Alberta | Theaus CH4

Removing Liabilities, Restoring Value

From Environmental Burden to Financial Opportunity

Across Alberta, tens of thousands of marginal and inactive wells remain on corporate balance sheets as long-term environmental liabilities.
Each of these wells represents ongoing methane emissions, reclamation obligations, and decommissioning costs that must be recognized under AER Directive 011 and Directive 020.

For operators, municipalities, and investors, these wells create:

Financial exposure through future cleanup costs and asset-retirement obligations (AROs);
Regulatory risk as Alberta’s Liability Management Framework (LMF) demands full-cost closure planning;
Reputational pressure as methane accountability and ESG disclosure tighten across the energy sector.

Capping Wells, Clearing Liabilities

Theaus CH₄ permanently seals marginal wells that are no longer economical to operate.
Each site’s closure follows AER-approved plugging and vent-flow elimination standards, transforming the well from an open-ended liability into a verified, decommissioned asset.

When a well is capped and certified:

The asset-retirement obligation (ARO) tied to that well can be removed from the balance sheet;
Future leakage and environmental-impairment liabilities are eliminated;
The action generates verified carbon-credit revenue under the Methane Emissions Prevention via Permanent Abandonment of Marginal Oil and Natural Gas Wells v1.0 methodology (ICR 370 v1.2).

Each closure is georeferenced, validated by independent engineers, and issued as a registered carbon credit under the International Carbon Registry (ICR) — providing both financial and environmental return.

Why Alberta’s Framework Makes This Critical

Alberta’s LMF and the AER’s Licensee Capability Assessment (LCA) system now score every license holder on the ratio of assets to liabilities.
Inactive wells increase a company’s deemed liability and reduce its ability to acquire new licenses or financing.

By partnering with Theaus CH₄:

Operators can proactively reduce their liability rating under AER’s deemed-liability formula;
Landowners and municipalities benefit from restored surface integrity and reduced methane risk;
Investors see a cleaner, de-risked asset portfolio aligned with ESG reporting and IFRS 37/IAS 37 provisions on decommissioning obligations.

Accounting Impact

Under international accounting standards (IAS 37 / IFRS 37):

“A provision shall be reversed when it is no longer probable that an outflow of resources will be required.”

Once a well is permanently abandoned and certified compliant with AER standards, the associated ARO provision can be derecognized.
Theaus CH₄ provides the supporting documentation — abandonment certificates, engineering sign-off, registry validation — enabling auditors to confirm the liability’s removal.

Environmental + Economic Return

Each capped marginal well delivers dual benefits:

Benefit Type Description

Financial ARO and reclamation liability removed; carbon credits monetized

Regulatory Compliance with AER Directive 020 and Liability Management Framework

Environmental Methane source eliminated, land restored

Reputational Demonstrated ESG leadership and proactive risk reduction

The result: cleaner books, cleaner land, and measurable climate impact.

Transforming Liabilities into Climate Assets

By turning end-of-life wells into verified carbon assets, Theaus CH₄ closes the loop between environmental compliance and financial performance.
For operators, this means transforming mandatory decommissioning into a revenue-generating, liability-reducing transaction — one that satisfies auditors, investors, and the atmosphere alike.

Ensuring Additionality in Alberta

Balancing Regulation and Climate Integrity

Alberta’s energy regulator has introduced stronger rules to accelerate well closure, but those rules don’t automatically eliminate carbon-credit eligibility.
Theaus CH₄ works within these regulations to ensure every credited closure remains truly additional—that is, the emission reduction would not have happened without our financing and methodology framework.

Why Additionality Matters

In carbon markets, additionality means proving that an emission reduction is above and beyond existing legal or financial obligations.
To maintain integrity under the International Carbon Registry (ICR 370 v1.2) and ISO 14064-2, Theaus CH₄ only includes wells that are not legally required or publicly funded to be abandoned.

Navigating Alberta’s Closure Landscape

Under the Alberta Energy Regulator’s Directive 088 and Liability Management Framework (LMF), every licensee must allocate an annual budget for closure work.
However, these rules don’t specify which wells must be closed—only the total amount a company must spend.
That means many high-risk marginal wells still sit idle, leaking methane year after year.

Theaus CH₄ targets these discretionary wells—assets that are:

Marginal or low-producing (<15 BOE/day or < 90 Mcf/day);
Not listed in any enforceable AER closure order;
Not funded through SRP, OWA, or other public programs;
Owned by solvent operators with no active reclamation mandate.

This ensures every project meets the “No Legal Mandate” and “No Public Funding” tests required under ICR 370 v1.2 §4.2.

Demonstrating Additionality

For each Alberta well, Theaus CH₄ provides:

Regulatory Attestation — proof that no AER enforcement order exists.
Funding Verification — confirmation the site isn’t covered by public programs.
Financial Test — analysis showing the well would not be closed this year without carbon financing.
Marginal Production Evidence — 12-month records proving low economic output.
Independent Validation — third-party VVB review under ISO 14064-3.

These checks document that each tonne of avoided methane meets the ICR 370 “Reduction/Avoidance (RAD)” standard under Sectoral Scope 10 – Fugitive Emissions from Fuels.

From Compliance to Credibility

By focusing on wells outside regulatory mandates, Theaus CH₄ helps Alberta operators:

Reduce deemed liabilities under AER’s LCA system;
Earn verified carbon credits while exceeding compliance expectations;
Demonstrate ESG leadership through measurable methane elimination;
Support Alberta’s emission-reduction goals without drawing on taxpayer funds.

Integrity First

Every project undergoes annual MRV (Monitoring, Reporting & Verification) under the ICR protocol.
All credits apply a 5 % permanence buffer and remain traceable through the ICR public ledger for 10 years after issuance.

This ensures Alberta’s well-closure progress and climate-credit creation move forward hand-in-hand—with transparency, financial discipline, and verifiable impact.