Energy Startup Will Play Crucial Role in Helping the Fossil Fuel Industry Proactively Reduce Methane and Other Greenhouse Gas Emissions
HOUSTON–(BUSINESS WIRE)–Oil & Gas industry veteran Tony Sanchez III, Founder & former CEO of Sanchez Energy Corporation, today announced the official launch of OneNexus Environmental. The forward-thinking energy start-up is a financial technology (fintech) energy company created as a first-of-its-kind full platform for solving the massive environmental and financial problem of providing and planning for the management of energy company Asset Retirement Obligations (AROs) related to the decommissioning of the rapidly growing backlog of non-producing and orphaned oil & gas wells.
OneNexus offers its E&P clients the equivalent of a universal life insurance policy for their oil & gas wells, whereby once the well, asset or field reaches the end of its productive life, the E&P operator has the option to transfer title of the asset to OneNexus permanently. At that point, OneNexus assumes the financial and operational responsibility for properly plugging and abandoning the well or asset and for performing all necessary surface and environmental remediation work, thereby assuring that the risks and compliance issues associated with the retirement of oil & gas assets are properly met and funded. Once title to the asset is transferred to OneNexus, the E&P company will have no further decommissioning or environmental liabilities associated with the asset.
It will accomplish this heretofore unaddressed problem by relying on data science, predictive analytics, risk mitigation and cutting-edge plugging and remediation technologies needed to not only pay for but to manage energy company AROs in the permanent decommissioning of an ever-increasing backlog of non-producing wells.
“The drastic decline in energy demand that arose from the pandemic forced many operators to walk away from their wells,” Sanchez said. He added, “When orphaned wells started multiplying around the world overnight, what was previously the so-called elephant in the oilfield could no longer be ignored.”
Last year, Reuters estimated nearly 30 million problematic wells around the world emitted some 2.5 million tonnes of methane. According Wood Mackenzie, fixing this problem is going to take at least $50 trillion to meet the goals of the Paris climate accord by 2050. “OneNexus is in a unique position to apply deep industry knowledge to the retirement of oil & gas fields that are no longer producing by bringing disparate financial and technological solutions together to vertically aggregate risk into a single platform that will save producers time and money while helping to preserve the planet for future generations,” said Sanchez.
Institutional investors representing a collective $5.35 trillion in assets recently wrote a letter calling on the Biden administration to get tougher on methane emissions as it seeks to address climate change. If left unchecked, these greenhouse gas emissions have the potential to impede the role that natural gas will play in a decarbonizing economy. In the letter, a number of environmental policies were recommended that both the industry and investment community could take to address the growing problem and specifically pointed to the plugging of inactive wells as a responsible step that would be good for both business and the environment.
To that end, OneNexus will also introduce a 501(c)(3) non-profit foundation that represents a key component of the company’s mission to preserve and improve the environment through the reduction of harmful greenhouse gasses – calling on the international community to do its part in addressing the problem.
Bringing to bear extensive oil & gas sector insight, Sanchez assembled a dynamic team of energy industry specialists and financial professionals, who – backed by a network of premier subject matter experts in petroleum engineering, chemical engineering, data science, and systems management – have positioned themselves at the forefront of innovative efforts to solve the seemingly insurmountable dilemma: how to motivate, incentivize and fund energy companies that want to be part of the solution. Decommissioning wells is a complicated process with numerous environmental, legal and financial requirements and obligations. All too often, companies are unable to fulfill their obligations, leaving state governments and, ultimately taxpayers, responsible for the bill.
OneNexus has partnered with Houston-based private equity firm BlackGold Capital Management LP, a leading energy industry investment firm partially owned by KKR (NYSE: KKR) that will play an integral role in transforming the OneNexus vision into a reality.
“Existing solutions are inadequate,” Sanchez said. “We started a company that is capable of tackling the problem head-on and that enables energy companies to proactively be part of the solution.”
ABOUT ONENEXUS ENVIRONMENTAL
OneNexus Environmental was created to help oil & gas companies systematically and responsibly manage their Asset Retirement Obligations (AROs) and decommissioning activities. The new venture was started by a network of seasoned energy industry and financial experts to serve as an Environmental, Social and Governance (ESG) solutions provider utilizing a fintech model to solve the complex problem of decommissioning uncapped onshore and offshore wells in a safe, reliable and cost-effective manner. Headquartered in Houston, Texas – the Energy Capital of the World – OneNexus is a Benefit Company whose purpose is to address the mounting number of inactive and orphaned wells which contribute to greenhouse gas emissions and financial liabilities of the energy industry. For more information, please visit www.onenexusenvironmental.com.
Read the press release at Businesswire.