BARRHEAD- A lot at the Kiel Industrial Park should be more saleable after a decision by County of Barrhead councillors.
On July 20, councillors unanimously authorized county manager Debbie Oyarzun to enter into an agreement with Axiom Oil and Gas that would see the energy company properly shutter their oil and gas well site, which is on a lot in the county-owned Industrial Park.
"It is quite a deep well (1,160 metres), but it never made commercial production," she said, adding Axiom does have other wells within the county that are active.
The well was scheduled to go into production in 1992.
The cost of shuttering the well and doing the necessary reclamation work, according to Axiom estimates, will cost the company between $185,000 and $205,000.
By properly shuttering the well, the setback from what is left from the infrastructure is reduced to five metres from the current 100 metres, which dramatically reduces the saleability of the 176.65 by 167.93 metre lot.
Later in the meeting, Oyarzun added that depending on what a developer plans for the lot, the setback could be reduced even further. For any non-permanent development, such as a gravel parking lot or moveable storage containers, the setback requirement does not apply.
In recent years, Axiom Oil and Gas has struggled financially, at least if the amount of taxes it owes the county is any indication. As of July 14, Axiom owes the county approximately $634,383.48 in taxes over four years, not including $120,610.12 in late penalties.
As part of the agreement, the county waives the penalties Axiom incurred along with their $2,600 annual lease payment.
"[Under the contract] they assume all risks and the responsibility for obtaining the reclamation certificate," Oyarzun said.
The company's tax troubles started in 2019. According to the Request for Decision document in 2018, Axiom's outstanding tax balance was only $984.64. But, in 2019 the amount owing increased to $213,697.44. After the 2020 tax year, their outstanding balance more than doubled to $533,952.35.
However, Oyarzun said the company's fortunes seem to have improved. Axiom has entered into a tax payment plan with the county.
"They are back on track. They shared positive comments to me about what is happening in the industry right now and they are excited to work with us," she said, adding their recent payments have been more than what was required.
"That is good negotiating," Coun. Darrell Troock said. "No one was going to buy the lot as it was. And as for the penalties, as long as they are making their [tax instalment payments], that is all that matters."
Reeve Doug Drozd asked if there was any timeframe to have the work completed.
Oyarzun said the physical work would likely be completed by the end of the year.
"For the whole process, reclamation and getting the certificate could take some time," she said, adding under the terms of the agreement they have until Dec. 31, 2022, to get everything in place.
As part of the process, Oyarzun said, Axiom will have to prove to the province that there is no soil contamination and that the land has been returned to its preexisting condition.
The county bought the quarter section of land located at NE 27-59-3-W5, which is immediately south of the Northplex plant on Range Road 32, for $575,000 from the Kiel family in 2012 for the expressed purpose of creating an industrial park.
Currently, the park is in Phase 1 of its development plan for the 45-acre parcel in the northern portion of the property that encompasses six lots. In June 2018, the county announced that Royal Canadian Holdings purchased the first lot to build a medicinal marijuana facility. There has been no word from the company of when it plans to break ground on its nearly 50,000 square foot facility.
In July 2019, during a public information session in Barrhead, chief executive officer Jake Burlet suggested that, if all things went well, they could be in production by the end of the year.
Barry Kerton, TownandCountryToday.com
