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 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.
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.
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.
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.
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.
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.
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!
Buy-sell agreements don’t matter until they do. When written well and understood by all the parties, buy-sell agreements can minimize headaches when a company hits one of life’s inevitable potholes. But far too many are written poorly and/or misunderstood. Directors are always eager to discuss best practices for buy-sell agreements. In this week’s post, we talk to Chris Mercer, Mercer Capital’s founder and author of four books on buy-sell agreements, and ask, “Is there a ticking time bomb lurking in your business?”
This year, Mercer Capital had the privilege of attending the 2024 D CEO Energy Awards, an event that celebrates the energy sector and honors leadership and companies from across the value chain that impact the Dallas-Fort Worth metroplex. In addition to celebrating individual accomplishments, the event served as a valuable networking opportunity, connecting energy leaders, innovators, and key industry players. In this week’s post, we recap the event and key award winners in the energy industry for our readers.
Mercer Capital is pleased to announce the release of the 2024 Energy Purchase Price Allocation Study. This study researches and observes publicly available purchase price allocation data from companies primarily contained in one of the four sub-sectors of the energy industry: (i) exploration & production; (ii) oilfield services; (iii) midstream; and (iv) downstream. This study is unlike any other in terms of energy industry specificity and depth.
The study provides a detailed analysis and overview of valuation and accounting trends in these sub-sectors of the energy space. It also enables key users and preparers of financial statements to better understand the asset mix, valuation methods, and useful life trends in the energy space as they pertain to business combinations under ASC 805 and GAAP fair value standards under ASC 820. We utilized transactions that reported their purchase allocation data in calendar year 2023 and not reported in previous annual filings.
We are excited to share the release of Z. Christopher Mercer’s latest book, “Buy-Sell Agreements: Valuation Handbook for Attorneys” published by the American Bar Association. This week, we share an excerpt from the book and what you can expect to find in the full copy.
In the last year, M&A activity in the upstream area of the oil and gas industry has increasingly become top-heavy, characterized by several headline deals. While the broader North American E&P deal count has been shrinking since 2022, a handful of major acquisitions in the last year have led to a spike in upstream M&A spending. With fewer yet higher-dollar deals and producers eyeing to expand their portfolios of core acreage, the energy industry’s M&A market has greatly shifted in 2024.
The oilfield water industry (OFW, or midstream water) continues to grow in importance within the general upstream energy industry. So much so that while historically considered part of the Oilfield Services Industry (OFS), midstream water is now considered its own industry within the upstream space, separate from the more general OFS. In this week’s Energy Valuation Insights blog, we explore the current status, trends, and expectations for the future of midstream water.
The SCOOP/STACK is a significant oil and gas play found in the Anadarko Basin of Oklahoma. Historically, the Anadarko Basin has been a prolific area for oil and gas extraction. It spans approximately 70,000 square miles across Western Oklahoma, the Texas Panhandle, and parts of Southwestern Kansas and Southeastern Colorado. The basin’s geology features some of the thickest and highest-quality shale reservoirs in the United States, making it an attractive site for drilling and production. Given that fact pattern, it might surprise some to learn that activity in the SCOOP/STACK has been sluggish, to say the least, in recent times.
There are always going to be barriers to success in an industry. Barriers to entry, barriers to growth, barriers to profitability, and barriers to progress can lurk to name a few. The upstream industry has its share. For gas, its own oversupply and low prices are an issue. For oil, capital constraints are reining in investment. Both commodities also thirst for quality labor to fuel growth and longer-term underlying optimism, but that workforce does not exist right now and may take a while to develop. What does this mean for the future of the industry?
M&A deal flow was sidelined for much of 2022 and 2023, but pent-up M&A demand is expected to compel buyers and sellers to renew their efforts in 2024 and beyond. As deal activity recovers, sellers need to be prepared to present their value proposition in a compelling manner. This is when having an independent Quality of Earnings Report tailored to the seller’s needs becomes crucial. In this post, we review five reasons sellers benefit from a QofE report when responding to an acquisition offer or preparing to take their business models or assets to market.
As we’ve often highlighted on this blog, transaction activity in the O&G sector has waned in recent years. Rather than utilizing free cash flows to support expansions via acquisitions, companies have emphasized capital discipline, favoring dividend payouts and buybacks. With this thinning of the buyer market, its 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 that light, we thought our readers would appreciate a recent Mercer Capital slide deck on quality of earnings (QofE) analysis. The purpose of a QofE analysis is to translate historical reported (GAAP) earnings into a relevant picture of earnings and cash flow that is useful in developing credible forward-looking estimates. The stakes are high in the transaction arena. Whether embarking on a sale process or responding to an unsolicited inquiry, sellers have precious few opportunities to set the tone. A QofE process equips sellers with the confidence of understanding their own position while engaging the buy-side with awareness and transparency that promotes a more efficient negotiating process and the best opportunity for a favorable outcome. Read more in this week’s post.
The Railroad Commission of Texas is overhauling its primary rule for water protection, Statewide Rule 8, to address environmental standards and oil and gas industry practices that have evolved significantly since the rule’s last major revision in 1984. The proposed changes aim to streamline regulations, update requirements for waste management, and enhance the Commission’s ability to track and collect data on oilfield waste transport. These modifications are expected to impact the economics of oil and gas drilling projects, particularly for smaller operators, and could lead to increased demand for oilfield waste disposal services. to understand more, read this week’s post.
In the evolving landscape of the oil and gas industry, non-operating working interests are gaining attention for their unique role in upstream capital markets. These interests, characterized by smaller ownership and higher risks, offer a niche opportunity for investors looking for alternative avenues in the energy sector. With a focus on profit margins and cash flow returns, non-op companies like Northern Oil and Gas, Evolution Petroleum Corporation, and others are demonstrating varying degrees of success, presenting both challenges and opportunities for discerning investors.
The 4Q23 issue of Mercer Capital’s Exploration & Production newsletter focuses on the Haynesville Shale. Haynesville production held up reasonably well during the 2023 review period, particularly considering the sharp fall-off in the basin’s rig count. Despite the Henry Hub natural gas front month futures prices ending the year well below their starting point, the outlook for the Haynesville basin is favorable and anticipated to continue growing due to rising demand from LNG facilities and petrochemical plant development along the U.S. Gulf Coast.
In addition to our overview of the Haynesville, this newsletter also contains:
– Oil and Gas Commodity Price Update
– 2024 Outlook for the Industry
– Industry M&A Activity
– Public Company Performance
– Production Update
– Rig Counts
Download the newsletter to stay up to date on the industry.
