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The Saskatchewan government has ordered Prospera Energy Inc. to suspend all its provincially licensed oil and gas operations, including facilities near Luseland and Hearts Hill, as the company works to address outstanding environmental and regulatory obligations.
The order, issued Oct. 30 by the Ministry of Energy and Resources, establishes three deadlines for shutting down the company’s wells, facilities and associated pipelines across Saskatchewan.
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In response, Prospera has released a detailed environmental cleanup schedule, outlined its recent production improvements in the Luseland oilfield and confirmed the cancellation of a planned $12-million financing arrangement.
The Calgary-based company says it is working with provincial regulators to address outstanding compliance issues and is seeking a way to have the suspension order rescinded.
The first phase of licence suspensions will take effect Nov. 29, affecting wells and facilities in the Hearts Hill area. The second phase is scheduled for Dec. 29 and targets operations in the Luseland area.
All remaining wells and facilities licensed to Prospera in Saskatchewan must cease operations by Jan. 28, 2027.
The order also requires the company to suspend operations at associated flowlines and pipelines.
Under Section 58 of The Oil and Gas Conservation Act, proceeds from oil, gas or related products produced from affected operations on or after their respective suspension dates must be forfeited to the Crown.
Prospera commits to environmental cleanup
In a Nov. 6 statement, Prospera acknowledged the provincial order and reaffirmed its commitment to addressing environmental obligations across its Saskatchewan properties.
The company says it is working to complete cleanup activities at 13 environmental sites identified in an earlier minister’s order. According to Prospera, most of those environmental issues originated before the current management team took over in October 2024.
The company reports investing $2.83 million in spill response, site assessments and remediation since Oct. 31, 2024. That work has included removing 6,662 tonnes of contaminated soil, completing 1,646 hours of fieldwork with local crews and repairing or isolating four failed pipelines.
The company has established a schedule to bring all outstanding sites to the environmental monitoring stage by Jan. 22, 2027.
Prospera has set a Nov. 27 deadline to bring three Hearts Hill sites and one Luseland site to the monitoring stage. Additional work is planned at Hearts Hill sites in December, including a location affected by a pipeline release in September 2026.
The company is also targeting the removal of legacy contaminated soil piles at three Cuthbert locations by Nov. 15.
All five Cuthbert environmental sites are expected to reach the monitoring stage by Jan. 22. Topsoil replacement and reseeding of reclaimed areas are planned for spring 2027.
Prospera says its outstanding regulatory compliance items have declined from 146 in October 2024 to 58, with 352 of 410 identified items now closed.
The company reports that annual well testing, vegetation management and several other regulatory requirements have also been addressed.
“We are committed to restoring every one of these sites and resolving every outstanding compliance item at an accelerated pace, and our crews have been and are on site today,” Prospera chairman and CEO Shubham Garg said.
“We have given the province a firm schedule, with every site at the monitoring stage by Jan. 22, and we will meet it.”
Luseland oil production increased after work
The suspension order comes as Prospera reports significant production improvements at its Luseland oilfield.
In an Oct. 24 release, the company announced that five wells serviced between Sept. 21 and Oct. 10 had returned to production. Combined production from those wells averaged 53.5 barrels of oil per day following the work, compared with 16 barrels per day beforehand.
The company says the improvements represent approximately 3.3 times the previous production rate.
The five-well program cost approximately $247,000, coming in 23 per cent below the original budget of $322,000.
The work involved replacing or upgrading pumps and equipment, addressing sand buildup and repairing mechanical failures that had reduced production.
Prospera also reported that its broader well reactivation program increased Luseland production from 54 barrels per day to 284 barrels per day.
In an earlier October update, the company said its first 10 restarted wells, which included operations at Luseland and Hearts Hill, had generated $2.19 million in operating income against $1.14 million in capital investment.
Nine of those wells had recovered their initial investment, taking an average of approximately 11 months to do so.
The company had also identified more than 140 potential reactivation candidates across its Saskatchewan heavy oil properties.
Those production improvements and potential future development plans now face uncertainty because of the provincial suspension order.
Prospera says its Saskatchewan operations support local trucking companies, service rigs, chemical suppliers, contractors and other businesses in communities surrounding its oilfields.
The company reports paying approximately $6.6 million in surface lease payments to farmers and landowners since 2021.
It also says it has worked to reduce outstanding vendor accounts, bringing the number of creditors with unpaid balances from 660 to 306 since the current management team took over.
Prospera maintains that its efforts to reactivate existing wells have generated additional work for businesses in the Luseland, Macklin and Kindersley areas.
Any prolonged suspension of operations could affect those business relationships and local economic activity, although the company has not provided an estimate of potential job losses or financial impacts.
$12-million financing cancelled
In its Nov. 6 announcement, Prospera confirmed it had cancelled a previously announced $12-million equity financing arrangement.
The financing had been scheduled to close Nov. 7 but was cancelled following the province’s suspension order.
— with files from CJME News
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