Energy Valuation Insights

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

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The “Best” of 2020

Energy Valuation Insights’ Top Blog Posts

As we hope for a better 2021, we look back at 2020 to see what was popular with you ­– our readers. This post includes a list of some of our top posts of 2020.

Special Topics Valuation Issues

What Is a Reserve Report?

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. In this post, we provide a general overview of a reserve report, detailing why they’re important, what they contain, and how they’re prepared.

Valuation Issues

How to Use an EV/Production Multiple

Oil and gas analysts use many different metrics to explain and compare the value of an oil and gas company, specifically an exploration and production (E&P) company. The most popular metrics (at least according to our eyeballs) include (1) EV/Production; (2) EV/Reserves; (3) EV/Acreage; and (4) EV/EBITDA(X). Enterprise Value (EV) may also be termed Market Value of Invested Capital (MVIC) and is calculated by the market capitalization of a public company plus debt on the balance sheet less cash on the balance sheet. In this post, we will dive into one of these four metrics, the EV/Production metric, and explore the most popular uses of it.

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Themes from Q3 2020 Earnings Calls

Part 2: Mineral Aggregators

Last week, we reviewed the third quarter earnings calls for a select group of E&P companies and briefly discussed the macroeconomic factors affecting the oil and gas industry.  In this post, we focus on the key takeaways from mineral aggregator third quarter 2020 earnings calls.

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Mineral Aggregator Valuation Multiples Analysis

Market Data as of November 10, 2020

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. Check out our report in this post.

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