Oil & Gas Agreements: Purchase and Sale Agreements

This Special Institute is the 11th in the Foundation’s highly successful Oil and Gas Agreements series. In the current volatile oil and gas market, companies are carefully evaluating their positions to determine whether they should sell assets to improve the company’s balance sheet or invest additional capital in higher-graded assets. Sellers and buyers need to be ready to “paper up” the transaction as quickly as possible. This institute will be invaluable to executives, in-house lawyers, outside counsel, accountants, landmen, engineers, geologists, environmental consultants, and others who are called upon to make these transactions happen. A broad range of issues associated with the buy-sell process—structuring the transaction, papering the transaction with the attendant diligence and adjustment issues, and managing post-closing issues such as transition services and transferred employees—will be addressed by a faculty highly experienced in the oil and gas acquisition and divestiture marketplace.

A practical focus will provide the less-experienced with valuable insights into key contract provisions and issues, while allowing experienced attendees to discover new ideas and refresh themselves on critical concepts. We hope you can join us in Santa Fe to continue the tradition of valuable educational and networking opportunities provided by the Oil and Gas Agreements series.

CLE Credit: Approximately 13 hours, including 1 hour of ethics.
CPE Credits: Up to 15 credits are available, including 1 ethics credit.


The Eldorado Hotel
309 W. San Francisco St.
Santa Fe, New Mexico 87501


Thursday Morning


  1. Stevia M. Walther

    Rocky Mountain Mineral Law Foundation, Westminster, CO
  2. Phillip R. Clark

    Bryan Cave LLP, Denver, CO

    Partner Davis Graham & Stubbs LLP, Denver, CO
  4. Steven P. Williams

    Attorney Castle Rock, CO

Introductions and Opening Remarks

  1. Jesse Bomer

    Edge Natural Resources LLC, Dallas, TX
  2. James E. Mutrie

    RSP Permian, Inc, Dallas, TX

Outlining the Buy- and Sell-Side Considerations of an Oil and Gas Acquisition

  • Why do sellers want to sell and buyers want to buy?
  • Overview of approaches from both sides
  • How do buyers and sellers maximize value in the transaction?
  • How do companies strategize timing of sales or purchases?
  1. Howard L. Boigon

    Vice Chair Colorado Oil & Gas Conservation Commission, Denver, CO; Boigon Law Ltd., Denver, CO
  2. Paul Hilton

    Hogan Lovells US LLP, Denver, CO

Structuring the Transaction: Equity vs. Asset Considerations

  • Fundamental considerations between choosing to purchase assets vs. purchase a company
  • Analysis of continuing liability and related due diligence considerations
  • Tax analysis of structure

Coffee Break

  1. John T. Bradford

    Of Counsel Liskow & Lewis, Houston, TX

Federal and State Tax Considerations for Oil and Gas Property Purchase and Sale Agreements

  • Distinguishing a property sale transaction from a leasing transaction
  • Allocations of the purchase price—uses of the allocated values (environmental defects, title defects, and preferential purchase rights in addition to tax), methods used to determine the allocated values and the strategies used in negotiating allocated values, and executing the IRS Form 8594
  • Tax consequences for the property sale transaction to seller and to buyer
  • Tax representations and warranties in the Purchase and Sale Agreement
  • Other standard tax provisions in the Purchase and Sale Agreement
  • Provisions in the Purchase and Sale Agreement for alternative tax efficient transactions such as like-kind exchanges, acreage trades, and “cash and carry” joint development agreements
  • Special problems in dealing with ad valorem tax apportionments
  1. Michael Lynn

    Lynn Tillotson Pinker & Cox, LLP, Dallas, TX

Letters of Intent – Stories from the Courthouse and Drafting Considerations: Part 1 – Stories from the Courthouse

  • Case study of the lessons learned from the 2014 case of Energy Transfer Partners, L.P. v. Enterprise Product Partners, L.P., which resulted in a $535 million jury verdict in favor of Energy Transfer Partners
  • Analysis of the letter of intent at issue and other key facts
  • Discussion of jury’s findings
  1. Lee Fanyo

    Director Lewis, Bess, Williams & Weese P.C., Denver, CO

Letters of Intent – Stories from the Courthouse and Drafting Considerations: Part 2 – Drafting Considerations

  • What to include in a letter of intent
  • Discussion of binding effect
  • Considerations of how the letter of intent can influence negotiations
  • Presentation of a form letter of intent and suggested revisions and alternative clauses

Lunch – On Your Own

Thursday Afternoon

  1. John M. Grand

    Vinson & Elkins LLP, Dallas, TX
  2. David W. Wicklund

    Vinson & Elkins LLP, New York, NY

Acquisition Financing and M&A Transactions – What You Need to Know as a Buyer and as a Seller

  • Financing process from start to finish
  • Equity and debt commitment letters
  • RBLs, second lien facilities, and high-yield bonds
  • Purchase agreement representations, warranties, and covenants
  • Conditionality and termination rights

    Partner Hinkle Shanor LLP, Roswell, NM
  2. Aaron K. Friess

    Attorney Stinson Leonard Street LLP, Bismarck, ND

Due Diligence Process

  • Due diligence checklist items
  • Public and private record review
  • Asset review (excluding environmental assessments)
  • Working with hired professionals
  • Preparing a due diligence report and defect notices
  • What are value priorities and how are they preserved?

Coffee Break

  1. Steven B. Richardson

    Bryan Cave LLP, Denver, CO

Title Defect Procedure

  • Defining the quality of title the buyer expects to receive
  • Structure of a typical title defect procedure
  • How to define “Permitted Encumbrances” and effect on special warranty
  • Special warranty considerations in assignments:  What survives?
  • Procedures for handling consents to assign and preferential rights to purchase
  • Pre- and post-closing cure rights and considerations of curing assets the seller no longer owns
  1. Larry W. Nettles

    Partner Vinson & Elkins LLP, Houston, TX

Environmental Due Diligence and Defect Procedure

  • Discussion of the environmental assessment process and an ASTM Phase I and ASTM Phase II
  • Conducting an environmental assessment when the seller is not an operator
  • Broad overview of liability under various environmental laws
  • Discussion of standard definitions including “Environmental Defect,” “Remediation,” and “Remediation Costs”
  • Structure of typical environmental defect procedure
  • Pre- and post-closing cure rights and considerations of curing assets the seller no longer owns
  1. David M. Patton

    Locke Lord LLP, Houston, TX

Covenants Between Signing and Closing and Closing Conditions

  • Covenants regarding the ongoing ownership and operation of the assets between signing and closing
  • Establishing remedies between the parties in the event of a breach and considerations of deposit, break fee, and specific performance
  • Discussion of standard and non-standard closing conditions
  • How to protect against—or advocate for—either party walking away from the deal
  • Governmental approvals including HSR and CFIUS
  • Post-closing conditions (e.g., BLM approval of assignments)
  • Consents to assignment, preemptive rights, and other conditions to the deal

Hosted Reception for Speakers, Registrants, and Guests

Friday Morning

  1. Jolisa Melton Dobbs

    Thompson & Knight LLP, Dallas, TX
  2. Debra J. Villarreal

    Partner Thompson & Knight LLP, Dallas, TX

Getting What You Paid For: Representations and Warranties

  • Standard asset-based representations and warranties
  • Non-standard representations and warranties
  • Interplay with closing conditions and the “bring down” and the MAE qualifier “closing game of chicken”
  • Availability and use of representation and warranty insurance
  • Tie-in with title defect process, environmental defect process, and covenants
  • Survival of representations and warranties
  1. Stephen C. Szalkowski

    Partner Latham & Watkins, Houston, TX
  2. Yvette K. Schultz

    Antero Resources Corporation, Denver, CO

Allocating Liabilities and Indemnities

  • Allocating the assumed and retained liabilities
  • Indemnity procedures and pitfalls
  • Issues to consider including anti-sandbagging, materiality scrape, thresholds, deductibles, and caps
  • Considerations of improving the quality of the indemnity including the buyer holding back a portion of the purchase price or the seller or buyer requiring a parent company guaranty

Coffee Break

  1. Michael De Voe Piazza

    Willkie Farr & Gallagher LLP, Houston, TX

Typical and Atypical Purchase Price Adjustments

  • Typical purchase price adjustments in asset transactions
  • Working capital adjustments in corporate transactions
  • Accounting settlement process and pitfalls both before and after closing as part of the final settlement process, and into the future
  • Purchase price adjustment mechanisms based on changing commodity prices
  • Protecting value through hedging
  1. Patrick J. Beaton

    Locke Lord LLP, Houston, TX

Buying or Selling a Midstream Asset

  • How to define the midstream asset
  • Special diligence considerations including reviewing long-term purchase and sale contracts, dedication agreements, and volume commitments
  • Unique representations and warranties
  • Valuation issues and interplay with defect procedures
  • Governmental approvals on state (e.g., PUC) and federal (e.g., FERC) levels

Lunch – On Your Own

Friday Afternoon


    Executive Director Rocky Mountain Mineral Law Foundation, Westminster, CO

Transition Services Agreements

  • Structure of a transition services agreement
  • Defining the provided services
  • How to appropriately allocate liabilities between the parties
  • Managing the transition process between the seller, buyer, and outside service providers
  1. Jonathan A. Marks

    Davis Graham & Stubbs LLP, Denver, CO

Employee Considerations

  • Specific representations and warranties regarding employees
  • Plan mechanics
  • Process of offers and severance
  • Benefits: 401(k), medical, dental, and others
  1. Nancy L. Cohen

    Miletich Cohen PC, Denver, CO

Ethical Considerations in Negotiating a Purchase and Sale Agreement

  • Negotiating with opposing counsel
  • Negotiating with parties not represented by counsel
  • Participating in upside in transaction through equity in selling or buying entity
  • Success fees as form of alternative compensation
  • Representing both buyer and seller
  • Fiduciary duty among parties to a transaction
  • Attorney-client privilege when third parties are on emails or phone calls

Course Adjournment

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