Energy Valuation Insights

A weekly update on issues important to the oil and gas industry

Eagle Ford Shale Permian Basin Special Topics

Themes from Q1 2023 Earnings Calls

Part 1: Upstream

The Q1 2023 earnings calls from the upstream segment of the oil and gas industry have brought to light various viewpoints on shareholder returns, presenting a dichotomy between stock buybacks and dividends. Although the Eagle Ford region stands out with its high return rate and generous drilling inventory, the spotlight is gradually shifting towards the Permian Basin, where operators aspire to leverage better well economics, project scheduling flexibility, and cost savings for improved free cash flow.

Mergers, Acquisitions, & Divestitures Special Topics

Is TXO’s Strategy Paying Off?

The TXO Energy Partners IPO

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.

Special Topics Valuation Issues

IRS Valuation Guidance

Mines, Oil and Gas Wells, & Other Natural Deposits

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. 

Eagle Ford Shale

Value Focus | Exploration & Production

First Quarter 2023 | Region Focus: Eagle Ford

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.

Domestic Production Mergers, Acquisitions, & Divestitures Special Topics

Earnings Stability and Geopolitical Volatility

Two Foes Are Battling Once More

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.

Eagle Ford Shale

Eagle Ford M&A

Transaction Activity Picks Over the Past 4 Quarters

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.

Special Topics

Themes from Q4 2022 Earnings Calls

Part 2: Oilfield Service Companies

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.

Oil & Gas

Mercer Capital provides oil and gas companies, oil and gas servicers, and mineral & royalty owners with corporate valuation, asset valuation, litigation support, transaction advisory, and related services