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Liability Assessment Project

Challenge
A privately owned oil and gas producer was evaluating an acquisition package consisting of 115 wellsites and small facilities. As part of their due diligence program, they asked Earthmaster to assess the environmental status of each wellsite and facility to estimate their overall liability and exposure. In addition, the client wanted to determine if there were any singular ‘material’ environmental issues that would require a substantial expenditure to resolve in the near or long term.

Solution
Time frames associated with environmental assessments for property acquisitions or divestitures are always tight. Earthmaster quickly assembled an experienced team of in-house consultants who immediately reviewed available files and previous environmental assessments for all sites. Historical air photo reviews were conducted at the Alberta Air Photo repository where no wait time for ordering and delivery of photos was necessary. Site visits were subsequently conducted on the majority of sites. Within 22 days, the liability assessment was complete and the report was delivered to the client.

Outcome
The deal closed. Based upon Earthmaster’s assessment, the client was able to negotiate a $4.5 million reduction in the purchase price. This was due primarily to two significant and material environmental issues that Earthmaster identified. The cost of the liability assessment was $34,000 - the return on investment for the client was significant!

Contact Perry Gerwing at perry.gerwing@earthmaster.ab.ca or 403-201-5111 (ext.230) for more information on our Liability Assessment services.