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12 Commonly Overlooked, Underappreciated And/or Screwed up Transition Issues that Can Ruin Your Whole Day (Or Deal)

C. Barry Osborne, Linda Featherstone, Oil and Gas Agreements: Sales and Financings (2006)

In the acquisitions area, with more and more emphasis and value being placed on undeveloped reserves, now more than ever the ability to hit the ground running after an acquisition closes is critical. The ability to immediately deploy an active development program is often integral to the economic projections upon which the purchase price was based. Even if the production and reserves come in as anticipated, a delay of just a few months can drastically impair the economics of a deal, and the loss of acreage that may result from such unforeseen delays can be devastating.

The following is a list of twelve common problems that arise during transition. Many of these problems must be identified during the diligence phase, or even the evaluation phase of the acquisition to properly remedy; however, the one thing common to all of them is that the team responsible for transitioning and executing on the new assets often end up holding the bag. That being said, this is certainly not an exhaustive list. Every practitioner who has worked a deal, big or small, likely has his or her own list, along with a war story to go along with it.