On March 20, 2015, Alberta Oilsands Inc. reported that Alberta Energy had completed its review of the Company’s application under the Mineral Rights Compensation Regulation (MRCR) for compensation relating to the proposed cancellation of the Company’s oil sands leases located within the Fort McMurray Urban Development Sub-Region (UDSR) and that Alberta Energy determined the total compensation payable to AOS to be an aggregate of approximately $34 million, inclusive of applicable interest.
Subsequent to being advised of Alberta Energy’s determination of the Company’s compensation claim, AOS reviewed Alberta Energy’s determination of the compensation amount with its legal advisors to determine the appropriate next steps to bring this matter to a conclusion. The review consisted of an analysis of remedies available under the MRCR; appeal options outside of the MRCR framework; and the amount of resources and timing required to pursue each option. Based on subsequent discussions with Alberta Energy, AOS determined that receiving the current compensation amount is in the best interest of the Company.
On May 26, 2015, the Company announced that it was in receipt of $35,087,246, inclusive of applicable interest, as compensation for the cancellation of the said oil sands leases. The increase in total compensation amount from the initial amount announced on March 20, 2015 is a result of additional accrued interest since that date. A right of first refusal has also been granted to the Company for a period of 20 years on the cancelled areas.
As a result of the full or partial cancellation of the oil sands agreements under the UDSR, the Company now retains oil sands leases in the Clearwater area covering an aggregate of approximately 6,546 acres. The Company does not currently have any exploration or development plans for the remaining leased areas at Clearwater. AOS will continue to review its options to increase the compensation amount, however, there is no assurance that the continuing review of the Company’s remedy options in this matter will result in the Company pursuing any additional action or that any action, if taken, will be successful.