An independent Exploration and Production (E&P) company operates under the business model of acquisition, optimization and divesture of Oil and Gas Assets across the US. The Company raises capital via dedicated institutional Investment Funds.
The Company’s Southwest portfolio suffered a long-term, legacy groundwater contamination liability. Over a period of more than eight years, the Company’s traditional environmental consultant was unable to resolve the liability. A contractual indemnity trigger on the portfolio’s Investment Fund required full regulatory release for the Southwest portfolio; thus the fund was held captive until the legacy groundwater chloride contamination liability was resolved. The Company needed a guaranteed and timely solution to release the multi-million dollar Investment Fund.
TRC developed an innovative regulatory strategy and structured a Guaranteed Fixed-Price, Incentive-Based Risk Mitigation Agreement to aggressively pursue and achieve regulatory closure.
Additionally, TRC revamped the existing groundwater extraction system and implemented a field-wide mapping survey and risk evaluation to achieve No Further Action closure (NFA) from the state regulator.
Regulatory Closure (NFA) Achieved. TRC achieved regulatory closure (NFA) for this legacy liability within 18 months vs the prior incumbent‘s 8 years of unsuccessful progress.
Balance Sheet Relief. With the achievement of regulatory closure, the Company concluded that it could reduce the environmental liabilities reported on its Balance Sheet by more than $1 Million.
Investment Fund Release. The regulatory release achieved by TRC NFA satisfied Investment Fund indemnity obligations, allowing for the release of the >$20MM fund for new Strategic Re-Investment.
Contact TRC today for more information about our services or this project.