Category

Energy Valuation Insights

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June 20, 2025 Current Events Special Topics

Capital Shifts and LNG Lifts

Takeaways from the 2025 Hart Energy Capital Conference

The energy industry is at a critical point, where producers must not only meet the ever-growing global energy demand resulting from population growth, industrialization, and the increasing electrification of uses, but also adapt to ever-changing environmental regulations and shifting societal expectations related to sustainable practices.

On June 4, 2025, Hart Energy hosted its annual Energy Capital Conference, which brought together capital providers and industry executives for an update on the funding that drives the oil and gas segment of the energy industry. In this week’s post, we recap how the conference reflected this crossroads in the industry and summarize key topics, including capital allocation and the outlook for M&A and LNG.

June 13, 2025 Mineral and Royalty Rights

Mineral Aggregator Valuation Multiples Study Released

With Market Data as of June 11, 2025

Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.

June 6, 2025 Current Events Valuation Issues

Upstream Natural Gas Valuations: A Big Year

Amid the uncertainty in oil markets, for the past year or so, optimism and valuation metrics for natural gas producers have steadily been rising. According to data from Mercer Capital’s quarterly Value Focus: Exploration and Production, reports whereas a year ago show cash flow multiples (or sometimes referred to as EBITDAX in the oil and gas industry) for both oil and gas producers tended to centralize around four (4) to five (5) times, lately, publicly traded gas producers have EBITDAX multiples in the low- to mid-teens, while predominately oil producing companies’ multiples have dropped.

This has been a dramatic change in the past year compared to the industry’s history. While onshore producers of oil and gas have many similar operational and economic traits, such as the shrinking inventory of top tier wells, this decoupling is representative of a fundamentally different outlook for the future of each commodity.

May 30, 2025 Special Topics Valuation Issues

Should You Choose an Industry or Valuation Expert?

Choosing an industry expert to value your oil & gas company has several distinct benefits that stem from a deep understanding of the sector’s unique dynamics, trends, and complexities. Selecting a valuation expert to assess your oil & gas company brings a distinct set of advantages rooted in their specialized training, adherence to recognized standards, and a focused approach to valuation. So, which should you choose?

In this post, we make the case for both and provide a solution to this question.

May 16, 2025 Valuation Issues

Oilfield Services Companies and How To Value Them

Following our post last week in which we covered the latest changes and trends facing oilfield services (OFS) companies, this week we focus on how to value these companies. Understanding the value of an oilfield services (OFS) company is by its very nature a complex matter. Having a firm grasp on the many similarities and distinctions between these businesses is crucial for performing valuations. In our whitepaper, Understanding Oilfield Services Companies & How to Value Them, we provide invaluable guidance in regard to these aspects of the OFS industry.

May 9, 2025 Current Events Special Topics

Oilfield Services Update for 2025

In our Energy Valuation Insights from recent weeks, we addressed the challenges facing U.S. O&G drillers and covered the uncertainty in the overall O&G sector due to shifting world trade patterns. This week, we look at some of the same themes and how they are affecting in the Oilfield Services (OFS) industry. In particular, we cover changes related to the recent recovery in activity level, the influences of technological advances, the push for energy independence, and expectations going forward.

May 2, 2025 Eagle Ford Shale Mergers, Acquisitions, & Divestitures

Just Released: Q1 2025 Oil & Gas Industry Newsletter

Regional Focus: Eagle Ford

The Q1 2025 issue of Mercer Capital’s Exploration and Production Newsletter focuses on the Eagle Ford. Despite a notable rig count decline, Eagle Ford production generally remained about flat over the twelve months ended March 2025. Modestly declining commodity prices combined with the formation’s falling rig count pushed the region’s benchmark groups’ stock prices into single-digit declines over the review period. Although M&A activity in the Eagle Ford remained minimal, with only two material transactions over the last twelve months, the Eagle Ford remains the most fragmented of the major unconventional plays and provides substantial opportunities to build via acquisition.

April 25, 2025 Current Events Special Topics

Uncertainty Rules the Day

Oil Markets Bewildered as World Trade Patterns Shift

Oil markets and energy companies are wrestling with understanding changes in domestic and international energy markets. As company outlooks become cloudier, uncertainty is on the rise. This has been developing for several weeks now, with some early indications showing that executives and investors don’t quite know how to respond yet. It appears it is going to take time for oil companies to figure out what to do next.

April 18, 2025 Eagle Ford Shale

Eagle Ford Production Edges Downward Again on Reduced Drilling

The economics of oil & gas production vary by region.  Mercer Capital focuses on trends in several plays including the Eagle Ford, Permian, Haynesville, and Marcellus and Utica.  In this week’s post, we take a closer look at the production and activity, commodity prices, and financial performance of the Eagle Ford.

April 11, 2025 Eagle Ford Shale Mergers, Acquisitions, & Divestitures

Where Have All the Eagle Ford Deals Gone?

Over the past 12 months, deal activity in the Eagle Ford remained stagnant, with only two pure Eagle Ford Shale deals closing compared to two transactions closed in the prior 12-month period. The slowdown in M&A activity in the Eagle Ford over the past two years might be ahead of a global slowdown in upstream M&A activity. According to Rystad Energy, global M&A activity this year is expected to fall short of the highs seen over the past two years, as the major wave of consolidation in the U.S. shale sector has largely run its course. In this week’s post, we review the latest transactions in the Eagle Ford and what this may mean for M&A in the industry in 2025.

April 4, 2025 Current Events Domestic Production

Challenges for U.S. Drilling Amid Tariff Uncertainties

As in most other industries, President Trump’s tariff policy has created uncertainties for oil and gas businesses, where there is reduced confidence in the stability of commodity prices and the economics for drilling. On April 2nd, Trump announced a 10% across-the-board tariff and additional tariffs on China, the European Union, and Japan. Although energy commodities are exempted from these tariffs, U.S. hydrocarbons are still subject to risks from likely retaliatory tariffs and a slowdown in global economic growth. Ultimately, drilling and capital spending decisions are more challenging and complex for U.S. producers, which can be expected to keep their drilling spending restrained and production growth muted in the near term. 

March 28, 2025 Mineral and Royalty Rights Special Topics

Key Components in a Typical Oil & Gas Lease

When negotiating and drafting oil and gas leases, understanding the basic framework that governs these agreements is essential. These leases are created so that the property owner can maintain their mineral rights while simultaneously leasing their land to the oil & gas company. In this week’s post, we explore some key components of an oil and gas lease and how these contracts are constructed.

March 21, 2025 Current Events Domestic Production

U.S. LNG in 2025

The Future is Bright, Though with Potential Headwinds

Expectations for the LNG industry in 2025 were modestly positive before the November 2024 U.S. elections but are notably more robust with the transition from the decidedly pro-green/renewable, anti-carbon energy Biden administration to the decidedly pro-American energy dominance Trump administration. However, as always true of domestic commodity markets subject to international market influences, the outlook for the U.S. LNG industry in 2025 is tempered by a number of potential domestic, international, and geopolitical pressures that could hamper actual results relative to expectations. We take a look at the future of U.S. LNG in this week’s post.

March 14, 2025 Mineral and Royalty Rights

Mineral Aggregator Valuation Multiples Study Released

With Market Data as of March 12, 2025

Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.

March 7, 2025 Mineral and Royalty Rights

How to Understand Your Mineral Interests

We frequently receive calls from mineral interest owners who know little about what they own other than the operator’s name on the check and the amount they receive each month. Besides just the amount paid by the operator, royalty checks provide valuable information to mineral owners that can help determine the value of their minerals. While some mineral owners may be very well attuned to decline curves and local pricing dynamics, others may only casually monitor the price of oil and gas to get a general sense of the trend in the industry. This week’s post serves as a guide to mineral and royalty owners seeking to learn more about what they own.

February 28, 2025 Current Events Domestic Production

Themes from Q4 Earnings Calls

Upstream (E&P) and Oilfield Service (“OFS”) Companies

This week, we explore the Q4 2025 earnings calls of Upstream and OFS companies, noting a focus on optimizing existing assets vs. M&A, capital allocation, and how companies are reacting to tightening supply. We examine some notable quotes from recent earnings call transcripts to gain insights into how industry leaders are navigating current challenges and positioning themselves for the future in an evolving energy landscape.

February 21, 2025 Mergers, Acquisitions, & Divestitures Valuation Issues

Asset Retirement Obligations in Oil & Gas

Their Impact on Valuation & Transactions

Properly accounting for AROs as part of due diligence in an oil and gas transaction is essential for ensuring a fair and accurate valuation of the assets being bought or sold. These obligations represent significant future liabilities, and failing to account for them properly can lead to financial misstatements, regulatory issues, and unexpected costs for the acquiring party. In this week’s post, we discuss AROs in the oil and gas industry and why they matter in transactions.

February 14, 2025 Current Events Special Topics

The Oil & Gas Industry is Pumped Up

NAPE 2025 Recap

Mercer Capital attended the NAPE (North American Prospect Expo) summit on February 5th and 6th, 2025, in Houston, Texas. More than 12,000 primarily upstream oil and gas industry professionals from a wide cross-section of disciplines attended the conference to discuss business opportunities, explore investments, and sharpen their knowledge base. In this week’s post, we focus on four primary themes that emerged from our attendance at various panel discussions featuring operational and financial industry participants as well as policymakers from Washington, D.C. 

February 7, 2025 Current Events Domestic Production Special Topics

The Uinta Basin Resurgence

The Uinta Basin is a geological formation located in northeastern Utah that extends into Western Colorado on its easternmost front where it is bound by the Piceance Basin. The Uinta Basin is rich in oil and gas reserves and is a stacked formation with pay zones ranging from around 1,300′ to 18,000′ in depth. Major oil discoveries led to the basin’s first significant development in the 1940s. With the rise of hydraulic fracturing (fracking) and horizontal drilling, the basin’s relevance has resurged, making it a hotspot for tight oil development and a significant contributor to U.S. oil and gas production. We explore the Uinta Basin’s resurgence in this week’s post.

January 31, 2025 Current Events Domestic Production Valuation Issues

The Latest in Natural Gas Valuations

Continued Optimism for Global Demand Buoys Multiples

Natural gas markets continue an optimistic trend towards greater demand to meet a U.S. supply glut. The incoming Trump Administration has promised to pull back regulatory restraints and unleash the industry to “drill baby drill.” However, when it comes to natural gas, there is already plenty of supply; the question is, can that supply become more portable to meet global (instead of regional) demands? We explore this question and a potential answer in this week’s post.

January 24, 2025 Domestic Production Mergers, Acquisitions, & Divestitures

Just Released: Q4 2024 Oil & Gas Industry Newsletter

Regional Focus: Bakken, DJ Basin, Woodford Shale, Uinta, and the SCOOP/STACK

As a supplement to our usual regional coverage, this quarter we take a closer look at the Bakken, DJ Basin, and Woodford Shale. On an oil equivalent basis, the DJ Basin ended the review period 2% below production levels from a year earlier, while the Bakken ended at nearly 5% lower. Only the Woodford Shale ended the review period at a level above its November 2023 production, though at a negligible 0.1% higher. While not nearly in the same league as the powerhouse Permian Basin, the Bakken Shale, DJ, and Woodford Shale play an important role in U.S. energy production.

January 17, 2025 Current Events Domestic Production

2025 U.S. Oil Outlook

Don’t Count On A "Drill Baby Drill" Mentality

The November election brought optimism to many oil producers who felt hamstrung by the Biden Administration’s policies. However, administrations can only do so much when it comes to global supply and demand dynamics. In fact, they can usually do little in the big picture; and the big picture is that there is probably going to be more supply coming online in 2025 than demand to meet it. Therefore, U.S. upstream producers are not planning on blowing their budget on aggressive drilling plans, no matter what Trump says, especially considering the lukewarm pricing environment that the market foresees. In addition, the U.S.’ shale dominance may be headed towards inevitable decline. We consider the 2025 U.S. oil and gas outlook in this week’s post.

January 10, 2025 Bakken Shale Domestic Production Special Topics

Examining Bakken, DJ Basin, and Woodford Shale Production and Activity

While not nearly in the same league as the powerhouse Permian Basin, the Bakken Shale, DJ, and Woodford Shale play an important role in U.S. energy production. While these basins mostly experience the same impacts that U.S. energy policy and geopolitical matters have on the primary U.S. basins, they each have unique characteristics that differentiate them from the larger basins and each other. In this post, we depart from our regular coverage and take a closer look at the Bakken, DJ Basin, and Woodford Shale.

January 3, 2025 Domestic Production Energy Valuation Insights Mergers, Acquisitions, & Divestitures Special Topics

Shining Some Light on Four Overshadowed Oil and Gas Plays

Uinta Basin, Bakken Shale, DJ Basin, and SCOOP/STACK

This week, the Mercer Capital Oil and Gas team highlights four popular, but less talked about oil and gas plays: the Uinta Basin, Bakken Shale, DJ Basin, and SCOOP/STACK. From the Uinta’s unique transportation challenges to the Bakken’s enduring output, the DJ’s infrastructure, and the SCOOP/STACK’s operational complexities, we explore their economic profiles and recent M&A activity.