Transferring Oil & Gas Assets?
Environmental Assessments and Audits
In the transfer of oil and gas assets, purchasers should consider two steps regarding their environmental compliance and liability: environmental assessment prior to purchase and environmental audit after closing.
The purpose of an environmental assessment is two-fold. First, it gives the purchaser a solid understanding of what environmental liabilities are contained in a given asset. Second, it helps to determine a fair market value for the asset.
After the Purchase
Environmental due diligence work doesn't end when the deal closes. Environmental audit programs allow buyers to disclose environmental violations upon purchase, and in return, receive immunity from penalties or fines for a time period while the problems are resolved.
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