A weekly update on issues important to the oil and gas industry
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.
This week, we explore the Q4 2025 earnings calls of Upstream and OFS companies, noting a focus on optimizing existing assets vs. M&A, capital allocation, and how companies are reacting to tightening supply. We examine some notable quotes from recent earnings call transcripts to gain insights into how industry leaders are navigating current challenges and positioning themselves for the future in an evolving energy landscape.
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.
