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Assessment of Environmental Conditions in Oil & Gas Transactions

Mark P. Hemingway, Due Diligence in Oil & Gas Transactions

Upstream oil and gas assets commonly include production wells, disposal and injection wells, gathering systems, field processing and treatment facilities (e.g., gas plants, tank batteries, heater treaters), and compressors. Environmental due diligence of such assets may be prompted by their purchase, sale, or financing. The usual objective of environmental due diligence is to identify and (to the extent practicable) quantify suspected or known environmental liabilities in a manner that allows them to be addressed within the transaction. Environmental due diligence of upstream oil and gas assets do not typically include sampling and analysis of environmental media (soils, surface water, groundwater, and sediment), but would consider any sampling data that already exists.