Revolution Pipeline explosion forces Marcellus producer into bankruptcy
Wednesday, May 22, 2019
EdgeMarc Energy Holdings, an independent producer backed by Goldman Sachs’s private equity arm and the Ontario Teachers Pension Fund, is filing for Chapter 11 bankruptcy, following an explosion in Energy Transfer’s Revolution Pipeline in Beaver County, Pennsylvania, according to Kallanish Energy.
“Since the explosion of the Revolution pipeline in 2018, EdgeMarc’s production has been significantly curtailed and the company has been unable to satisfy its long-haul firm transportation contracts,” said Callum Streeter, EdgeMarc’s CEO.
After reviewing possible alternatives to ensure the company’s long-term ability to develop natural gas and NGL-rich assets, the EdgeMarc board and management team has determined selling all of its assets is the best path forward for all stakeholders.
According to the Chapter 11 filing (reviewed by Kallanish Energy), EdgeMarc and eight affiliates filed for bankruptcy. The companies’ total creditors number between 1,000 and 5,000, total assets are between $100 million and $500 million, and liabilities range between $100 million and $500 million.
Learn more: Kallanish Energy > Pipeline explosion forces producer into bankruptcy
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Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
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What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
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Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.