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WLL » Topics » Market conditions or operational impediments may hinder our access to oil and gas markets or delay our production.These excerpts taken from the WLL 10-K filed Feb 28, 2008. Market
conditions or operational impediments may hinder our access to oil and gas
markets or delay our production.
In
connection with our continued development of oil and gas properties, we may be
disproportionately exposed to the impact of delays or interruptions of
production from wells in these properties, caused by transportation capacity
constraints, curtailment of production or the interruption of transporting oil
and gas volumes produced. In addition, market conditions or a lack of
satisfactory oil and gas transportation arrangements may hinder our access to
oil and gas markets or delay our production. The availability of a
ready market for our oil and gas production depends on a number of factors,
including the demand for and supply of oil and gas and the proximity of reserves
to pipelines and terminal facilities. Our ability to market our
production depends substantially on the availability and capacity of gathering
systems, pipelines and processing facilities owned and operated by
third-parties. Our failure to obtain such services on acceptable
terms could materially harm our business. We may be required to shut
in wells for a lack of a market or because access to natural gas pipelines,
gathering systems or processing facilities may be limited or
unavailable. If that were to occur, then we would be unable to
realize revenue from those wells until production arrangements were made to
deliver the production to market.
We
are subject to complex laws that can affect the cost, manner or feasibility of
doing business.
Exploration, development, production
and sale of oil and gas are subject to extensive federal, state, local and
international regulation. We may be required to make large
expenditures to comply with governmental regulations. Matters subject
to regulation include:
Under these laws, we could be liable
for personal injuries, property damage and other damages. Failure to
comply with these laws also may result in the suspension or termination of our
operations and subject us to administrative, civil and criminal
penalties. Moreover, these laws could change in ways that could
substantially increase our costs. Any such liabilities, penalties,
suspensions, terminations or regulatory changes could materially adversely
affect our financial condition and results of
operations.
Our
operations may incur substantial liabilities to comply with environmental laws
and regulations.
Our oil and gas operations are
subject to stringent federal, state and local laws and regulations relating to
the release or disposal of materials into the environment or otherwise relating
to environmental protection. These laws and regulations may require
the acquisition of a permit before drilling commences; restrict the types,
quantities, and concentration of materials that can be released into the
environment in connection with drilling and production activities; limit or
prohibit drilling activities on certain lands lying within wilderness, wetlands,
and other protected areas; and impose substantial liabilities for pollution
resulting from our operations. Failure to comply with these laws and
regulations may result in the assessment of administrative, civil, and criminal
penalties, incurrence of investigatory or remedial obligations, or the
imposition of injunctive relief. Under these environmental laws and
regulations, we could be held strictly liable for the removal or remediation of
previously released materials or property contamination regardless of whether we
were responsible for the release or if our operations were standard in the
industry at the time they were performed. Federal law and some state
laws also allow the government to place a lien on real property for costs
incurred by the government to address contamination on the
property.
Changes in environmental laws and
regulations occur frequently, and any changes that result in more stringent or
costly material handling, storage, transport, disposal or cleanup requirements
could require us to make significant expenditures to maintain compliance and may
otherwise have a material adverse effect on our results of operations,
competitive position, or financial condition as well as those of the oil and gas
industry in general. For instance, in response to studies suggesting
that emissions of certain gases, commonly referred to as greenhouse gases and
including carbon dioxide and methane, may be contributing to warming of the
Earth’s atmosphere, the U.S. Congress is actively considering legislation,
and more than a dozen states have already taken legal measures to reduce
emission of these gases, primarily through the planned development of greenhouse
gas emission inventories and/or regional greenhouse gas cap and trade
programs. Moreover, the U.S. Supreme Court only recently held in
a case, Massachusetts,
et al. v. EPA , that
greenhouse gases fall within the federal Clean Air Act’s definition of “air
pollutant,” which could result in the regulation of greenhouse gas emissions
from stationary sources under certain Clean Air Act programs. New
legislation or regulatory programs that restrict emissions of greenhouse gases
in areas in which we conduct business could have an adverse affect on our
operations and demand for our products.
Market conditions or operational impediments may hinder our access to oil and gas markets or delay our production. In connection with our continued development of oil and gas properties, we may be disproportionately exposed to the impact of delays or interruptions of production from wells in these properties, caused by transportation capacity constraints, curtailment of production or the interruption of transporting oil and gas volumes produced. In addition, market conditions or a lack of satisfactory oil and gas transportation arrangements may hinder our access to oil and gas markets or delay our production. The availability of a ready market for our oil and gas production depends on a number of factors, including the demand for and supply of oil and gas and the proximity of reserves to pipelines and terminal facilities. Our ability to market our production depends substantially on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third-parties. Our failure to obtain such services on acceptable terms could materially harm our business. We may be required to shut in wells for a lack of a market or because access to natural gas pipelines, gathering systems or processing facilities may be limited or unavailable. If that were to occur, then we would be unable to realize revenue from those wells until production arrangements were made to deliver the production to market. We are subject to complex laws that can affect the cost, manner or feasibility of doing business. Exploration, development, production and sale of oil and gas are subject to extensive federal, state, local and international regulation. We may be required to make large expenditures to comply with governmental regulations. Matters subject to regulation include:
Under these laws, we could be liable for personal injuries, property damage and other damages. Failure to comply with these laws also may result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties. Moreover, these laws could change in ways that could substantially increase our costs. Any such liabilities, penalties, suspensions, terminations or regulatory changes could materially adversely affect our financial condition and results of operations. Our operations may incur substantial liabilities to comply with environmental laws and regulations. Our oil and gas operations are subject to stringent federal, state and local laws and regulations relating to the release or disposal of materials into the environment or otherwise relating to environmental protection. These laws and regulations may require the acquisition of a permit before drilling commences; restrict the types, quantities, and concentration of materials that can be released into the environment in connection with drilling and production activities; limit or prohibit drilling activities on certain lands lying within wilderness, wetlands, and other protected areas; and impose substantial liabilities for pollution resulting from our operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, incurrence of investigatory or remedial obligations, or the imposition of injunctive relief. Under these environmental laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination regardless of whether we were responsible for the release or if our operations were standard in the industry at the time they were performed. Federal law and some state laws also allow the government to place a lien on real property for costs incurred by the government to address contamination on the property. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly material handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to maintain compliance and may otherwise have a material adverse effect on our results of operations, competitive position, or financial condition as well as those of the oil and gas industry in general. For instance, in response to studies suggesting that emissions of certain gases, commonly referred to as greenhouse gases and including carbon dioxide and methane, may be contributing to warming of the Earth’s atmosphere, the U.S. Congress is actively considering legislation, and more than a dozen states have already taken legal measures to reduce emission of these gases, primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap and trade programs. Moreover, the U.S. Supreme Court only recently held in a case, Massachusetts, et al. v. EPA , that greenhouse gases fall within the federal Clean Air Act’s definition of “air pollutant,” which could result in the regulation of greenhouse gas emissions from stationary sources under certain Clean Air Act programs. New legislation or regulatory programs that restrict emissions of greenhouse gases in areas in which we conduct business could have an adverse affect on our operations and demand for our products. | EXCERPTS ON THIS PAGE:
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