Are there any specific legal requirements when acquiring an oil and gas company?
Yes, there are specific legal requirements when acquiring an oil and gas company in Tennessee. The first requirement is a filing under the Tennessee Uniform Securities Act of 1981. This requires the company to submit a Statement of Intent to the Tennessee Department of Financial Institutions which provides the state with information about the buyer, the seller, and the terms of the transaction. Additionally, the parties involved in the acquisition must obtain board approval from the company’s directors and shareholders. This requires the parties to provide the board with disclosure documents that will allow them to make an informed decision. Additionally, the parties must adhere to public regulations when making their transaction. This includes filing with the state corporation commission for approval prior to the sale. Finally, for certain acquisitions, the parties may also be required to obtain approval from the Tennessee Oil and Gas Board. This approval is applicable when the company has more than five oil and gas leases or more than five wells. Obtaining this approval requires the company to provide the Board with an updated inventory of all their oil and gas properties that they would be acquiring. Thus, when acquiring an oil and gas company in Tennessee, the parties must take into consideration the legal requirements of filing with the state and obtaining board approval.
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