CHAPTER 20 DUE DILIGENCE DEBACLES AND DELIGHTS: PERSPECTIVES FROM THE INSIDE

• Jurisdiction: United States

Due Diligence in Mining and Oil & Gas Transactions
(Apr 2010)
CHAPTER 20
DUE DILIGENCE DEBACLES AND DELIGHTS: PERSPECTIVES FROM THE INSIDE
James M. Piccone
Resolute Energy Corporation
Denver, Colorado
Donald Wolf
Quantum Resources, LLC
Denver, Colorado

JAMES M. PICCONE is President, General Counsel, Director and one of the founders of Resolute Energy Corporation, a New York Stock Exchange traded U.S. oil and gas company. Mr. Piccone was Executive Vice President and Chief Legal Officer of Aspect Energy, LLC from 2002 to 2004. Before that, he was Vice President, General Counsel and Corporate Secretary of HS Resources, Inc., also a public New York Stock Exchange traded company. Prior to joining HS Resources, Mr. Piccone was a senior partner at the Denver, Colorado, law firm of Davis, Graham & Stubbs, where at different times he managed the Energy practice group, the Natural Resources Department and the firm's Transactions Department and where he served on the Management Committee. Mr. Piccone received his B.A., Economics, from the University of Colorado, Boulder in 1972 and his J.D. (Order of the Coif) from the University of Colorado School of Law in 1978. Mr. Piccone has been a speaker and writer on Energy law and finance matters. In 2002 he served as the Distinguished Natural Resources Practitioner in Residence and Adjunct Professor of Natural Resources Law at the University of Denver College of Law.

DONALD WOLF is Chairman of Quantum Resources, LLC; Vice Chairman and Director of the Board, Aspect Energy, LLC; and Board Member of Ute Energy, LLC.

Rocky Mountain Mineral Law Foundation

Special Institute on Due Diligence in Mining and Oil & Gas Transactions

April 29, 2010

James M. Piccone, President and General Counsel

Resolute Energy Corporation

Denver, Colorado

Due Diligence Debacles and Delights:

Perspectives from "the Inside"

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LAWYER V. PRINCIPAL

AVOIDING GAPS

FOCUSING THE DILIGENCE

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LAWYER'S APPROACH

▪ Title

▪ Environmental

▪ Reps and warranties

▪ Other corporate, legal issues

PRINCIPAL'S APPROACH

▪ Valuation data

▪ Technical analysis

▪ Technical risk assessment

▪ Economic analysis

▪ Rely on land and legal for ownership, environmental, certain other potential downside risks

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▪ Check assumptions that went into the valuation

▪ Ownership

▪ Production

▪ Decline

▪ Enhancement opportunities

▪ Drilling opportunities

▪ Price

▪ Costs

▪ Risks

WAR STORY 1 DAVIS OIL SALE TO HOME

▪ $630 Million

▪ Big Houston firm

▪ Exquisite purchase agreement

▪ Numerous local...