ABOUT:
In 2019, EDGE Engineering & Science, LLC was selected to help an upstream oil and gas startup based in Texas assess the environmental liabilities of a potential acquisition, mitigate potential risks, and facilitate the integration process after the purchase was final.
The target acquisition held several major assets including a large Texas oilfield with between 400 and 500 wells, a natural gas treating plant that held a Title V Operating Permit, dozens of tank batteries, and over 600 miles of gathering system pipelines.
PROBLEM:
With so many oil and gas assets to consider, determining if they posed environmental liabilities—and the potential costs associated with those liabilities—would be a massive undertaking requiring expertise in the areas of environmental regulations and the petroleum industry.
The client needed to know, within months, which assets should be purchased, and which could put the client at risk of millions of dollars in environmental liabilities.
Because the acquisition could include the purchase of land and a gas treatment plant, the client also needed protection from unforeseen environmental issues that could arise down the road.
The complexities of the pending acquisition were not the client’s only challenges. As a start-up, the company did not have a health, safety, and environment (HSE) department in place to ensure that it had the plans, permits, and standard operating procedures necessary to comply with the myriad environmental regulations it would be responsible for going forward.
SOLUTION:
Immediately after the client reached out, EDGE expanded its resources to ensure that it had the capacity to meet the client’s needs quickly and efficiently.
EDGE came in at the early stages of the acquisition process (Seller’s pre-divestiture virtual data room) and began revealing the environmental issues that needed to be addressed on Day 1.
Working closely with the client during the due diligence phase, EDGE helped determine which assets to purchase and which were likely to pose costly environmental liabilities.
From there, EDGE team members applied their knowledge of the target acquisition’s assets to help write a purchase agreement that indemnified the client from responsibility for future environmental issues once the acquisition was finalized.
After the initial acquisition phase, EDGE became part of the client’s transition team and began working side by side with the client to transfer operations. EDGE helped write HSE processes and procedures, operations manuals, and standard operation procedures, as well as air permits and DOT pipeline permits.
RESULTS:
Turning to EDGE early in the acquisition process allowed the client to fully capitalize on the services and expertise EDGE offers.
EDGE’s extensive due diligence measures helped the client move forward with its acquisition while avoiding nearly a half-billion dollars in environmental liabilities.
Because of EDGE’s assistance with the client’s purchase agreement, the client is now indemnified from future environmental liability.
EDGE helped the client save considerable time by developing pertinent environmental policies and procedures, and shared them with management in the form of high-level handbooks.
EDGE’s expertise in multiple EHS fields will remain valuable to the client going forward, as EDGE continues to function as the client’s HSE department.
ABOUT EDGE:
EDGE Engineering & Science, LLC is a privately-owned environmental consulting firm, established in 2010 with the primary goal of providing high quality environmental engineering and scientific consulting services.
EDGE offers a wide range of services and expertise to help clients successfully navigate the complex landscape of environmental regulations. Serving the energy, refining, chemical, oil and gas, manufacturing, power, and transportation industries across the U.S., our dedicated team of highly experienced engineers and scientists provides personal and responsive service and valuable insights to keep your project moving forward. From environmental permitting for capital projects, through environmental compliance for operations, we are the trusted advisors who can successfully address all of your environmental challenges.
For more information about EDGE Engineering & Science, please contact us at 832.772.3000 or visit www.edge-es.com