CALGARY, June 11, 2019 /CNW/ - (TSX:PMT) –
Perpetual Energy Inc. ("Perpetual" or the "Company")
has filed an application with the Court of Queen's Bench of
Alberta seeking a judicial review
of the previous NDP government's Minister of Municipal Affairs'
Guidelines published December 13,
2018 (the "Minister's Guidelines") as they relate to
how assessed values of linear property, machinery and equipment are
calculated for the purpose of municipal property tax. The Company
believes the current assessment process is inequitable,
unreasonable, and creates results not reflective of actual value,
especially for mature assets.
A recent Supreme Court of Canada decision (the "Redwater
Decision") ruled that energy companies must fulfil their
environmental end-of-life obligations ahead of repayment of
creditors in the case of insolvency or bankruptcy. The Redwater
Decision confirms that end of life obligations are necessarily an
embedded reduction in the value of oil and gas assets, suggesting
that future asset retirement costs should be considered in
assessment values. The Minister's Guidelines do not consider the
embedded asset retirement obligations in value assessments for
property tax purposes. Furthermore, the Ministerial Guidelines were
not a result of meaningful consultation with affected stakeholders
and do not adequately consider the depreciation of value which
occurs as oil and gas production depletes finite pools, which is
particularly punitive for aging oil and gas operations.
Perpetual notes that the grossly overstated property assessments
create property taxes so high that companies are forced to shut-in
operations prematurely and, in some cases, become bankrupt. This
crippling economic impact strands unproduced reserves and results
in loss of jobs and economic benefits, especially in rural
communities.
"The dramatic impact of overstated property assessments and the
related inflated municipal taxes charged on mature assets is a
concern we have expressed for many years", said Sue Riddell Rose, President & CEO of
Perpetual. "We hope now is the time to find a suitable solution
that preserves jobs, both direct and indirect, restores fairness,
and allows for the full economic recovery of Albertans' resources
from mature wells."
"Industry and our Company have been in touch with the Government
of Alberta on this matter",
continues Sue Riddell Rose. "Our
interest is in finding broadly acceptable resolution and we are
filing this application to meet pending objection limitation
deadlines."
ADDITIONAL INFORMATION
About Perpetual
Perpetual is an oil and natural gas exploration, production and
marketing company headquartered in Calgary, Alberta. Perpetual operates a
diversified asset portfolio, including liquids-rich natural gas
assets in the deep basin of west central Alberta, heavy oil and shallow natural gas in
eastern Alberta, with longer term
opportunities through undeveloped oil sands leases in northern
Alberta. Additional information on
Perpetual can be accessed at www.sedar.com or from the
Corporation's website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
SOURCE Perpetual Energy Inc.