47
problems nor will it permit us to become sufficiently familiar with the assets to fully assess their deficiencies and potential recoverable
reserves. Inspections may not always be performed on every well, and environmental problems are not necessarily observable even
when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective
contractual protection against all or part of the problems. We may not be entitled to contractual indemnification for environmental,
safety, and health liabilities and could acquire assets on an “as is” basis. Significant acquisitions and other strategic transactions may
involve other risks, including:
•
diversion of our management’s attention to evaluating, negotiating and integrating significant acquisitions and strategic
transactions;
•
the challenge and cost of integrating acquired operations, information management and other technology systems and
business cultures with those of ours while carrying on our ongoing business;
•
difficulty associated with coordinating geographically separate organizations; and
•
the challenge of attracting and retaining personnel associated with acquired operations.
The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of our business.
Members of our senior management may be required to devote considerable amounts of time to this integration process, which will
decrease the time they will have to manage our business. If our senior management is not able to effectively manage the integration
process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer.
If we fail to realize the anticipated benefits of a significant acquisition, our results of operations may be adversely affected.
The success of a significant acquisition will depend, in part, on our ability to realize anticipated growth opportunities from
combining the acquired assets or operations with those of ours. Even if a combination is successful, it may not be possible to realize
the full benefits we may expect in estimated proved reserves, production volume, cost savings from operating synergies or other
benefits anticipated from an acquisition or realize these benefits within the expected time frame. Anticipated benefits of an acquisition
may be offset by operating losses relating to changes in commodity prices, increased interest expense associated with debt incurred or
assumed in connection with the transaction, adverse changes in oil and gas industry conditions, or by risks and uncertainties relating to
the exploration prospects of the combined assets or operations, or an increase in operating or other costs or other difficulties, including
the assumption of environmental, safety and health or other liabilities in connection with the acquisition. If we fail to realize the
benefits we anticipate from an acquisition, our results of operations may be adversely affected.
A cyber incident could result in information theft, data corruption, operational disruption, and/or financial loss.
The oil and gas industry has become increasingly dependent on digital technologies to conduct day-to-day operations including
certain exploration, development and production activities. For example, software programs are used to interpret seismic data, manage
drilling rigs, conduct reservoir modeling and reserves estimation, and to process and record financial and operating data.
We depend on digital technology, including information systems and related infrastructure as well as cloud application and
services, to process and record financial and operating data, communicate with our employees and business partners, analyze seismic
and drilling information, estimate quantities of oil and gas reserves and for many other activities related to our business. Our business
partners, including vendors, service providers, purchasers of our production, and financial institutions, are also dependent on digital
technology. The complexity of the technologies needed to explore for and develop oil and gas in increasingly difficult physical
environments, such as below-salt deepwater, and global competition for oil and gas resources make certain information more
attractive to thieves.
As dependence on digital technologies has increased, cyber incidents, including deliberate attacks or unintentional events, have
also increased. A cyber-attack could include gaining unauthorized access to digital systems for purposes of misappropriating assets or
sensitive information, corrupting data, or causing operational disruption, or result in denial-of-service on websites. For example, in
2012, a wave of network attacks impacted Saudi Arabia’s oil industry and breached financial institutions in the US. Certain countries,
including China, Russia and Iran, are believed to possess cyber warfare capabilities and are credited with attacks on American
companies and government agencies.
Our technologies, systems, networks, and those of our business partners may become the target of cyber-attacks or information
security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and
other information, or other disruption of our business operations. In addition, certain cyber incidents, such as surveillance, may remain
undetected for an extended period. A cyber incident involving our information systems and related infrastructure, or that of our
