Legacy Environmental Issues
Craig Smith, P.G.
Senior Geologist
July 9, 2013
What are Legacy Environmental Risks?
 Improperly closed or reclaimed 
drilling pits
 Leaking tank batteries, either acti...
Why a Concern to EOR Operators
 Developed prior to 
current regulations and 
BMPs
 Mature field often 
operated by small...
Acquisitions and Divestiture Trends
 2011
 Projections were high for 2011
 698 transaction
 $300.6B
 2012 
 Projecti...
Typical Legacy Issues and Costs
 Soil and groundwater 
impacts
 NORM
 Landfills/Boneyards
 Compliance 
 Safety/OSHA 
Best Management Practices to 
Reduce Risk
 Know what you 
are buying
 Negotiation of 
liability with seller
 Use of 
en...
Advantages of Knowing Legacy Risk 
Conditions
 Reduces risk by managing financial and 
business exposures
 Eliminates or...
Contact Information:
Craig Smith, P.G./George Mathes, P.E.
csmith@trihydro.com/gmathes@trihydro.com
307/745‐7474
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Legacy Environmental Issues

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Presentation for 2013 EORI CO2 Conference in Casper, WY July 9, 2013.

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Legacy Environmental Issues

  1. 1. Legacy Environmental Issues Craig Smith, P.G. Senior Geologist July 9, 2013
  2. 2. What are Legacy Environmental Risks?  Improperly closed or reclaimed  drilling pits  Leaking tank batteries, either active  or out of service   Junkyards/Boneyards/Abandoned  Drums  Abandoned  pipelines   Damaged well casing  Non‐compliant operations  Air permits and reporting  NPDES discharges  Out of date SPCC plans  OSHA 
  3. 3. Why a Concern to EOR Operators  Developed prior to  current regulations and  BMPs  Mature field often  operated by smaller  firms with limited staff  and resources  Priority is production  not environmental  Often overlooked by  regulators and  inspectors until notice  of the transaction is  public
  4. 4. Acquisitions and Divestiture Trends  2011  Projections were high for 2011  698 transaction  $300.6B  2012   Projections for steady growth  576 transactions  $321.5B    2013   Projected to moderate to 2011  levels Sources:  Deloitte Oil and Gas  Mergers and Acquisitions  Report, 2011 & 2012 and  RR  Donnelley, 2013 M&A Outlook.
  5. 5. Typical Legacy Issues and Costs  Soil and groundwater  impacts  NORM  Landfills/Boneyards  Compliance   Safety/OSHA 
  6. 6. Best Management Practices to  Reduce Risk  Know what you  are buying  Negotiation of  liability with seller  Use of  environmental  pollution liability  insurance  More capital for  drilling and EOR  
  7. 7. Advantages of Knowing Legacy Risk  Conditions  Reduces risk by managing financial and  business exposures  Eliminates or reduces unknown legacy  conditions   Allows risk to be managed proactively  Negotiated with seller as environment defect  Environmental liability insurance bridges gap  between buyer‐seller
  8. 8. Contact Information: Craig Smith, P.G./George Mathes, P.E. csmith@trihydro.com/gmathes@trihydro.com 307/745‐7474

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