy regulator, a remote monitoring system is in place to detect sour gas leaks at Lexin wells. If there was a dangerous leak of sour gas, a contractor would be hired to respond to the emergency.
“If we believe there is a public safety threat or imminent risk to the environment, we will take immediate action to address the situation,” the regulator said in a statement.
The watchdog has hired a security company to conduct roving patrols of six high-risk sour gas wells near urban centres. The company spends 30 minutes at each site, checking for signs of vandalism, theft and operational mishaps, before moving to the next site.
The regulator has also inspected sour gas wells near Calgary and identified no concerns. Still, the watchdog said any removal of equipment — which has been reported at some Lexin sites — “could introduce an unacceptable risk to public safety or the environment.”
The regulator has obtained a court order banning Lexin from removing equipment from its properties.
The watchdog also suspended more than 200 licenses controlled by three Lexin affiliates — Jixin Energy Inc., LR Processing Ltd. and Notine Holdings Inc. — for failing to be capable of responding to emergencies.
A court-appointed receiver is now responsible for selling Lexin’s assets, though the properties will remain in the custody of the orphan well group until they are sold.
Before the AER’s receivership order was revealed last week, Christensen raised doubts the industry would walk away from the sour gas wells completely. She cited a regulator report that said one of the sour wells inside Calgary city limits could last another 164 years.
“Can you imagine the wealth coming off that well?” [Emphasis added]
Behind the scenes: Lexin Resources, the chaos and its clash with regulators by Reid Southwick, March 30, 2017, Calgary Herald
As Lexin Resources Ltd. fought to fend off bankruptcy in the face of anxious creditors last year, a company official said the Calgary-based junior oil and gas firm was paying its debts — unless it disputed the amounts owed.
But disputes were piling up for Lexin, with workers growing increasingly concerned the company’s tight grip on the purse strings was beginning to undermine safety at its operations.
One contractor that claimed it had not been fully paid for maintenance work at Lexin’s sour gas plant northeast of High River later escalated its litigation by seeking to force the company’s subsidiaries into bankruptcy.
Michael Smith, then a director of a Lexin subsidiary, attempted to ward off the bankruptcy application in a sworn affidavit filed last spring. He argued the companies “continue to carry on their business in the ordinary course and pay their debts as they become due, provided there is not a bona fide commercial dispute.”
According to workers inside the plant, however, business was far from ordinary.
A Postmedia investigation offers a glimpse into months of chaos at Lexin’s gas plant at Mazeppa and its Calgary headquarters leading up to the Alberta Energy Regulator’s unprecedented move last week to force the company into receivership.
Interviews with five former Lexin workers, court records and other sources reveal concerns about worker safety and environmental hazards that allegedly went largely unheeded for months, sometimes longer. The findings raise questions about the level of oversight the company received from government agencies. [Intentionally none?]
The former workers spoke on condition of anonymity because they are either seeking, or plan to seek, some form of financial compensation they say the company owes them, including outstanding vacation pay and severance. But they maintain their motivation for speaking out is to shine a light on the company’s actions, not retaliation.
“We’re appalled that the company could do what they’ve done and get away with it,” one source said. [In AER Land, enabling harm & pollution & hanging the taxpayer rules, with government and Alberta Environment blessings!]
Lexin largely blames its troubles on the energy regulator, which it says charges “overbearing” fees and takes “severe” steps to collect them. It said the regulator ignored attempts to find a resolution to health and safety concerns.
But the regulator said the fees and levies it has attempted to recoup from the company are no different than what it charges the rest of the industry.
After Smith’s affidavit was filed last May, the crowd of creditors demanding payment from Lexin and its affiliates only continued to grow.
Many suppliers stopped doing business with the company because they weren’t paid for their work, former workers said. At one point, garbage began to pile up at the Mazeppa sour gas plant because the company stopped paying its waste collector, the sources said.
[And all the while, AER continued granting Lexin permits to cause more and more harm like it does to aquifer frac’er Encana?]
Maintenance spending at the plant waned, forcing workers to shut down equipment that became unsafe to run, they said.
Lexin also ran afoul of the province’s energy watchdog for failing to comply with a series of orders [Isn’t failure to comply standard in AER Alberta?], including demands to clean up spills that could send potentially toxic substances into a nearby creek.
The regulator ultimately shuttered the company last month by suspending its more than 1,600 licences, saying it had lost confidence in the company’s ability to operate safely. It was the energy watchdog’s largest ever suspension order.
The closure, roughly seven months after Lexin threatened to walk away from responding to emergencies at its plant and pipelines, raised questions over why the Alberta Energy Regulator waited so long to take action.
The regulator said it escalated enforcement against the company and had to give it time to respond. But a former worker said Lexin officials were preparing to be shut down months before the watchdog issued the closure order.
“They thought it was comical that we were still being allowed to operate,” the source said.
Enforcement action against Lexin didn’t end there.
Last week, less than a year after Smith said in his affidavit that Lexin firms were paying debts as they came due, a Court of Queen’s Bench judge approved the regulator’s bid to force the company into receivership. Its sour gas plant and 1,400 wells will be put up for sale under the supervision of a court-appointed receiver.
The regulator said a receiver is necessary to oversee an orderly approach to creditor claims against Lexin and transfer its assets to “responsible” parties.
“This is not our first choice,” it said.
Most of Lexin’s assets, including sour gas wells near Calgary city limits, were acquired from Compton Petroleum Corp. for $33 million in 2012.
Compton, which went public in 1996, was once among Calgary’s largest intermediate oil and gas producers. It declined in size over the years due to asset sales intended to improve its financial standing and what analysts have called management missteps.
“This just points to glaring deficiencies in the government of Alberta’s handling of these entire matters.” — David Speirs, a director of the Freehold Owners Association
The company attempted to sell itself in 2008 but failed to find an acceptable offer, helping to send its stock tumbling from $12.80 a share to $2.60 in four months.
In 2006, the company had earmarked $526 million for capital spending. Six years later, at the time of its sale to MFC Industrial Ltd., it was spending just $14 million to $16 million.
MFC Industrial, then based in New York, at the time of the sale said it had a record of spinning value out of troubled assets.
The parent company, now called MFC Bancorp Ltd., later changed its focus to become a merchant bank. Around the same time, the ownership structure of the southern Alberta oil and gas properties it had acquired became complex and opaque.
In late 2015, MFC Bancorp sold a controlling “economic interest” in these assets, listed as having no net asset value, to an undisclosed buyer, according to financial records.
But MFC Bancorp — a publicly traded Vancouver company with commercial headquarters in Austria — retained all of Lexin’s shares in a “fiduciary or trustee capacity,” meaning it remains the controlling registered shareholder, court records and company statements show.
An early sign of trouble under the new regime came in October 2015, before the asset sale. The ownership group had decided to stop paying annual rents to landowners with Lexin wells on their properties, according to an email sent by a company official to a farmer in June 2016.
“You are not the only landowner to be missing a payment,” the email read. “The ownership group decided to stop paying surface lease rentals around October of last year.”
The payments are designed to compensate property owners for wells on their land, but for hundreds of landowners the cheques stopped arriving.
“They have an office in Hong Kong that they want me to direct you to, but I am not going to do that because that will not get you anywhere,” the Lexin employee wrote. The email recommended the farmer contact the Surface Rights Board, which recovers unpaid compensation for oil and gas wells on private property. [All paid for by Alberta Taxpayers! How convenient, just how the AER, CAPP, other companies, Alberta government want it!]
“You will get the money much quicker this way than going through the ownership group and their runaround that they suggest,” the employee wrote.
The brief note provided the farmer with no explanation for her new-found source of frustration, but she wasn’t alone.
Dozens of Albertans who own rights to underground minerals realized throughout 2016 that Lexin wasn’t paying them royalties on its production anymore. In some cases, the company continued to produce — and collect revenue — for months without paying them royalties, said David Speirs, a director of the Freehold Owners Association. [It’s the landowners own fault for not demanding damage deposits to be held in trust in case “Lexins” happen, before allowing drilling to begin]
Lexin also stopped paying its share of mineral taxes for many of its wells, Speirs said. The Alberta government sent out 80 letters warning the mineral rights holders — not the company — that they’d lose their oil and gas rights unless they paid the taxes in full, said Speirs.
“This just points to glaring deficiencies in the government of Alberta’s handling of these entire matters,” he said.
“They coerced freeholders into paying taxes for a foreign company that shouldn’t have been operating here,” he added, referring to problems with Lexin’s operations identified by the energy regulator. [And how many hundreds more such companies are operating in the same bad way in AER Alberta?]
According to the Alberta government, the mineral rights holders own the resource — not the company — and chose to enter into private contracts with industry on their own. When taxes came due, the rights holders were on the hook, the government said, adding it has no involvement in the private deals.
Lexin’s deals with contractors over a maintenance project at the Mazeppa gas plant in the fall of 2015 sparked disputes that ended up in court. Young EnergyServe Inc., which specializes in tank and vessel cleaning, filed a lawsuit against Lexin subsidiaries claiming it was paid only $7,000 from a nearly $1.7-million bill.
“Money wasn’t put in for repairs. We had to shut down a lot of equipment because it got to the point that it was no longer safe to run.” — Former worker told Postmedia
Smith, then a director of a Lexin subsidiary at the centre of the lawsuit, disputed the claim, arguing Young EnergyServe and eight other contractors submitted invoices for work that far exceeded approved amounts, by as much as 70 per cent.
After nearly a year of litigation, Young EnergyServe was successful in forcing two Lexin subsidiaries — LR Processing Partnership and LR Processing Ltd. — into bankruptcy in November. But the companies filed an appeal less than a week later.
The move put the bankruptcy on hold, allowing the companies to retain control of their operations until a court considers the appeal. No hearing date has been set, according to the trustee, MNP Ltd. [And that is a nice example of how oil industry wrong doing “justice” works in Rape & Pillage Canada! The “Redwater” ruling by Justice Wittmann is another!]
After the big maintenance project wrapped up, the Mazeppa plant returned to processing sour gas until problems emerged several months later. By late spring 2016, the plant’s sulphur pit had become full because pumps that moved the sulphur into transport trucks had broken down, multiple sources said.
The repair company refused to deliver working pumps because Lexin hadn’t paid them for previous work, they said. Without a functioning sulphur pit, the company could not process sour gas.
Lexin’s apparently tight grip on its finances led to other problems, according to sources.
“Money wasn’t put in for repairs,” one former worker said. “We had to shut down a lot of equipment because it got to the point that it was no longer safe to run.”
Safety became a big worry, another former worker said. “I don’t know how many times us employees phoned them (the energy regulator) to tell them that we were operating at dangerous levels for health and safety,” he said. [Who cares when you have the AER looking the other way, and you’re making money!?]
The Alberta Energy Regulator confirmed it received employee complaints, but told the callers it has no authority over working conditions and sent them to Occupational Health and Safety. In cases where the regulator had jurisdiction, it followed up with the company, a spokeswoman said.
The watchdog noted deficiencies at the Mazeppa plant in February 2016. An inspector had found several bags of catalyst — a substance used in converting gas into sulphur — had spilled into the ground.
The regulator later said it shared concerns with former workers that the potentially toxic substance had leached into runoff ditches that feed into retention ponds. Should the ponds overflow, the material could end up in a nearby creek, it said.
More than a year later, the open bags of catalyst have not been cleaned up, according to the regulator, which noted the retention ponds are currently frozen, which makes a spill unlikely in the near term.
Lexin stopped reporting its oil and gas production in May 2016, a violation of provincial rules that triggers monetary penalties. As a result of the move, the company was no longer calculating — or paying — royalties to mineral rights holders or the government while it continued to produce oil and gas, a source said.
But the energy watchdog “allowed it to happen on a month-by-month basis,” the former worker said.
The regulator said it sent Lexin a notice in June that the company wasn’t complying with reporting rules and issued a fine for the violation. All other efforts to secure payment failed, it said.
As violations piled up, from the ripped bags of catalyst to a spill at a sour gas facility that wasn’t cleaned up, the watchdog ultimately escalated its enforcement in November by placing the company under a status called global refer, meaning the company was under greater scrutiny.
As part of its enforcement against Lexin, the regulator said it conducted 276 inspections of the company’s sites in 2016. In July alone, it made 177 inspections of infrastructure looking for “immediate threats to safety and the environment.”
The watchdog said it would have carried out just 32 routine checks over that time, if it weren’t for all the complaints, spills and increased surveillance due to concerns at the plant.
During a June inspection, the regulator uncovered problems with sour gas pipelines, which had been shut down because of a mechanical failure, according to court records.
The company later closed the plant and laid off employees in what it said was a temporary move until it could address deficiencies. The regulator had demanded Lexin repair the pipes, assess the pipeline system and investigate the failure.
Around the same time, the regulator said it was informed by the company that its leak detection system at its sour gas plant, pipelines and wells was no longer operational. The company said if there was an emergency, it could not respond because it had laid off most of its staff.
The regulator said it was worried the lack of oversight could lead to leaks of poisonous gas and ordered the company to shut down all of its facilities. [AER taking “action” years too late! Trying to impress the Supreme Court of Canada and pretend it’s a “regulator?”]
The company, however, maintains its leak detection system was working. Smith, then a director of a Lexin subsidiary, wrote in another sworn affidavit last July that after the shutdown a month earlier the detection system was being monitored by a single employee on a rotating 12-hour shift.
The Alberta government received a complaint in July that claimed having only one employee working at a time was “detrimental to health and safety because there is no backup should an injury occur.” The complaint also claimed the worker on shift could be at risk from a potential break-in.
The Alberta government said Occupational Health and Safety staff inspected Lexin’s operations after receiving the complaint but found no violations. A spokeswoman said staff were satisfied the company complied with regulations requiring the plant workers to have open communications with their company by having cellphones and an answering service.
On Sept. 24 — more than two months after the complaint — an intruder wearing a balaclava cut the lock at a Lexin gate and broke in when a single worker was on site, but the suspect ran off when spotted, according to High River RCMP. No one was injured.
While the plant was shuttered, Lexin wells continued to produce and generate revenue, according to a former worker who estimated roughly 150 wells were operational earlier this year.
“Companies out there are actually struggling; they’re working out their bank loans,” he said. “We were cash-positive.”
But the company argued in a letter to the regulator that its ongoing dispute with the watchdog over fees and conditions at company facilities “has materially adversely affected our operations, liquidity and access to capital.”
“We also advise that because of the dispute and your actions, we are not sure that we will be able to continue to provide proper health and safety overview and measures for the sour wells, particularly beyond Feb. 15,” wrote Smith, now the interim chief executive at MFC Bancorp and director at Lexin.
In response, the regulator called a news conference on Feb. 15 and issued a rare, stunning rebuke of the oil and gas company for failing to properly maintain its properties.
“The AER has very little confidence in Lexin’s ability to conduct their operations safely,” Mark Taylor, a vice-president at the watchdog, told reporters.
[Mark Taylor Hypocrite & Liar Check:
Mark Taylor, when he was manager at Encana was perfectly fine with Encana illegally fracturing Rosebud’s drinking water aquifers and telling concerned residents in a public community meeting that the company would never ever frac near their drinking water supply, only far beneath it, after Encana had already illegally fractured right into the community’s aquifers 6 months previously?
And, Mark Taylor was perfectly fine lying to Ernst in writing, and deflecting and ignoring her concerns about residents, including Ernst, living in explosive risk in their homes with their drinking water dangerously contaminated with Encana’s methane and ethane after Encana illegally and secretly fractured their drinking water aquifers?
And, Mark Taylor was perfectly fine sending Ernst a fraudulent offer to test her water well by mailing it weeks after his offer to test her water well had expired – in direct violation of AER Directive 035 – then lying the media, claiming Ernst had refused testing?
End Mark Taylor Hypocrite & Liar Check]
Taylor said the regulator was suspending all of Lexin’s more than 1,600 licenses, effectively shutting it down.
The Orphan Well Association, an industry-funded group that cleans up abandoned oil and gas wells, would assume temporary custody of most Lexin wells to ensure they’re shuttered and safe, in the hopes buyers can be found or Lexin complies with the rules and resumes control.
Companies with working interests in Lexin wells were ordered to take over and provide similar oversight.
“We’re taking measures to prevent any increase in public safety, environmental or financial risk,” Taylor had told reporters.
Lexin, however, claims the regulator “severely crippled” the company’s ability to address health and safety concerns on its properties by charging security deposits and fees it claims are too high and garnishing funds after it refused to pay.
As a result of the regulator’s actions to obtain payment, including a lien against Lexin property, Smith said in a letter to Postmedia it became “virtually impossible” to sell assets, secure financing and deal with creditors.
Smith said Lexin made “numerous attempts” to work with the regulator to ensure health and safety concerns were addressed.
He cited a proposal he made to the regulator in December that would have opened up more production, generating revenues to pay regulator debts and freeing up cash for the company. He told Postmedia some of the freed-up cash would have addressed health and safety concerns, though his letter to the regulator made no mention of that.
(His December proposal asked the regulator to stop garnishing funds and allow the company to off-load about 20 sour gas wells to the Orphan Well Association. The watchdog rejected the pitch.)
“The AER’s overarching and primary goal should be to work for Albertans and with the oil and gas industry to address health and safety in the industry,” Smith said in his letter to Postmedia.
“Instead, the AER has put the collection of monies to bankroll its administrative functions above all else. In the Lexin case, this has directly resulted in jobs lost and Lexin’s inability to finance ongoing health and safety at its wells.”
The regulator said the fees Lexin disputes are levied against all energy companies; the funds pay for the watchdog’s operations and cover cleanup costs for wells abandoned by bankrupt operators.
Lexin didn’t file an appeal to challenge the levies, nor did it pay them, according to the watchdog.
The regulator, which claims it is owed $70 million in security deposits and more than $1 million in levies, will get in line with other creditors who haven’t been paid as a receiver sells Lexin’s assets. It’s the first time the watchdog has ever forced a company into receivership.
“We believe that this is the most appropriate course of action following Lexin’s continued disregard for AER requirements to ensure public safety and environmental protection,” Cara Tobin, a spokeswoman for the regulator, said last week.
Several sources who used to work at Lexin said they don’t believe the regulator acted fast enough in closing the company.
But Tobin said the watchdog had to treat the company fairly by ensuring it understood the rules and giving it time to comply. This attention to detail, Tobin said, is giving the regulator firepower to defend its actions against a series of challenges.
In response to the regulator’s orders, Lexin has submitted seven regulatory appeal requests, two of which were dismissed, along with two judicial reviews and two applications to the Court of Queen’s Bench.
“The number of regulatory and legal challenges launched by Lexin clearly demonstrates why this diligence is so important,” Tobin said, defending the regulator’s record on enforcement against the company.
“While asserting it has no funds to address its regulatory obligations, Lexin is spending thousands of dollars to pursue legal challenges against the AER,” Tobin said earlier this month, before the receivership order.
“The AER takes the position that those considerable funds are better spent by Lexin complying with its regulatory and statutory obligations.” [Emphasis added]
Earlier version of above article:
Calgary-based Lexin remains defiant in clash with regulator that forced it into receivership [It appears like Lexin forced the mess onto itself] by Reid Southwick, March 30, 2017, Calgary Herald