Case Study:

Quick Resolution for Unique Well Risk

AssuredPartners Energy

Quick Facts

Industry: Upstream Oil & Gas

Location: California

Type of Insurance: General Liability, Umbrella, Control of Well and Pollution Legal Liability

Valued Client Since: 2018

Problem

A large oil and gas company owning wells on a public high school property in the Los Angeles area filed for bankruptcy. During the bankruptcy court proceedings, the judge ruled that as the wells were on the high school's property, ownership of those wells would transfer to the high school. To make matters more complicated, these wells were located adjacent to a large hospital in a highly populated area, and several of them had increasing pressures. The school district had no interest in continuing operations of these wells, and just wanted to get them Plugged & Abandoned (P&A) as quickly as possible.

Solution

The challenge was finding a market willing to insure a policyholder that had no oil and gas experience in an area where one wrong step could trigger a loss in excess of $50MM. In short order, a proposed P&A program was developed in partnership with a leading oil and gas services provider. The AssuredPartners team then immediately started working with both our domestic and London markets to get them up to speed on the situation and walk them through why this was indeed a risk they could get comfortable with.

Results

In just over two weeks time, the AssuredPartners team was able to secure all lines of coverage required to ensure the appropriate risk transfer for the school district. With the insurance program in place, the school district was able to engage the service contractor to immediately start relieving the increasing pressures on the problem wells, and then initiate the formal P&A operations for all of the wells located on their property.