Amidst the current uncertainty in the upstream world, the case of TXO Energy Partners LP’s recent IPO provides valuable insights into investor behavior. TXO’s focus on optimizing existing wells, maintaining a conservative balance sheet, and a commitment to regular cash distributions are attracting investors seeking stability amidst unpredictable market conditions. We explore TXO’s story and what this might mean for the future of the upstream sector.
Understanding the behind-the-scenes of mineral property valuation doesn’t need to be difficult. In this blog post, we explain the framework behind mineral property valuation, discussing key concepts and guidance from the Internal Revenue Service. Learn about the cost approach, market approach, and discounted cash flow analysis, as well as the essential factors in determining fair market value. Whether you’re a buyer, seller, or involved in litigation, ensure you’re up-to-date on the intricacies of mineral property valuation.
In this quarter’s newsletter, we focus on the Eagle Ford. Strong rig-count growth spurred an Eagle Ford production increase that was second only to the Permian. However, production improvement was offset by commodity price easing in the latter half of 2022 and early 2023, resulting in Eagle Ford comp group stock price declines over the last year. Despite those dynamics, interest in the Eagle Ford remains high.
In the mire of much of the chaotic goings on of the world energy markets and Ukraine over the past year, a lot of things have changed. Uncertainty has ruled the day. Commodity prices have now dropped significantly in the last six months. Yet, between the lines, there is optimism for the upstream industry as profitability and cash flows remain, and the possibility for acquisition premiums for target companies re-emerges in 2023.
Corporate finance does not need to be a mystery. In this updated whitepaper, we distill the fundamental principles of corporate finance into an accessible and non-technical primer.
The economics of oil & gas production vary by region. Mercer Capital focuses on trends in the Eagle Ford, Permian, Bakken, and Marcellus and Utica plays. This quarter we take a closer look at Eagle Ford.
Deal activity in the Eagle Ford has increased over the past 12 months, with 13 deals closed compared to 10 that closed in the prior year. What is fueling Eagle Ford’s M&A momentum? We discuss these factors in this week’s post.
Mercer Capital has its finger on the pulse of the minerals market. An important trend has been the rise of mineral aggregators, which have largely supplanted the trusts as the primary method of publicly traded minerals ownership.
This week we focus on the key takeaways from oilfield service operators’ Q4 2022 earnings call. Common themes include capital investment planning, supply and workforce constraints, and dipping commodity prices.
This week we focus on the key takeaways from the Upstream Q4 2022 earnings calls, which include buyback and distribution policies, organic growth opportunities, and an outlook for the rest of 2023.
Every February, NAPE’s Global Business Conference provides insights from multiple industry perspectives. This year it included discussions of energy policy around the globe, reviews for 2022, and outlooks on the 2023 merger and acquisition market.
In this 5-minute video, originally recorded for Mercer Capital’s Family Business On-Demand Resource Center, Bryce Erickson addresses the topic of oil and gas mineral/royalty rights. He explains what they are and what they aren’t, the basic framework and investment processes, and key drivers and risks associated with value.
Understanding the value of an oilfield services (OFS) company is by its very nature, a complex matter. The unpredictable cyclicality of the oilfield services industry requires careful consideration of many industry-wide and company-specific factors in developing a reasonable forecast of future operating results. In our blog this week we feature a whitepaper that provides invaluable guidance in regard to these aspects of the OFS industry.
As we have now put a bow on 2022 and have turned our attention to 2023, we suspect that the dreaded “R word” is on the mind of many of our readers as they contemplate the myriad challenges and obstacles their businesses will face in 2023. Now is the time to think critically about how your business is positioned for a potential economic slowdown. This post offers a few practical steps business owners, directors, and their advisors can take to ensure their business continues to thrive.
In this quarter’s newsletter, we focus on the Appalachian. Notable topics include Russia-Ukraine War’s effect on the demand for LNG exports to Europe in the face of winter, tight valuations between major operators, flat production levels in the region despite a high commodity price environment, as well as increased M&A activity in 2022 highlighted by Sitio Royalties and Brigham Minerals merger — creating the largest public minerals owner.
In this week’s post, we share a recent piece from our Family Business Director blog on the topic of Family Limited Partnerships. While the post speaks directly to family-owned businesses, the content is applicable to many because the individual estate tax exemption reverts to $6 million in 2026 from its current level of $12 million. As a result, many estates are beginning to plan now.
Three years ago, Bryce Erickson wrote an article about struggling Appalachian gas companies amid depressed valuations. They would still be struggling if that world had remained. It has not remained. A lot has changed since then, and the future looks very bright indeed.
The economics of Oil & Gas production vary by region. Mercer Capital focuses on trends in the Eagle Ford, Permian, Bakken, and Marcellus and Utica plays. 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. We can observe different costs in different regions depending on these factors. This quarter we take a closer look at the Marcellus and Utica shales.
M&A transaction activity in the Marcellus & Utica shales increased in 2022 relative to 2021, with large industry players motivated by free cash flow growth and creating shareholder value and less motivated by championing the ESG cause. In this week’s post, we examine the two largest transactions that occurred in but were not limited to the Marcellus and Utica shales in 2022.
In part 2 of this Q3 earnings calls series, we focus on key takeaways from Oilfield Service Companies such as the expanding role of international business segments, long-term sustainable growth, and E&P production growth plans.
This week, we focus on the key takeaways from the Q3 2022 Upstream earnings calls including the continued focus on share buybacks, moderate production growth, and how inflation is limiting that growth.
Mercer Capital has its finger on the pulse of the minerals market. An important trend has been the rise of mineral aggregators, which have largely supplanted the trusts as the primary method of publicly traded minerals ownership.
In this updated Study, Mercer Capital has thoughtfully analyzed the corporate and capital structures of the publicly traded mineral aggregators to derive meaningful indications of enterprise value. We have also calculated valuation multiples based on a variety of metrics, including distributions and reserves, as well as earnings and production on both a historical and forward-looking basis.
One of the key pieces of the Inflation Reduction Act was the “upsizing” of the 45Q tax credit from $50 to $85 per ton. This instantly bumps the value of carbon capture sequestration projects. However, there are still lots of issues and hurdles to overcome before getting off the ground.
In the past week, several energy-related gatherings have been held in the Dallas area. We attended two of them: the D-CEO Energy Awards and Hart Energy’s Energy Capital Conference. We had numerous discussions with company representatives, dealmakers, and service providers. The marketplace appears excited about the potential for the upcoming year amid challenges. At both events, several industry themes were evident including: the energy industry has strong fundamentals, capital markets are showing signs of a resurgence in needed capital, and energy security is returning to the lexicon.
