The Alberta Energy Regulator (AER) has directed oil and gas company MAGA Energy Ltd. to halt its operations due to unresolved environmental issues and non-compliance problems, which include outstanding taxes and orphan well cleanup fees. The AER made the announcement on Thursday after issuing the order the day before. MAGA Energy, based in Calgary, has a two-week deadline to cease well operations, shut down equipment at its sites, and stop using active pipelines as per the directive from the agency.
Currently, MAGA Energy holds 581 wells, 108 facilities, and 801 pipeline segments, according to the AER. The regulator stated that the action was taken to safeguard the public and the environment. The AER highlighted MAGA Energy’s failure to meet its financial obligations, including unpaid municipal taxes and debts to the AER and Orphan Well Association, leading to doubts about the company’s ability to fulfill its regulatory duties and liabilities.
The order specifies a set of conditions that MAGA must address before resuming operations, such as rectifying remediation issues at various sites, resolving pending field inspections, and allocating the minimum legally required funds for cleaning up inactive sites.
Sturgeon County revealed that MAGA Energy owes more than $356,000 in property taxes and penalties. The county emphasized the importance of companies meeting their tax obligations and expressed concerns about the uncertainty of recovering funds if the company dissolves. Oil and gas companies collectively owed Sturgeon County over $6.8 million in unpaid property taxes by the end of 2025.
In a previous development in 2023, a ministerial order signed by Alberta’s former energy minister Peter Guthrie aimed to prevent the AER from approving well or license transfers to companies with significant tax arrears. In 2024, the AER greenlit the transfer of wells, facilities, and pipeline licenses to MAGA Energy, a move that drew criticism from affected landowners like Mark Dorin.
Dorin, who owns land in and around Edmonton with wells under MAGA Energy’s ownership, expressed frustration over the company’s tax delinquency and lack of benefits to the public. Despite CBC’s attempt to seek comments from MAGA Energy, the company had not responded at the time of publication.
Energy Minister Brian Jean’s office stated that the suspension order on MAGA Energy demonstrates the effectiveness of Alberta’s policies in regulating companies. Janetta McKenzie from the Pembina Institute raised concerns about the regulator’s timeliness in enforcing responsibilities on oil and gas firms, highlighting the challenges in recovering unpaid taxes from the industry.
A recent report suggested that a significant portion of unpaid taxes by oil and gas companies in Alberta may be irrecoverable. The province imposes an orphan well levy on oil and gas firms to support the Orphan Well Association’s activities, but concerns have been raised about the adequacy of the levy amount. McKenzie emphasized the need for changes to prevent Albertans from bearing the financial and environmental burdens resulting from orphan wells not being adequately addressed.
Dorin plans to seek compensation from MAGA Energy through the Land and Property Rights Tribunal under the Surface Rights Act, recognizing the potential lengthy process and growing financial implications.