Due Diligence for Petroleum Assets

Trihydro supported a confidential client in acquiring over 1,500 leases of petroleum assets across a three-state area within the Illinois Basin. The project included evaluating the leases, which were predominantly located in rural agricultural areas with scattered residential development, and classifying risk levels for each.

Trihydro reviewed available files and background materials and conducted field evaluations to verify current site conditions at the time. Given the number of sites and the age of many of the petroleum storage facilities, there were numerous operational and environmental issues identified with many of the leases.

The findings were used to develop a relative risk ranking of the sites to determine which sites presented considerable environmental risks and might require more invasive evaluation to document environmental defects. Based on the hazard ranking and assumed/identified environmental defects associated with each of the assets, remedial cost estimates were prepared on a lease-by-lease basis. Trihydro’s role in categorizing, characterizing, and estimating the environmental liabilities facilitated completion of the transaction between the buyer/seller, including obtaining environmental insurance for the accrued liabilities.