We continue our interview series with Justin T. Stolte, partner at Gibson, Dunn & Crutcher LLP. Part three picks up by looking at how deals are getting done.
Stolte looks at how deals are getting done through novel deal structures or mechanisms such as valuation divides and contingent payments.
Stolte says contingent payments can be used across the industry. “On the upstream side we are typically seeing contingent payments tied to commodity prices. But on the midstream side or the downstream side, those contingent payments look more like earn-outs. They are really tied to the performance of the underlying business. If there is some set criteria where the business post closing is performing better than the parties anticipated there needs to be a means in a lot of deal makers eyes for the buyer to compensate seller.”
Related videos:
VIDEO SERIES: Challenges Ahead For M&A Transactions Market
Recommended Reading
East Libyan Forces Say They Have Full Control Of El Sharara Oil Field
There was no immediate confirmation or comment from state oil firm NOC which operates with foreign partners the 315,000 barrels-per-day (bbl/d) field deep in Libya’s southern desert.
Shell, Eni, Exxon Mobil Among Winners In Egypt’s Oil, Gas Exploration Tender
Egypt expects investments of at least $750 million to $800 million in the first stage of exploration in the 12 concessions, Petroleum Minister Tarek El Molla said during a press conference.
Total’s South Africa Discovery Could Hold 1 Billion Barrels Oil Equivalent
The Brulpadda well encountered 57 m of net gas condensate in Lower Cretaceous reservoirs. The well was extended to a final depth of 3,633 m and has also been successful.