By: Sam Stein, School of Energy Resources Student Ambassador
The Rocky Mountain Mineral Law Foundation hosted a due diligence conference this September in Colorado, where energy industry professionals, attorneys, Landmen and students were able to learn about the Due Diligence process pertaining to the oil and gas industry. Several students from the Professional Land Management program (including myself) and the College of Law at the University of Wyoming took the opportunity to attend this event and network with professionals in the field.
Being able to attend the Due Diligence conference was a great opportunity to learn about an aspect of the energy industry that we do not cover in our classes. It is one of the more specific processes that you really only get to learn the nuances of once you are a practicing professional in the industry. The first day of the conference was more dedicated to a broad legal overview of the due diligence process and its importance in the purchase and sale of assets. The second day of the conference was narrower in scope, and specifically focused on the various “check list” items that go into completing the process – this day was more relevant for students in the Professional Land Management program as it directly discussed the work that Landmen do and how it applies.
Basically the course of the two days was to introduce us to the due diligence process and understand how it works and what needs to get done. To put it simply, due diligence is when an asset (generally a land or mineral interest) is being sold and the buyer wants to verify the quality of the asset and that the seller actually owns everything they claim that they do. It is a Landman’s job to go in and check county records to verify this information as well as identify any issues or defects that may present problems during the transaction. Issues and defects are recorded and cleared up so that by the time final transaction occurs, it is a smooth as possible. Due diligence is a complex process that is usually set within 60 day time periods, so the work days are long but the end results are as beneficial as possible. Teams of Landmen work together to complete the due diligence process and ensure that the right assets are being sold and are of good quality.
There were various portions of the conference that stood out to me and were very interesting to listen to. My personal favorite was learning about how environmental impact statements and environmental assessments play into the due diligence process. While this is not specifically directed towards Landmen, understanding how the environment plays into the quality of the asset is essential to finalizing a transaction. Having information about the on-site discoveries may help in identifying issues that are not in recorded documents, and may help in finding solutions to any issues regarding the asset. While Landmen are not the people who go out and check for any environmental issues, this was the panel that I enjoyed the most because it is so different from what we learn in our classes and is extremely important in regards to due diligence.
Overall, the due diligence conference was a great opportunity to learn about a complex process in the energy industry that we do not get to cover in our classes. This was also beneficial for networking and getting in contact with industry professionals. I would recommend participating in any events like these that can help build your resume and your knowledge of the industry you are interested in.