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Benefits to Customers
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Alternative to outright sale |
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Liquidity in the form of cash
proceeds |
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Ability to reallocate capital from lower yielding
PDP to higher yielding E&P investments |
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Continued control of operations
(including COPAS overhead charges) |
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Participation in upside
through a back-in |
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Continued presence in a geographical area |
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Reliance of Limited Partner on customer for operating management
(Limited Partner consent required for major actions -
drilling, development, dispositions, etc.) |
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Financial Impact to Customer
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Infusion of cash |
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Sale of reserves to newly formed partnership…reserves
move from customer balance sheet to partnership balance sheet |
