MDC Energy Goes Bankrupt, $40 Million To Clean Up Its Wells, CEO Gets $8.5 Million Payout

[hatrack]

The day the debt-ridden Texas oil producer MDC Energy filed for bankruptcy eight months ago, a tank at one of its wells was furiously leaking methane, a potent greenhouse gas, into the atmosphere. As of last week, dangerous, invisible gases were still spewing into the air. By one estimate, the company would need more than $40 million to clean up its wells if they were permanently closed. But the debts of MDC’s parent company now exceed the value of its assets by more than $180 million.

In the months before its bankruptcy filing, though, the company managed to pay its chief executive $8.5 million in consulting fees, its top lender, the French investment bank Natixis, later alleged in bankruptcy court.

Oil and gas companies in the United States are hurtling toward bankruptcy at a pace not seen in years, driven under by a global price war and a pandemic that has slashed demand. And in the wake of this economic carnage is a potential environmental disaster — unprofitable wells that will be abandoned or left untended, even as they continue leaking planet-warming pollutants, and a costly bill for taxpayers to clean it all up.

Still, as these businesses collapse, millions of dollars have flowed to executive compensation. Whiting Petroleum, a major shale driller in North Dakota that sought bankruptcy protection in April, approved almost $15 million in cash bonuses for its top executives six days before its bankruptcy filing. Chesapeake Energy, a shale pioneer, declared bankruptcy last month, just weeks after it paid $25 million in bonuses to a group of executives. And Diamond Offshore Drilling secured a $9.7 million tax refund under the Covid-19 stimulus bill Congress passed in March, before filing to reorganize in bankruptcy court the next month. Then it won approval from a bankruptcy judge to pay its executives the same amount, as cash incentives.

EDIT

https://www.nytimes.com/2020/07/12/climate/oil-fracking-bankruptcy-methane-executive-pay.html?action=click&module=Top%20Stories&pgtype=Homepage

[Finishline42]

1. Is there a permit for each well drilled?

When will states start making drillers post performance bonds based on status of the well.

One amount at the beginning

Higher amount after the well starts producing

LLC's are to easy to walk away from.

Alberta stats

Alberta has an estimated: 172,000 active wells. 91,000 inactive wells. 73,000 abandoned wells.

Texas has 187,401 active oil wells.

The Railroad Commission of Texas shuttered 1,700 abandoned oil and gas wells over the past year, up from 1,300 over the same period last year, the Railroad Commission reported Friday. from a Sept 2019 story.