Rights of First Refusal in Oil and Gas Transactions: A Progressive Analysis
AbstractThis article begins the analysis of rights of first refusal ("ROFR") by providing an historical of how they have been treated and interpreted by the courts. The analysis continues with an examination of the methods of identifying ROFRs, such as an offer to purchase or a bona fide intention by a party to dispose of its working interest. The authors provide a discussion of the ROFR Notice, discuss package sales and unmatchable consideration, and provide remedies available to a ROFR holder. Throughout the analysis, the authors underscore the importance of drafting proper ROFR clauses at the outset to avoid reasonably foreseeable problems arising later. The authors conclude by drawing implications for the owners of oil and gas properties subject to based on the foregoing analysis and provide commentary on the application of ROFRs.
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