Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
Q2 2025 earnings calls reflected an industry still guided by discipline but open to opportunity. OFS providers and E&P companies alike reiterated their focus on returning capital to shareholders and preserving balance sheet strength, while also pointing to selective international and offshore growth initiatives. The result is a sector cautious about near-term pricing and activity levels in North America, yet strategically positioning for selective long-term expansion. Read more in this week’s post.
The Dallas Fed Q2 Energy survey highlighted the growing uncertainty and continued pessimism in management sentiments across the sector. Given the concerns shared about the future of the oil and gas markets, it is more important than ever for a potential seller to be able to provide potential buyers with a clear picture of the company’s capacity for generating cash flows. In this week’s post, we highlight the value of a Quality of Earnings (QofE) analysis in the transaction process.
The Q2 2025 issue of Mercer Capital’s Exploration and Production Newsletter focuses on the Permian. The Permian basin continues to serve as the centerpiece of the U.S. shale revolution. However, the basin will face challenges in the near future as rising water and associated gas content are contributing to increased production costs, leading to more cautious drilling plans for basin operators.
Americans have been and continue to be hungry for energy, in any effective form they can get it, renewable or not. While a majority of Americans still prioritize renewables in energy policy, a shift is taking place, mostly among younger Republican and Republican-leaning individuals, according to a recent Pew Research Study. In this week’s post, we detail how this has been changing since the end of Trump’s first term in office and what the future may hold for renewable energy.
The economics of oil and gas production vary by region. Mercer Capital focuses on trends in the Permian, Eagle Ford, Haynesville, and Marcellus and Utica plays. The cost of producing oil and gas depends on the geological makeup of the reserve, the depth of the reserve, and the cost of transporting the raw crude to market. We can observe different costs in different regions depending on these factors. In this week’s post, we take a closer look at the Permian.
While large-scale upstream M&A has dominated industry headlines, the mineral and royalty space has quietly sustained deal momentum over the past year. From high-profile corporate mergers to strategic bolt-ons and capital recycling plays, activity in the Permian Basin remains robust. Publicly traded royalty platforms are leveraging both equity and debt to consolidate top-tier assets, signaling a maturing market where scale, structure, and selectivity are reshaping the investment landscape.
Oil and gas analysts use many different metrics to explain and compare the value of an oil and gas company, specifically an exploration and production (E&P) company. The most popular metrics (at least according to our eyeballs) include EV/Production, EV/Reserves, EV/Acreage, and EV/EBITDA(X). In this post, we will dive into the EV/Production metric, and explore its most popular uses.
On June 3, 2025, Viper Energy, a subsidiary of Diamondback Energy, Inc., announced its plan to acquire Sitio Royalties in an all-stock transaction valued at approximately $4.1 billion. The acquisition includes Sitio’s roughly 34,300 net royalty acres, 25,300 of which are concentrated in the Permian Basin. The Viper-Sitio merger represents a notable shift in strategy within a traditionally fragmented sector. It signals a move toward greater scale, operational leverage, and investor confidence in the royalty business model.
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.
Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Mercer Capital has its finger on the pulse of the minerals market. The most recent Mineral Aggregator Valuation Multiples Study is now available.
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.
