What is the status of the Aliso Canyon natural gas leak?

The leak, discovered on October 23, 2015, at well SS25, has not been stopped by direct plugging attempts. Sempra is drilling a relief well to plug SS25 at its base, with an estimated completion date between the end of February and the end of March 2016. A back-up relief well is also being prepared.

What are the estimated costs and financial implications for Sempra Energy?

As of December 31, 2015, Sempra estimates it has spent approximately $50 million on leak mitigation, community relocation, and relief well drilling. The company faces potential fines, penalties, and significant litigation costs. However, Sempra has insurance policies with over $1 billion in coverage that it expects to cover many of the related claims and losses.

What actions are being taken by the State of California in response to the leak?

The Governor of California declared a state of emergency in Los Angeles County. This proclamation mandates that Sempra maximize gas withdrawals, implement safety measures, refrain from injecting gas into Aliso Canyon until a safety review is complete, and ensure accountability for costs. It also calls for strengthened oversight of all gas storage facilities in the state through emergency regulations.

How is Sempra addressing the impact on the local community?

Sempra is providing temporary relocation assistance to residents in the Porter Ranch community who request it and has agreed to a formal relocation plan. The company is also providing air filtration and purification systems to residents and is working to mitigate the odorant impact of the gas leak.

SRE/SREA 8-K SEC Disclosure

Summary

This 8-K filing from Sempra Energy (SRE) and its subsidiary Southern California Gas Company (SoCalGas) addresses the ongoing natural gas leak at the Aliso Canyon storage facility discovered on October 23, 2015. The primary focus is on the company's efforts to stop the leak, the community and environmental impacts, and the response from California state authorities. Key developments include the company's shift from attempting to plug the leaking well directly to drilling a relief well, with an estimated completion timeframe of February to March 2016. The filing also notes the Governor of California's declaration of a state of emergency for Los Angeles County, which mandates specific actions for SoCalGas, including maximizing withdrawals, implementing safety measures, and ensuring accountability for costs. The report highlights ongoing investigations, litigation, and community relocation efforts, underscoring the significant financial and operational challenges Sempra Energy faces due to this incident.

Key Highlights

1A natural gas leak was discovered at Sempra's Aliso Canyon facility on October 23, 2015, at well SS25.
2The company has been unable to stop the leak with direct plugging attempts and is now drilling a relief well, expected to be completed between late February and late March 2016.
3The Governor of California declared a state of emergency in Los Angeles County due to the leak, issuing orders to stop the leak, protect public health, ensure accountability, and strengthen oversight of gas storage facilities.
4Sempra estimates it has spent approximately $50 million to date addressing the leak, community impacts, and mitigation efforts.
5The company has secured insurance policies with combined limits exceeding $1 billion that it believes will cover many of the claims and losses associated with the incident.
6SoCalGas is providing temporary relocation assistance to affected residents in the Porter Ranch community, with approximately 2,500 households relocated and more requests pending.
7Multiple governmental agencies are investigating the incident, and the company faces potential fines, penalties, and significant litigation, including class action lawsuits seeking damages.

SEMPRA 8-K Report, Corporate Update (Jan 7, 2016)

Summary

Key Highlights

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