NEW: Permian Confirms Methane Release After Hunterbrook Investigation – Till Daldrup
Hunterbrook Capital exposes Permian Resources' massive methane leak near Carlsbad, NM, revealing 15x higher emissions, toxic benzene exposure, and potential environmental and health risks across 80-square-mile region.
A detailed investigative report by Hunterbrook Capital reveals that Permian Resources concealed a prolonged hazardous gas leak at its Central Tank Battery near Carlsbad, New Mexico, for eight months while independent satellite data shows the company dramatically underreported emission rates, by as much as 15 times, potentially exposing over 30,000 residents to a toxic cocktail of carcinogens including benzene across an 80-square-mile area.
Company & Position Information
Ticker Symbol: PR (Permian Resources Corporation)
Research Firm Position: Hunterbrook Capital holds a short position in Permian Resources and stands to benefit if the stock price declines.
Report Source: Hunterbrook Capital - Original Research Report
Core Thesis
- Systematic Underreporting: Independent satellite data from Carbon Mapper revealed Permian's actual methane emission rates were 6-15 times higher than the company's self-reported figures, with January 20 emissions reaching approximately 83,300 cubic feet per hour versus Permian's reported 13,200 cubic feet per hour.
- Prolonged Toxic Exposure: The leak released a hazardous mixture of methane, benzene, toluene, ethylbenzene, xylenes, and hexane from January 20 through February 25, creating a plume spanning nearly 80 square miles and potentially exposing over 30,000 people including schoolchildren.
- Delayed Disclosure & Regulatory Scrutiny: Permian Resources waited eight months to disclose the incident publicly and only submitted over two dozen emissions reports nine days after receiving regulatory inquiries from New Mexico's Oil Conservation Division, which is now weighing additional compliance actions.
- Internal Breakdown Admitted: Permian attributed the month-long delay in fixing a leaking valve to an "internal communications breakdown," suggesting systemic operational failures despite field personnel flagging the issue.
- Incomplete Hazardous Pollutant Reporting: Permian's October emissions filings failed to fully list all hazardous air pollutants released, particularly toxic compounds like benzene that are standard in produced gas.
- Questionable Community Relations Timing: Just two days after Hunterbrook published its initial methane investigation, Permian Resources made a $200,000 donation to Carlsbad for a "modular vehicle barrier," approved by the city budget committee, raising concerns about reputation management during expansion efforts.
- Aggressive Expansion Amid Crisis: Despite the unresolved environmental incident and regulatory investigation, Permian is proceeding with the Water Buffalo Unit expansion featuring 10 new oil wells near residential neighborhoods, with permits approved over community objections.
Notable Findings & Intriguing Details
- Satellite Detective Work: Carbon Mapper's satellite spectrometer technology independently detected and quantified the leak, demonstrating how third-party monitoring can expose significant discrepancies in corporate self-reporting of environmental incidents.
- Schools in the Plume: The toxic gas plume's 80-square-mile footprint encompassed multiple schools in the Carlsbad area, putting vulnerable populations of children at potential risk from carcinogenic benzene exposure.
- The Four-Day Pause Mystery: The leak had a brief four-day pause during its 36-day duration, though the report doesn't clarify whether this was due to partial repairs or operational changes.
- Drone Surveillance Evidence: Hunterbrook deployed drone imagery in September to document construction progress on Permian's expansion project, showing the Water Buffalo Unit development advancing despite ongoing regulatory concerns.
- Timing of Generosity: The city budget committee approved Permian's $200,000 community donation on September 26, exactly two days after Hunterbrook published its first article on the methane leak, with Mayor Rick Lopez publicly praising the "partnership."
- Vapor Recovery System Failure: The leak originated from a faulty valve specifically on the vapor-recovery piping system, equipment designed to capture and control gas emissions, highlighting an ironic failure of environmental protection infrastructure.
- PSE Healthy Energy Validation: Independent researchers from PSE Healthy Energy conducted gas sampling and plume dispersion modeling based on local weather patterns, providing scientific corroboration of the leak's composition and geographic reach.
- Regulatory Response Lag: New Mexico's Oil Conservation Division only began raising formal questions after Hunterbrook's investigation surfaced, suggesting potential gaps in proactive regulatory monitoring.
Frequently Asked Questions (FAQ)
What exactly happened at Permian Resources' facility in New Mexico?
Permian Resources experienced a gas leak at its Central Tank Battery near Carlsbad, New Mexico, that began on January 20 and continued through February 25. The leak released methane along with hazardous air pollutants including benzene, toluene, ethylbenzene, xylenes, and hexane across an area spanning approximately 80 square miles, potentially exposing over 30,000 residents.
How did Permian Resources' reported emissions compare to independent measurements?
This highlights significant discrepancies identified by Carbon Mapper's satellite data. On January 31, Permian reported emissions of 13,200 cubic feet per hour, while Carbon Mapper's measurements indicated approximately 83,300 cubic feet per hour, roughly six times higher. By February 7, the independent measurements showed emission rates more than 15 times higher than Permian's figures.
What caused the delay in fixing the leak?
Permian Resources attributed the delay to an "internal communications breakdown." Field personnel had submitted maintenance requests to repair the leaking valve on the vapor-recovery piping, but the company's internal escalation protocols were not properly followed, contributing to the month-long delay in addressing the issue.
How long did Permian Resources wait to disclose the incident?
Permian Resources delayed public disclosure of the leak for approximately eight months. The company only submitted over two dozen emissions reports nine days after receiving inquiries from New Mexico's Oil Conservation Division, raising regulatory compliance concerns.
What health risks does this leak pose to nearby residents?
Citing analysis from PSE Healthy Energy, indicates that the leak released a toxic mixture of hazardous air pollutants. The research specifically highlights benzene, a known carcinogen, among the compounds released. The plume potentially exposed over 30,000 people, including residents and students at several schools in the affected 80-square-mile area.
Were all pollutants properly reported by Permian Resources?
Permian's October emissions filings reportedly did not fully list all pollutants released. Hazardous compounds such as benzene, ethylbenzene, toluene, and xylenes were noticeably omitted from some compositional analyses, despite these pollutants being detectable in nearly all produced gas in the industry.
Is Permian Resources facing regulatory consequences?
New Mexico's Oil Conservation Division has raised questions about the incident and regulators are weighing potential additional compliance actions. Ongoing regulatory scrutiny, though specific penalties or enforcement actions had not been finalized at the time of the report.
What is Permian Resources' expansion plan in Carlsbad?
Permian Resources is proceeding with the Water Buffalo Unit expansion in Carlsbad, featuring 10 new oil wells and a central tank battery. Permits were approved by the Carlsbad City Council in June despite neighborhood concerns about drilling near residential areas, with drone imagery from September showing construction progressing toward an anticipated fall completion.
What was the significance of Permian's $200,000 donation to Carlsbad?
The timing of this donation is highlighted, noting that the Carlsbad city budget committee approved Permian's $200,000 contribution for a modular vehicle barrier on September 26, exactly two days after Hunterbrook published its first article about the methane leak. This donation, publicly praised by Mayor Rick Lopez as a "partnership," may represent an effort to strengthen community relations amid the controversy.
How was the leak initially discovered?
The methane leak was first identified through satellite spectrometer technology operated by Carbon Mapper, an independent monitoring organization. This third-party detection revealed discrepancies in Permian's self-reported data and played a crucial role in exposing the incident's true scope.
Did Permian Resources respond to Hunterbrook's findings?
Permian Resources did not provide comment in response to their investigation and inquiries about the incident.
What makes this incident particularly concerning for investors?
The delayed disclosure, significant underreporting of emission rates compared to independent measurements, admitted internal communications failures, and ongoing regulatory scrutiny raise concerns about operational transparency and management effectiveness. These factors could create investor uncertainty, particularly as the company pursues aggressive expansion plans while facing unresolved environmental compliance issues.
Important Disclosure
This summary is based on investigative research conducted by Hunterbrook Capital and does not constitute original research by our organization. The full detailed analysis, methodology, supporting evidence, and complete findings are available in the original report published by Hunterbrook Capital.
Conflict of Interest Disclosure: Hunterbrook Capital has disclosed that they hold a short position in Permian Resources Corporation (PR) and stand to benefit financially if the stock price declines. Readers should consider this financial interest when evaluating the research.
Original Research Credit: This analysis was authored by Hunterbrook Capital. For complete details, supporting documentation, and the full investigative report, please visit the original source: https://hntrbrk.com/permian-2/
Not Investment Advice: This summary is provided for informational purposes only and should not be construed as investment advice. Readers should conduct their own due diligence and consult with qualified financial advisors before making any investment decisions.
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