Preferential right of purchase issues in oil and gas property sales
- Oklahoma City office of Crowe & Dunlevy, Oklahoma City, OK (United States)
The business of buying and selling producing oil and gas properties has been active over the past decade. On frequently encountered difficulty is that many producing properties are subject to operating agreements containing `preferential right of purchase` PRP provisions, also referred to as rights of first refusal or preemptive rights. Under a PRP clause, a party wanting to sell its interest must first provide notice to other parties to the operating agreement and an opportunity to acquire the sellers rights and interests in the property. Determining if a PRP clause applies to a particular transaction and the extent of such application is not always easy. In addition if the PRP clause does apply and the holder elects to purchase the property, the deal for which the buyer and seller have bargained may be frustrated. Topics covered in this article include the following: scope of `sales` covered by the PRP clause; exclusion from preferential right; events triggering the PRP provision.
- OSTI ID:
- 285022
- Journal Information:
- Natural Resources and Environment, Journal Name: Natural Resources and Environment Journal Issue: 4 Vol. 10; ISSN 0882-3812; ISSN NRENEL
- Country of Publication:
- United States
- Language:
- English
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