A thorough understanding of the role of refineries in the oil and gas industry is important in establishing a credible value for a business operating in the refining space. In addition, it is critical to understand the subject company’s position in the market, its operations, and its financial condition. In this post, we walk through industry factors, three valuation approaches, and the importance of synthesizing these factors in order glean a holistic understanding of a company’s value.
In this post, we discuss the 2018 outlook for the refining industry, including the effect of taxes, industry regulation, and oil prices.
This is the second of multiple posts discussing the most important information contained in a reserve report, the assumptions used to create it, and what factors should be changed to arrive at Fair Value or Fair Market Value.
In this post, we discuss two of the most important inputs that go into every reserve report: production and pricing and why it may be appropriate to make adjustments to these inputs for purposes of Fair Value or Fair Market Value.
Don Erickson, Managing Director of Mercer Capital, educates the public on valuation methodologies and trends impacting various industries. One such industry is Oil & Gas. In the second part of this two-part slide deck, he discusses the basics of how to value oil & gas reserves.
Don Erickson, Managing Director of Mercer Capital, educates the public on valuation methodologies and trends impacting various industries. One such industry is Oil & Gas. In this slide deck, he discusses the main drivers impacting the oil and gas pricing environment over the previous decade and the implications to valuing reserves.
Mercer Capital again attended the NAPE Expo in Houston this past week. People, information, and ideas abounded with over 11,000 participants and 800 exhibitors. We summarize a few highlights from the conference in this post.
Lately, talk of the domestic oil and gas market has been especially positive. But the oilfield services industry is still struggling to recover from the collapse of oil prices in mid-2014 and the subsequent reduction in capital spending by upstream companies. We look at how the downturn in crude prices in 2014 still affects the oilfield service industry and consider the impact on company valuations.
A reserve report is a fascinating disclosure of information. This is, in part, because the disclosures reveal the strategies and financial confidence an E&P company believes about itself in the near future. Strategies include capital budgeting decisions, future investment decisions, and cash flow expectations. This is the first of multiple posts discussing the most important information contained in a reserve report, the assumptions used to create it, and what factors should be changed to arrive at Fair Value or Fair Market Value.
This week we look back at transaction activity and trends in the Marcellus & Utica plays in 2017. When we reflect about what happened, for whatever reason, images resembling something out of an episode of Desperate Housewives come to mind whereby the prying eyes of the marketplace peer out of their windows, surveilling old competitors that pack up and leave whilst new, and sometimes mysterious, neighbors move in. Read more about it here.
The economics of oil and gas production vary by region. The cost of producing oil and gas depends on the geological makeup of the reserve, depth of reserve, and cost to transport the raw crude to market. This post focuses on the economics in the Marcellus and Utica plays.
“Steady as she goes.” At least that is what I think all captains of most vessels say…except maybe a car. For captains navigating the 2018 oil and gas industry, a repeat of 2017’s relatively calm waters is vocal wish. In this post, we review the past year for insight into what the new year may hold.
Transaction activity in the Bakken shale was both busy and revealing in the second half of 2017. Many of these deals marked the departure of a number of companies that were known to be active in the play, particularly Halcon Resources. Other companies, however, have remained. This post digs deeper into this.
In this post we address why the shift in oil futures from contango pricing to backwardation is a bearish sign for those in crude oil storage.
As business valuation experts, we have to consider the outlook for the economy, industry, and business in every valuation; therefore, we pay attention to the oil and gas regulatory environment to assess what it means for our clients. Given the new administration, there is much to consider.
This blog post summarizes our whitepaper that provides an informative overview regarding the valuation of mineral royalty interests within the oil and gas industry. While there are a myriad of factors (mostly out of a royalty holder’s control) impacting the economics of a royalty interest, this blog post focuses on valuation methodology.
Royalty underpayment cases are anticipated to remain steady in the current pricing environment. There is an understandable tension between mineral owners’ concern over shrinking payments and operators’ concern over profitability and favorable drilling economics.
Taryn Burgess recently attended the National Association of Royalty Owners (NARO) Appalachia Chapter Annual Conference in White Sulfur Springs, West Virginia. Over the two day conference, speakers addressed many topics including certain aspects of lease agreements, current legislation affecting mineral owners, clean water solutions, clean energy programs, legal issues affecting mineral owners, midstream and storage development, and more. Here is an overview of five key takeaways from the conference.
Why did Mesa Royalty Trust outperform all other royalty trusts over the previous two years and what is the nature of its economic rights and restrictions?
When comparing a royalty interest to an ORRI, it is critical to understand the subtle nuances of the rights and restrictions between the two. Owners of royalty interests utilizing Permian Basin Royalty Trust as a valuation gauge should adjust for such differences as well as other differences between publicly traded and non-marketable securities.
In this blog post, we outline prevalent general themes in the downstream oil market that have given refiners hope for 2018 as well as those that cause skepticism about the future.
Depending on which side of an oil and gas negotiation one is on, Held By Production (HBP) provisions can be a favorable, or unfavorable, value contributor. We discuss the concept and provide helpful information for mineral owners to consider.
We recently published a white paper explaining how to value an E&P company. The purpose of the paper is to provide an informative overview regarding the valuation of exploration and production (E&P) companies operating in the oil and gas industry.
From the first Board Meeting to the last session of the conference, post-production deductions were discussed in great detail at the NARO National Convention. Why were these deductions brought up time and time again? Because post-production deductions affect the value of a mineral owner’s interest yet the regulations surrounding them is somewhat unclear and exists mainly on a contractual basis.
In this post, we consider both the human and industry impact of Hurricane Harvey.
