Nov 21, 2013, 2:41pm CST
Black Elk Energy Offshore Operations LLC has spent millions so far this year on costs associated with the 2012 explosion at its West Delta 32 Gulf of Mexico platform.
Houston Business Journal
Black Elk Energy Offshore Operations LLC has spent millions so far this year on costs associated with the 2012 explosion at its West Delta 32 Gulf of Mexico platform, and it’s still dealing with the repercussions of the incident.
According to regulatory filings, Black Elk spent $4.7 million in the third quarter – and a total of $12.4 million in the first nine months of the year – on costs associated with the Nov. 16, 2012, explosion, which killed three subcontractor workers. The Houston-based company operated the platform, located 17 miles southeast of Grand Isle, La.
In addition to reporting a net loss of $18.4 million for the third quarter, Black Elk noted the following in its filing with the U.S. Securities and Exchange Commission:
Total oil, natural gas and plant product production declined 18 percent for the third quarter and 23 percent for the first nine months of year, compared to the same periods a year earlier, “as a result of downtime in the fields requiring hot work, which was delayed due to the (Bureau of Safety and Environmental Enforcement) requirements for approval after the West Delta 32 incident, pipeline repairs, and the asset field sales to Renaissance on March 26, 2013, and July 31, 2013. The year-to-date variance was also a result of a longer winter weather season.”
“As of Nov. 12, 2013, several civil lawsuits have been filed as a result of the West Delta 32 Incident. Š We believe we have strong defenses and cross-claims and intend to defend ourselves vigorously.”
“On Oct. 15, 2013, the Department of Justice, U.S. Attorney’s Office issued a subpoena pertaining to all physical evidence collected and maintained by (Black Elk) and ABSG Consulting as part of the investigation of the West Delta Incident.”
In August, Black Elk released the results of the ABSG investigation, which said contractor Grand Isle Shipyard violated its contract by hiring a subcontractor to perform construction work.
Black Elk filed its third-quarter report on Nov. 14, the same day BSEE issued incident of noncompliance citations against the company and its contractors on the West Delta 32 platform. Black Elk said in a Nov. 15 statement it “does not agree with the basis for the INC (citations) and is evaluating its options for response.” The companies have 60 days to appeal the citations.
Earlier this month, BSEE released a report of its investigation into the incident, and Black Elk said in a statement that it is fully cooperating with BSEE in the investigation and will be carefully reviewing the report.
“Black Elk Energy always has in its thoughts and prayers the victims of this tragic accident last November,” John Hoffman, Black Elk’s president and CEO, said in the statement.
Special thanks to Richard Charter