Title: Have Gas–Will Sell
Author: John Robinson
Publication: The Outcrop, March 2002, p. 3
I recently had the good fortune to participate in the reorganization and sale of my company. As you might expect, this is a classic good news, bad news story. The best part of the transaction was the opportunity to work with a team of professionals who were focused and motivated to grow the company and complete the sale. The unfortunate part was the ultimate dismantling of a very successful team.
Our team was composed of a traditional multidisciplinary group, including experts in geoscience, production/operations, reservoir engineering, land/lease records, legal, corporate planning/finance, environmental/regulatory, and accounting/tax. The process of the sale was sequential through our team — each specialty had a role and a turn in the progression. The following discussion is a simplified chronology of the team responsibilities for the sale.
The geoscience/land/engineering group was first to make contact and provided enough technical data to demonstrate sufficient value to continue the discussions. Maps, cross-sections, digital data, ownership interests were exchanged and reviewed. Reserves were verified and forecast. At some point, the drilling/production/operation costs were layered into the analysis. With a green light to proceed, a letter of intent bound the parties to proceed to a Purchase and Sale Agreement (PSA). Senior management, legal and corporate planning personnel were now charged with “knocking out” a PSA that was acceptable to both parties. Environmental due diligence was next on the list, to assure the assets were “clean” and free of further obligation. After closing (great rejoicing on both sides of the table), the accounting group sorted out the business of paying bills and transferring files. Of course, the transaction won’t be complete until tax returns are filed and inspected by the IRS. This was an outstanding team effort and each member of the team had an important part to contribute to the sale.
I’m a team guy, always have been. I enjoyed my association with this team and will miss the constructive interaction. We accomplished many goals in our short tenure. We had good days and bad days, but we always kept our eyes on the prize.