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Upstream: Transactional Due Diligence: Transaction Advisory Merger Services

Two oil and gas operators, one public and one private, completed a merger in February 2019 to combine into a new publicly traded operating entity under a different name. The new company is focused on developing unconventional resources in the Marcellus/Utica shale plays.

Opportune was engaged to provide transactional services to ensure a smooth transition throughout the merger period. This included all pre-merger activities leading up to the signing of the definitive merger agreement, during the transition through the merger and providing ongoing support as the company hits stride. Opportune also provided detailed documentation and process logs of all merger activities for future review and auditing purposes. These post-merger support activities involved process design, back-office accounting system training and ongoing assistance with gas marketing/midstream functions, as well as upstream revenue, land and production support.

During the merger transitional period, offers were made to relocate employees to join the newly formed public entity. For the employees who remained with the company, Opportune provided training on new processes and software to get them up-to-speed. Opportune also provided back-fill support for roles left vacant by employees who didn’t relocate. The client also looked to the Opportune team to aid in completing historical midstream and revenue Prior Period Adjustments (PPAs). The PPA process was complicated because necessary source data was housed in pre-merger databases from the separate entities. The PPA effort was followed by a need for more substantial accounting support after the departure of some critical employees during post-merger and transition. Opportune supported the client by documenting procedures of these employees and training new personnel after their departures.

Opportune added value by engaging with the executives of the new public company to discuss and advise on post-merger go-forward decisions. By engaging resources across practice areas, Opportune was able to leverage best practices to achieve the strategic goal set forth during the merger planning phase, as well as provide future training for each department involved. Opportune’s midstream and upstream expertise allowed all departments involved to not only feel confident with their current business practices, but also be comfortable that Opportune would be able to support them in the event any new challenges arose.

As this project remains ongoing, new opportunities arise daily. We currently have, at any time, between four to five Opportune employees engaged in upstream and midstream advisory and Process & Technology technical efforts. By providing quality service, we have become trusted advisors to all facets of the newly formed public company. As the newly formed public company continues to grow, we have now become their first contact to deliver technical and transactional advisory solutions. To learn more about our breadth of transactional merger services and solutions, CLICK HERE.

Byrony Coan

DirectorOpportune LLP