Speaking Energy

One of the typical activities for junior associates in performing due diligence for M&A and securities transactions involving public companies is going through the “exhibit list” filed by the public company on its recent registration statements and Securities Exchange Act of 1934 (the Exchange Act) filings and tracking down the material agreements listed. Today, that process usually entails reading that list and then scrolling through the public company’s EDGAR filings, trying to find the actual filing to which each such material agreement is attached. This process, often also performed by young associates in the investment banking and other investment fields, can be labor-intensive and not particularly intellectually challenging. Recently, however, the Securities and Exchange Commission (SEC) promulgated rules that will make this process much easier and faster for those hard-working young professionals.

On March 1, 2017, the SEC adopted amendments to various rules, including Item 601 of Regulation S-K, that will require most registrants to include a hyperlink to each exhibit listed in the exhibit index of these filings. To enable the inclusion of such hyperlinks, the amendments also require that registrants submit all such filings in HTML format.

Globe Law & Business, in its new book Oil and Gas Sale and Purchase Agreements, has included several chapters written by Akin Gump lawyers. The chapters and their corresponding authors are as follows:

• “Conditions precedent and deferred completions,” by oil and gas partner John LaMaster
• “Oil and gas warranties,” by oil and gas counsel Caroline-Lucy Moran
• “Environmental provisions in upstream acquisitions and divestitures,” by environment and natural resources partner emeritus Paul Gutermann
• “Decommissioning,” by oil and gas counsel Nicholas Antonas and partner Marc Hammerson
• “Anti-corruption provisions,” by international trade counsel Nicole D’Avanzo and partner Tatman Savio
• Oil and gas boilerplate provisions,” by John LaMaster

Traditional rights plans are adopted to protect companies against hostile takeover actions. However, in the current distressed environment, where energy stock prices have plunged and many companies have incurred significant operating losses, management should carefully consider a rights plan to protect NOL carryforwards against an “ownership change.” This should be of particular concern in the current environment, where steep declines in the equity markets have made it easier for investors to acquire significant percentages of a company’s publicly traded stock.