Energy Valuation Insights

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

Special Topics

Limited Partners, What Are Your Rights?

Legal Rights and Valuation Considerations For Your Limited Partner Interest

A partnership is a business owned by two or more individuals. In its most basic form, a partnership typically falls into one of three categories: a general partnership, a joint venture, or a limited partnership. While the specifics of these three types can vary depending on the goals of the business, they all share similar features. For the purposes of this post, we will be examining benefits and rights we have come across in performing valuations over various types of partnership structures and their relation to value.

Mineral and Royalty Rights Special Topics

Risk and Return

Working Interests and Royalty Interests

When valuing mineral interests, it is important to consider the nuances of the each type of mineral interest. Given that risk and asset values are indirectly related, it is important to keep in mind the various risk factors which pertain to the mineral interest. We’ll begin by examining the various risks surrounding both types of interests.

Mineral and Royalty Rights

Mineral Interest Owners: How to Know What You Own

As we’ve discussed, there are plenty of factors to consider when determining the value of mineral interests. 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 post is geared towards those mineral interest owners who have less knowledge on the subject and should serve as a guide for those looking to learn more about what they own.

Mergers, Acquisitions, & Divestitures

Oilfield Services in 2018

A Year in Review

Companies in the energy sector and the broader market experienced an interesting year showing steady and strong growth in Q1-Q3 and met volatility in Q4, which effectively erased gains on the year and even resulted in negative returns. The oilfield services (OFS) sector, in particular, was impacted heavily during last quarter’s downturn driven primarily by fears of oversupply in the market and E&P companies cutting back and looking for discounts.

Special Topics

Q4 2018 Review and Outlook for 2019

Q4 2018 was truly a dramatic quarter for the industry. It marked the end of the two and a half-year oil price recovery that began in 2016, while natural gas prices reached their highest point since 2014. With ongoing oversupply concerns, stabilizing geopolitical tensions, and lower forecasts for global oil demand, it appears in 2019 oil prices have a long way to recover to its previous high in 2018.

Marcellus and Utica Shale

Cooler Weather Could Heat Up Appalachia

As the calendar turns to 2019, we turn our attention to the Appalachia region, and not by coincidence. Cooler temperatures in the winter months tend to lead to increased natural gas prices and consumption, and the Appalachia region is the largest natural gas producer in the country.  Fourth quarter energy prices have moved in opposite directions, with crude prices declining steadily over the period while natural gas prices increased from about $3.0 to $3.5 per Mcf, peaking at over $4.8 in mid-November.

Marcellus and Utica Shale

M&A in the Marcellus-Utica Shale

The Beast in the East

The domestic natural gas market has benefitted from large expansion in recent years, and this can be largely attributed to the growth experienced in Appalachia. Despite the continued growth, transaction activity in the Marcellus-Utica in 2018 was slower than in 2017. Some companies have been moving in to capitalize on the increased demand for natural gas while others are restructuring their balance sheets in order to focus primarily on higher margin assets, such as oil.

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