Calgary-based Houston Oil & Gas Ltd has become the latest victim of the struggling oil and gas sector in Canada, ceasing operations as lower oil and natural gas prices and an investor exodus continues to weaken Alberta's energy sector.
Houston Oil & Gas Ltd operated some 1,200 wells in Alberta, of which 95 percent were gas wells and 5 percent, oil wells.
But Houston Oil & Gas has informed the Alberta Energy Regulator (AER) that it is halting operations and no longer has any employees, CBC News reports, citing court documents.
Some of Houston Oil & Gas's wells have already been transferred to the Orphan Well Association (OWA), an industry-funded group that picks up the tab for decommissioning and cleaning up wells for companies that have gone bankrupt and can't sell their assets.
The AER has estimated that if all of Houston Oil & Gas's wells cannot be sold and thus designated as 'orphaned', the clean-up costs would amount to US$62 million (C$81.5 million), according to CBC News.
Houston Oil & Gas is not the first Canadian producer struggling in recent months amid low oil and gas prices and constrained market access in Canada's energy patch.
Related: The Next Stage Of Trump's Plan To "Secure The Oil" In Syria
In early October, Calgary-based Bellatrix Exploration Ltd said that it would start looking for a buyer or buyers of the company or part of its assets. The company also launched a court-supervised restructuring proceeding, citing "industry challenges facing the Western Canadian oil and natural gas sector, including prolonged and continued poor natural gas and natural gas liquids prices."
While some smaller players go bust, larger companies are fleeing Canada.
In late October, Encana Corporation said it intends to move its corporate domicile from Canada to the United States and rebrand under a new name, amid a growing investor and company exodus from the Canadian oil patch plagued by pipeline capacity shortage and general anti-oil sentiment.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More