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Due Diligence and Closing Issues

Kendor P. Jones, Oil and Gas Acquisitions (1995)

This paper will cover the period commencing with the signing of the Purchase Agreement and ending with Closing, the traditional “due diligence” period. The due diligence process actually begins when the Buyer's representatives first enter the data room or receive the sales material and doesn't end until the post-Closing survival periods expire. However, the same disciplines apply throughout and I have assumed that the pre-signing and post-Closing review will be as diligent and thorough for their respective purposes as that conducted during the period discussed. The paper will not cover two key due diligence areas, environmental and third party dealings, since these will be addressed by others. Also, certain important areas, most notably those dealing with title and corporate and securities matters involved in stock deals, will not receive the analysis they deserve because of restrictions on the length of this paper. However, several of the papers cited in the bibliography deal with these areas in greater depth and hopefully they will serve the needs of those who seek greater guidance. Finally, the usual disclaimer in papers dealing with due diligence — this paper is not intended to be a scholarly treatise since there is very little case law dealing with due diligence and the few cases reported are fact specific; rather it is intended to be a practical guide, a “nuts and bolts”