Upstream Oil and Gas E&P Asset Acquisition Buy‐Side Due Diligence and Post-Closing Support

Project Challenges:

An institutional investor teaming with independent E&P company was pursuing the acquisition of an upstream O&G asset located in Southwest Kansas which consisted of a combination of 650+ oil and natural gas wells and ancillary production operations facilities. The client needed to thoroughly evaluate significant potential environmental related production constraints associated with pending Federal and State  EPA/EIS determinations specific to the lesser prairie chicken habitats as well as air emissions and SPCC non-compliance. The client requested site inspections for all sites and to conduct extensive environmental due diligence and liability assessment within 30 days for sale closing.

TRC Solutions:

• A team of subject matter experts was assembled (Air, Water, Waste, Remediation, Compliance, NEPA, EIS) to thoroughly evaluate the specific areas and assess the associated risks as well as implement an assetwide inspection program consisting of a team of 6 site inspectors equipped with I‐pads and proprietary data collection tools and catalogued over 650 sites in one week.
• We assisted buyer in the transaction Purchase & Sell Agreement (PSA) negotiations by providing supporting environmental liability evaluation basis such that the buyer was able to successfully submit an Environmental Defects Notice pursuant to the PSA and obtain a purchase price reduction of over $1MM dollars to address the identified environmental conditions.

Client Benefits:

• TRC developed and provided the buyer with a comprehensive asset geo-database that included site GPS mapped locations for the 650+ sites including over 2,660 site photos. We also were able to provide regulatory compliance assurance with timely SPCC filings upon transaction completion.
• As a result of TRC’s diligence efforts, Buyer was able to timely evaluate and successfully complete the $138MM acquisition within the original 30-day contract period.