2. Contract Assignability

Contract Assignability

While not often on the minds of Buyers and Sellers at the time of executing a letter of intent, there are usually rights under several agreements relating to the Seller's use, maintenance and operation of the subject assets that the Buyer will want to acquire through the transaction. While these contracts are often included as part of the definition of "Assets" being transferred in the PSA, we specifically take note of these assets, as extra diligence is often required to ensure that the Buyer is able to "step into the shoes" of the Seller in these contracts at closing. In E&P transactions, gathering, processing, joint operating, pooling, participation agreements and other agreements setting forth "areas of mutual interest" for development will often need to be carefully reviewed by counsel to ensure the assignability of the Seller's interests under those agreements. In midstream transactions, gas purchase agreements, storage agreements, communication tower leases and other commercial agreements relating to the transportation and measurement of hydrocarbons in the pipeline will also need to be reviewed by counsel with an eye toward assignment and change of control provisions.

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