A weekly update on issues important to the oil and gas industry
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.
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.
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.
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.
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.
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.
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.
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.
Year-end 2024 is quickly approaching so that means it’s time to take a look back at the year. Here are the top ten posts for the year measured by readership. Click on any of the post titles to revisit the post. Thank you to our readers for your constant support! It’s our honor to cover the oil & gas industry for you. We are taking the next two weeks off from the blog to celebrate the holidays but we’ll be back next year!
Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
