Due Diligence: The Importance of a thorough Hydrologic Assessment and Pumping Tests

Acquisition of a commercial or private ranch, farm, dairy, or any other agricultural, commercial, or industrial operation involves a pre-purchase due diligence process which commonly includes water right research and evaluation and pumping tests (well tests). The purchasing party has the opportunity to assess whether:

• Sufficient water is available to support full development/expansion of operations on the property

• The property has legitimate surface/groundwater water rights (were the water rights transferred/sold off property?)

• The wells, dams, ditches, or any other water delivery system on the property is capable of pumping/delivering the “wet water” that is available in the “paper water,” or water rights

• The water quality is suitable for the needs of the operation

When considering a potential investment dependent on the consistent availability of water, an understanding of the current conditions will prevent being “blind-sided” by costly repairs and replacements of equipment critical to the operation. A thorough hydrologic assessment and well inventory will reveal potential water production issues and allow the buyer to consider future costs when evaluating the viability of the property. Additionally, an understanding of the water rights associated with the property, including current/future adjudication proceedings, priority dates, association fees, and water right transfer/change losses is crucial to maximizing efficiency in government transactions and long-term development strategies.

A hydrologic assessment can include:

• Verification of well locations (all currently in use and not in use wells) and the condition of each production well

• Pumping tests on production wells to evaluate aquifer characteristics and sustainable yield (how much “wet water” is available under current conditions – do new wells need to be budgeted?)

• Monitoring power consumption during tests to develop energy/cost saving pumping schedules

• Drilling one or more stratigraphic test wells to determine aquifer thickness and proper design/cost of new production wells

• Utilization of the newly acquired data to optimize new well sites and develop a well replacement schedule as needed

• Researching the validity and priority of water rights and declarations

Our experienced staff can develop an analysis to fit the needs of your operation, outlining “what you should know” about your investment property.  GGI can also assist your operation with growth, including environmental, water level, and production water monitoring, design and siting of replacement wells, reuse and return flow credit plans, water conservation, and legal support.

GGI has completed detailed hydrologic and environmental assessments of properties ranging from less than one acre to 10,000+ acres and provided development and operational strategy, budget considerations, and perhaps most importantly, peace of mind for many family and corporate investors.