For immediate release: Thursday 5 November 2026
Canadian O&G firms spending record profits 7:1 on shareholders rather than required clean-up
New analysis shows most shareholders receiving $7 for every $1 spent on clean-up
Companies failing to reduce AROs amid industry’s quarter of record profits
‘Oilfield paradox’ highlights need for stronger regulation to ensure timely clean-up
Canadian oil and gas companies are still prioritising sending money to shareholders from their most profitable period ever, rather than paying down their growing bill for the legally required clean-up of old and inactive wells, new analysis shows.
A review of the top 20 largest publicly traded companies operating in Alberta reveals that the majority of companies in the sector are giving shareholders more than C$7 for every $1 they spend on reducing their asset retirement obligation (ARO) liabilities.
Free cash flows for the Canadian oil and gas sector are reported to top an estimated $83.6 billion in 2026, driven largely by skyrocketing oil prices. With the sector’s orphaned remediation costs worth at least $1.66 billion, three-quarters of a year of company profits could pay for the existing orphan well backlog 138 times over.
The new analysis from Redwater Insights, a data-driven research unit analysing the risks associated with oil and gas decommissioning liabilities, shows that:
Net operating cash flows of the top 20 publicly traded companies operating in Alberta are up 45% compared to the first half of 2025, but ARO settlements are only up 12%;
These firms are giving shareholders $6.80 for every $1.00 they spend on clean-up;
While this ratio has improved slightly since the last reporting period, figures have been skewed by clean-up work of the three largest companies: CNRL, Imperial and Suncor;
Excluding these (and Paramount Resources’ one time sale and distribution) the ratio for the majority of the sector has gotten much worse, with $10.40 sent to shareholders for every $1.00 spent on AROs;
While the three largest operators increased ARO settlements, their remaining ARO liability balance is 1% higher than it was on December 31, 2025;
Those three companies spent $840 million on asset closure (including assets outside of Alberta), but this still didn’t even make a dent in their ARO liabilities;
Q3 2026 promises to be the most profitable quarter yet, driven largely by high oil prices;
At current rates, it would take the Orphan Well Association (OWA) more than a decade to resolve all ARO liabilities, and that doesn’t account for new liabilities that will come from pending bankruptcies (such as the 4,000 wells added from the Long Run Exploration’s bankruptcy).
Redwater Insights Research Director Rob Schuwerk said:
“This analysis undercuts a fundamental premise embedded in Alberta’s mature asset strategy, which implicitly assumes that more oilfield profits will lead to more asset retirement.
“The problem is the ‘oilfield paradox’; it is always in the operator’s interest to delay and defer its clean up obligations, including past the point at which it has the financial ability to pay, if not required to by strong regulation.
“Currently Alberta, like most governments, doesn't collect funds when times are good, and it struggles to do so when times are bad. It’s a system of ‘heads I win, tails you lose’.
“If companies are not reducing their asset retirement obligations when oil prices are sky high, when will they? This situation has to change if Alberta does not want to be stuck with the industry's large and growing clean-up bill.”
Schuwerk noted that while Alberta does have minimum ARO spend requirements, they are too low to force appropriate levels of spending. And they do not adjust upwards to ensure that some portion of windfall profits goes to eliminating operators’ ARO liabilities.
The result is a system in which ARO spending is reduced when times are lean, but hardly grows with windfall profits. All the while, the resources deplete, making it harder for future profits to cover future ARO liabilities. -ENDS-
Notes to editors
A detailed breakdown of the analysis can be found here.
Redwater Insights’ analysis of the previous reporting period is here.
Media contact: Redwater Insights: media@redwaterinsights.org
About Redwater Insights
Redwater Insights offers data-driven research and analysis on the financial and environmental risks associated with oil and gas clean-up and decommissioning liabilities. Our expert team combines financial, legal, data and regulatory analysis to provide sector-leading asset retirement obligation (ARO) insights across regulation and policy, audit and accounting, and data and analytics. We use this insight to inform and advise the industry, investors and policymakers with the aim of strengthening accountability and improving market integrity.
