Environmental due diligence is a fundamental step during mergers and acquisitions transactions that must be completed with care to identify, understand, and assess potential environmental liabilities. Braun Intertec provided due diligence support on a 100-year-old oil field spanning more than 30,000 acres in Gonzales County, Texas. The Oil Field Services Firm (OFSF) hired Braun Intertec to assist in the potential stock acquisition of an upstream production company. The OFSF required an evaluation of the assets worth, the liabilities of the stock, the current worth of the production field, and the present liabilities associated with operations.
Braun Intertec performed due diligence activities including Phase I Environmental Site Assessments for numerous parcels within the 30,000-acre area. To streamline this assessment, we utilized a digital application called Fulcrum that allowed for electronic reporting and digital organization of surveyed assets. Our consultants reviewed undeveloped parcels as well as already developed parcels rife with oil wells, injection wells, water wells, and other oil & gas operations. To view operations on a larger spatial basis, we employed unmanned drone technology (UDT) was employed to scan these parcels aerially.
The age of the oilfield presented a few challenges in the evaluation. Some infrastructure was more than 100 years old with spotty construction details, while new San Antonio Water System reinjection wells were operating in adjacent areas. The assessment of past and future liabilities along with identifying the infrastructure assets was crucial in the client understanding how the acquisition might materially affect their balance sheet.
Braun Intertec provided high-quality acquisition due diligence that utilized real-time electronic reporting, UDT assistance to assess in difficult topography, Monte Carlo simulations to assess future liabilities, and the business acumen to translate this into valuable information for the end user. Lastly, we consulted on the social and environmental aspects that could potentially affect the success of the acquisition. Our evaluation provided the client with the necessary information to make an informed decision on whether to invest in this acquisition or pursue other potential liability-limiting opportunities such as an asset sale or joint venture.
For more information on this topic, please join us on December 9th for our live webinar, “Business Risk: How Environmental Liabilities, Compliance, and Development Fit into Mergers and Acquisitions” with Andy Adams, CHMM and Chris Thompson, PE.
