Change of Control in an Oil and Gas License Regime

Change of control is defined as the legal provisions that come from a consensus that give ownership rights of the legal property, business, or firm to a new party from the previous owner. Change of control occurs from various actions, such as majority stock transactions, asset transactions, and selling transactions[1]. In this scenario, a change of control provisions is also triggered in oil and gas licensing regimes. Based on legal and practical research, legal frameworks are considered to determine the change of control for the oil and gas licensing regime. 

Oil and gas licensing regimes identify the rights of a licensee to operate under the legal oil and gas industrial jurisdiction. Hence, practical and legal considerations are identified to determine the change of control provisions. For example, a change of control ensures that the license rights of oil and gas termination occur if the licensee fails to consider and follow the development agreement of oil and gas products according to the contract provisions[2]. However, termination only occurs after written notice. Furthermore, change of control provisions for oil and gas licensing regimes hold the licensee accountable for following the prescribed development plan if the license’s rights should be maintained[3]. Also, practical considerations identify the need for a change of control for beneficial contracts, such as the different connections with industrial stakeholders such as suppliers, consumers, and distributors[4]. Therefore, change of control provisions ensures the new licensee acquires rights to beneficial contracts. A key provision in the change of control agreement is the written notice and writings between stakeholders, especially the licenser, throughout the licensee’s development plan. Also, change of control provisions in the legal licensing regime is only triggered in share purchase acquisition transactions since asset purchase acquisition affords no ownership change[5]. Therefore, various provisions are offered in an oil and gas license regime between a licensee and a licenser. 

References

'Change Of Control Of Licensee Sample Clauses | Law Insider' (Law Insider, 2022) https://www.lawinsider.com/clause/change-of-control-of-licensee

'Change Of Control Provisions' (Fox Williams, 2016) https://www.foxwilliams.com/2016/01/05/change-of-control-provisions/

Kira, 'What Is Change Of Control And How Does It Operate?' (Kirasystems.com, 2015) https://kirasystems.com/learn/change-of-control/

'License Agreement' (U.S. SECURITIES AND EXCHANGE COMMISSION, 2022) https://www.sec.gov/Archives/edgar/data/1628738/000119312516419797/d892618dex1017.htm