Capital Gains: Licences for exploration and exploitation - Changes in licences
A company that is party to a licence may wish to sell an interest to another. The reasons for change can be many and varied.
The transactions are effected either through the disposal of licence interests and related assets or shares in a company owning those interests/assets depending on a number of factors including both commercial and legal (including tax). Companies seeking to balance their portfolios may agree to swap licence interests although such deals are difficult to arrange. There can be a number of incentives for swaps. One party may for instance wish to prevent existing participators from exercising pre-emption rights.