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The failure of junior Spyglass Resources Corp. on Thursday is the first for a conventional Calgary-based oil and gas producer in the current downturn and raises questions about how the province will deal with well reclamation liabilities if the trend continues.

Spyglass shares were halted Thursday morning as it announced its creditors were going to Court of Queen’s Bench to request that Ernst & Young Inc. be appointed receiver. A few hours later, it announced the receivership had been granted and all of its directors had resigned.

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Company officials did not return a request for comment.

“From a traditional conventional asset base, I think this is the first one and, from what I’m hearing, it might set a precedent as far as how the province treats this,” said Thomas Matthews, an analyst who covers juniors and intermediates — but not Spyglass — for AltaCorp Capital in Calgary.

“If the province is on the hook for some of these asset liabilities but then banks are on the hook for the debt, then who takes precedence?