Oil & Gas Shareholder Agreement

The launch of a new business in the oil and gas sector will be driven in large part by the legal agreements that the parties enter into that will direct this new business venture, such that it is extremely important that these contractual arrangements need to be clearly defined and established. Such a contract needs to be appropriately negotiated and drafted such that each side is properly protected and capable of realize the most from this new business venture (while having the capacity to resolve problems and settle disputes).

What should be noted is that unanimous shareholder agreements need to be particularized to the circumstances, given the unique aspects of each contractual relationship. Particular aspects seen in such contracts have included:

"Drag-Along. If a voting majority of the Principal Shareholders (a “Group”), proposes an arms’ length bona fide Transfer of all of the Common Shares owned and held by each of them to a Third Party for cash and/or Free Trading Securities (and no other consideration or collateral benefit is paid, payable or promised to the Principal Shareholders or any member of the Group), then the Group or Principal Shareholders, as applicable (the “Dragging Shareholders”) will have the right to require all of the other Shareholders (the “Selling Shareholders”) to Transfer all of their Common Shares on the basis described in Section xxx; provided that, in the event that the consideration to be received by the Selling Shareholders for their Common Shares is (entirely or in part) in the form of Free Trading Securities and not cash, then the Group or Principal Shareholders, as applicable, will only be able to make use of the provisions of Section xxx if such Free Trading Securities are considered liquid for all Selling Shareholders and a liquid market exists for such Free Trading Securities, as determined by the Board."

"Death. Upon the death of a Shareholder or its principal (hereinafter in this Section called the “Deceased”), the personal representatives of the Deceased (hereinafter in this Section called the “Vendor”) shall sell all, but not less than all, of the Shares legally and/or beneficially owned or controlled by the Vendor, (hereinafter in this Section called the “Purchased Shares”) to the Corporation and the Corporation (in this Section called the “Purchaser”) shall purchase for cancellation from the Vendor the Purchased Shares, upon and subject to the terms and conditions hereinafter set forth."

"Election of Directors. All Shareholders will vote their Common Shares to elect the Directors in accordance with the nominees specified by Section xxx and the Corporation and the Shareholders will take all procedural or other steps at a Shareholder Meeting convened to elect directors to ensure the election of the nominees specified by Section xxx."

For more information on the legal services of Neufeld Legal P.C. with respect to launching your new business in the oil & gas sector or to schedule an appointment, contact our lead lawyer Christopher Neufeld at Christopher@OilGasLawyer.ca or 403-400-4092.

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Agreements pertaining to the launch of an oil and gas business start-up.

Unanimous Shareholder Agreement

Joint Venture Agreement

General Partnership Agreement

Pre-Incorporation Partnership Agreement

Joint Ownership and Management Agreement