Due Diligence

Whether an operated or non-operated property, understanding the unique language or provisions in a purchase and sale agreement, operating agreement, or accounting procedure is critical to being able to properly implement the agreements and understand what costs can and cannot be charged.

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How are outstanding audit claims to be resolved and which party receives credits?
Which party has joint interest billing and revenue audit rights for the pre-effective date period?
Is the PSA language clear enough as to the cut-off dates for costs and revenues?
Are vendors aware of company policies and procedures or are conflicts of interest present?
There will likely be transitional accounting performed; is the PSA language clear enough as to the specific dates and time periods each party pays costs and is entitled to revenues?
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Matt Pilkington