Asset Acquisitions and Divestitures in the Oil and Gave Industry

An RR&A Transaction Newsletter Series

Transactions: An Overview

The COVID-19 pandemic and associated fluctuations in commodity pricing have sent a wave of distress across the oil and gas industry, causing some participants to restructure and/or dispose of non-core or distressed assets.  The exploration and production sector took the brunt of the blow, forcing operators and service providers to find new and creative ways to do more with less. While many of the larger players looked to divest, smaller players have seen opportunities to add to their holdings at favorable prices.  Despite the uncertainty in the market, in 2020, RR&A successfully negotiated over $113 million in deal volume for our clients, accounting for over 1,500 oil and gas wells. Now with commodity prices on a strong uptick, companies of all sizes are racing against time to capitalize on their investments. 

This newsletter is the first in a series that aims to break down the major steps of acquisitions and divestitures of oil and gas assets (“Asset Transaction(s)” and also generally referred to herein as a “deal”) into plain English, providing buyers, sellers and industry participants a high-level overview of the process. Please keep in mind that each deal is different.  This newsletter is intended to be a helpful reference, but not a comprehensive guide.  Further, to keep things simple, this series will not address the particular complexities and requirements that public companies must meet.  Please feel free to reach out to us with questions specific to your deal.

The diagram above lays out a high-level overview of the basic steps involved in Asset Transactions. This installment will briefly discuss each step with further detail to follow in subsequent installments of this newsletter series.

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Asset Transactions vary in size and complexity, but typically follow the above process and timeline. Unfortunately, even the best prospects can become a disorganized headache for all involved when stakeholders are not aligned at the outset of a deal. Knowing what to expect and when can save your company time and money and increase the likelihood of bringing your acquisition or divestiture to a successful close. If you have any questions regarding this newsletter or would like advice on the acquisition or divestiture of assets, do not hesitate to reach out to us at (832) 831-2289 or RR&A’s transaction team is ready to help with any aspect of your Asset Transactions.  

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