Texas
Environmental Risk Resolution
Environmental Clean-up and Regulatory Strategy for Acquired Assets
Project Challenges:
A large independent Exploration and Production (E&P) company acquires, operates, optimizes and divests oil and gas assets across the US and raises its operational capital via dedicated institutional investment funds. An indemnity trigger associated with one of those investment funds required regulatory release for legacy groundwater chloride contamination at a site in West Texas. The company had endured years of minimal remediation progress and needed an innovative approach and timely solution to the groundwater issue to allow the company to divest from the asset and release the multi-million dollar investment fund back to investors.
TRC Solutions:
- TRC’s team developed an innovative regulatory strategy and structured a guaranteed fixed‐price (GFPR) , share‐line incentive‐based risk mitigation agreement to aggressively pursue and achieve regulatory closure.
- TRC optimized the groundwater extraction system, incorporating specific data from a field‐wide mapping survey and risk evaluation. TRC’s remedial strategy successfully addressed the outstanding groundwater issue in a timely manner, resulting in a No Further Action (NFA) determination from the regulator with jurisdiction, the Texas Railroad Commission.
Client Benefits:
- Achieved regulatory NFA release for this legacy liability within 18 months vs. the prior incumbent‘s 8 years of unsuccessful progress.
- Reduced environmental liabilities to the company’s balance sheet.
- Satisfied the asset investment fund indemnity obligations with the achievement of the regulatory NFA, allowing for the release of the fund to the investors.
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