Sale of gas properties near Pavillion cancelled

Nov 28, 2011

In early November, a Texas-based company called Legacy Reserves LP announced that it would purchase oil and gas properties in Fremont County: primarily properties owned by Encana in the Pavillion area. Late last week, Legacy Reserves pulled out of the deal.

A few years ago, residents of the town of Pavilion began complaining of health problems which they blamed on water contamination. In 2009, when the Environmental Protection Agency began sampling the area’s water, it found diesel and gasoline range organics at low levels, synthetic organic chemicals, high pH levels, and methane with chemical signatures similar to those in the gas production reservoir. There was so much methane, in fact, that it bubbled out of the EPA’s monitoring wells.

In early November, Legacy Reserves announced it would buy the gas properties that Encana owned. That sparked concern among residents about who would be responsible for the cleanup if the water contamination is linked to oil and gas production.

Late last week, Legacy Reserves backed out of the deal.

A spokesperson with Legacy Reserves did not return calls for comment, but Encana Public Relations officer, Randy Teeuwen issued a brief statement: "Although Encana retained responsibility for any outcome resulting from the ongoing groundwater investigation undertaken by EPA, Legacy is not prepared to go forward with the transaction, so they should comment about that."

In an official email, Mr. Teeuwen also mentioned that the sale ended “due to the continued attention surrounding the investigation, and uncertainty regarding further development.” He would not comment on whether Encana was searching for a new buyer.

The EPA hopes to have a report on the source of Pavillion’s water contamination after the holidays.