It is no secret that the mining sector is facing tough times. In recent boom years, mining companies took on unprecedented amounts of debt. Now that commodity prices have dropped and sources of refinancing have dried up, debt obligations have become overwhelming for many companies, posing a serious risk to their survival.

Canada

doing business in Canada 2 | doing business in Canada Canada is one of the world’s premier locations for business investment. Boasting an exceptional wealth of natural resources, a sound financial system and world-class infrastructure, Canada is known for innovation in a wide range of sectors. And with generous research and development incentives, low corporate tax rates, and easy access to major U.S. markets, Canada is a top destination for foreign companies seeking a foothold in North America.

Background:

On January 31, 2019, the Supreme Court of Canada released its decision in Orphan Well Association, Alberta Energy Regulator v. Grant Thornton Limited and ATB Financial.[1] This important decision may have profound implications, potentially limiting the ability of oil and gas producers to secure credit and impairing the effectiveness of the insolvency system where debtors have significant regulatory obligations.

Today the Supreme Court of Canada granted the Orphan Well Association and Alberta Energy Regulator leave to appeal the Alberta Court of Appeal’s closely watched decision in Orphan Well Association v. Grant Thornton Limited (2017 ABCA 124), which is also known as Redwater.

In a pivotal decision released May 19, an Alberta court ruled in favour of Grant Thornton Limited, the Receiver and Trustee in the Redwater Energy Corporation (Redwater) receivership and bankruptcy proceedings, upholding its right to disclaim Redwater’s non-producing oil wells and sell its producing ones. Gowling WLG served as co-counsel to Grant Thornton throughout the proceedings.

On August 17, 2021, Basic Energy Services, L.P., along with several affiliates that provide operational support for oil and gas wells located in several US states, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of Texas (Case No. 21-90001). The company reports $100 to 500 million in assets and $500 million to $1 billion in liabilities.

Nuverra Environmental Solutions, Inc. (OTCQB: NESC), one of the largest environmental solutions companies focused on the development and ongoing production of oil and natural gas in the United States, and 13 of its affiliates, have filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-10949).

Adams Resources Exploration Company, an oil and gas exploration and production company based in Houston, Texas, has filed a voluntary petition for relief under Chapter 11 under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (Case No. 17-0866-KG).

Noble Environmental Power, LLC, and several of its affiliates filed for Chapter 11 protection in the Bankruptcy Court for the District of Delaware (Lead Case No. 16-12055). Noble, a renewable energy company that owns and operates wind generation assets in New York and Texas, has its principal place of business in Centerbrook, Connecticut. According to the Debtor’s first day affidavit, downward trends in energy prices have made its debt obligations untenable, leading to the commencement of this case.