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Midstream Oil & Gas Asset Acquisitions Toolkit
Practical Law Toolkit w-032-8361 (Approx. 12 pages)
Midstream Oil & Gas Asset Acquisitions Toolkit
by Practical Law Oil & Gas
| Maintained • USA (National/Federal) |
A selection of resources to assist counsel in an asset acquisition of a midstream oil & gas business.
In an asset acquisition, the buyer only acquires the assets and liabilities it identifies and agrees to acquire and assume, subject to any liabilities imposed on the buyer as a matter of law. The ability to pick and choose specific assets and liabilities provides the buyer with flexibility. However, this also makes asset acquisitions more involved because asset acquisitions generally require more formalities and documents than equity acquisitions and mergers because it requires a transfer of each asset and liability from the seller.
The nature of midstream oil & gas assets further serves to make an asset acquisition of a midstream business complex because a midstream business:
- May have critical long-term commercial agreements that require a third-party's consent to assign the contract (such as gathering or processing agreements).
- Often has multiple real property assets that must be transferred. The real property assets may consist of owned real property, leased real property, easements, or a combination of these.
- May have various permits needed to operate the business, some of which may not be transferable.
In a typical midstream oil & gas asset acquisition:
- The seller needs to deliver bills of sale for the transfer of tangible assets.
- The seller and the buyer need to deliver assignment and assumption agreements for the transfer of contracts.
- The seller may need to execute and deliver deeds for the transfer of owned real property. The seller and buyer may also need to execute and deliver assignment and assumption agreements for the transfer of leased real property and easements. These documents, or a memorandum of the agreements, usually need to be recorded in the local property records.
- The seller and buyer may need to prepare and file special documentation and obtain governmental approvals to transfer certain permits. If some permits are non-transferable, the buyer may need to apply for new permits.
- The seller may need to deliver third-party consents for contracts that contain anti-assignment clauses.
This Toolkit contains continuously maintained resources to help counsel manage the transaction from preliminary planning through the negotiation of the asset purchase agreement and closing of the transaction. While many of these resources do not specifically address midstream acquisitions or issues, they are intended to be generally useful and relevant.