When sourcing deals for oil and gas transactions, working with a broker can offer several, sometimes non-intuitive, benefits. These intermediaries are crucial in connecting buyers and sellers in the industry. In the spirit of the upcoming holidays, here are twelve key advantages of using brokers to source oil and gas deals:
Good brokers have a deep understanding of the oil and gas sector, including market trends, valuations, and regulatory changes. This expertise can be invaluable in identifying opportunities and navigating the industry’s complexities.
Brokers often have extensive networks of industry contacts, including potential buyers and sellers, which can significantly broaden your deal-sourcing opportunities. Some argue that acquiring assets directly from the source can save you money because you don’t have to pay broker fees. However, you may be losing out on the value a broker’s extensive network that can secure better pricing with multiple potential buyers and sellers. Experienced brokers are constantly on the lookout for new opportunities for their clients. Connected and respected brokers are kept in the loop for these non-traditional, exclusive opportunities as they are trusted to bring the relevant and appropriate parties to the table.
Brokers provide valuable market insights, helping you stay updated on the latest developments, pricing trends, and competitive dynamics in the oil and gas market. Most well-educated brokers keep track of market tendencies and movements. They can match your specific needs and objectives with available opportunities, ensuring that the deals they present align closely with your strategic goals.
Sourcing deals can be a time-consuming process. Brokers streamline the search by presenting you with pre-screened opportunities, saving you the effort of identifying and evaluating potential transactions. Reputable brokers have the experience and expertise to determine the best fitting transactions for your business’ needs.
Brokers help maintain the confidentiality of your interest in a particular deal, protecting sensitive information until a transaction is finalized. This aspect of a brokered transaction can turn out to be an especially important one. If an attractive potential sale or purchase is identified, a level of confidentiality must be maintained to ensure competitors stay unaware or uninterested in the same transaction.
Experienced brokers can assist in the negotiation process, helping you secure the transaction’s best possible terms and conditions. Brokers can draw upon previous, like minded negotiations to craft transactions that are rewarding for your business. Having a broker who can navigate both benign and contentious negotiations is a vital asset to any transaction.
Brokers can guide you through the due diligence process, ensuring you can access all the necessary information and documentation to make an informed decision. It’s essential in the transaction process to have leads, sources, and opportunities that have been properly verified. An entity’s need for thorough due diligence in trade opportunities has never been higher, and a reputable broker can provide valuable assistance for this.
Brokers provide expert valuation services, helping you understand the fair market value of the assets you are interested in, which is crucial for making informed investment decisions.
Brokers assist in identifying and assessing potential risks associated with a deal, allowing you to make well informed decisions about whether to proceed. A worst case scenario in high stakes oil and gas transactions is failing to spot or plan for an issue that consequently ruins a deal. Diligent brokers comb through and help analyze all relevant material to give clients peace of mind regarding the risks involved in a transaction.
Experienced brokers are constantly on the lookout for new opportunities for their clients. Brokers have access to off market or exclusive opportunities that are not widely advertised, giving you a competitive advantage. Connected and respected brokers are kept in the loop for these non-traditional, exclusive opportunities as they are trusted to bring the relevant and appropriate parties to the table.
Partnering with brokers allows you to focus on your core business operations while they handle the deal sourcing process. In the oil and gas industry, where deals can be complex and high value, the services of a skilled and knowledgeable broker can be instrumental in finding and executing successful asset transactions. Whether you are buying or selling, leveraging the expertise of a broker can enhance your chances of a favorable outcome.
Brokers act as excellent liaisons with counsel to provide immediate coordination for legal issues that might arise during the due diligence process and negotiations. Particularly, brokers know where transactions typically end off course and can alert counsel to disclosed defects or marketed assumed liabilities that will be a source of particular negotiation in the transaction.
At RR&A, we have a long history of working alongside brokers to collaborate in oil and gas transactions and are willing to leverage our networks to provide you with the support you need in your next transaction. As the year draws to a close, please let us know if we can help coordinate that last-minute deal lingering on your to do list; contact us now.
Disclaimer: The information and material on this website is general information about our practice and firm. This information does not offer specific legal advice and the use of this information does not create an attorney-client relationship with RR&A or any of its attorneys. The information on this website should not be used for legal advice, and persons should not act upon the information on this website without engaging professional legal counsel.