Energy Valuation Insights

October 21, 2022 Special Topics

Now Available: Mercer Capital’s 2022 Energy Purchase Price Allocation Study

Mercer Capital is pleased to announce the release of the “2022 Energy Purchase Price Allocation Study.” This study provides a detailed analysis and overview of valuation and accounting trends in different subsectors of the energy space for the 2021 calendar year. This study researches and observes publicly available purchase price allocation data for four sub-sectors of the energy industry: (i) exploration & production; (ii) oilfield services; (iii) midstream; and (iv) refiners and marketers. 

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 each sub-sector. This study 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 closed and reported their purchase allocation data in calendar year 2021.

October 12, 2022 Special Topics

How Waves Of Reality Are Swelling Upstream Returns

Upstream and oilfield service companies have bucked investment trends most of this year. While other industries have had stagnant to negative returns, the oil patch has outperformed them all. Several realities have come to the forefront to build this wave: world, production, and capital realities.

October 7, 2022 Mineral and Royalty Rights

Mineral Interest Owners: How to Know What You Own

Because of the popularity of this post, we revisit it this week. Originally published in 2019, this post is as a guide for mineral owners who are seeking to learn more about what they own.

September 30, 2022 Bakken Shale

Bakken Regains Its Footing

The economics of Oil & Gas production vary by region. Mercer Capital focuses on trends in the Eagle Ford, Permian, Bakken, and Marcellus and Utica plays. The cost of producing oil and gas depends on the geological makeup of the reserve, depth of reserve, and cost to transport the raw crude to market. We can observe different costs in different regions depending on these factors. This quarter we take a closer look at the Bakken.

September 21, 2022 Bakken Shale Mergers, Acquisitions, & Divestitures

Bakken M&A

Increased Transaction Volume Continues into 2022

M&A transaction activity in the Bakken increased through year-to-date 2022 relative to the same time period in 2021 and consisted of a handful of large deals and numerous small deals. In this post, we discuss Bakken transaction activity as a whole and also dive deeper into the two largest Bakken transactions made this year.

September 9, 2022 Special Topics

Themes from Q2 2022 Earnings Calls

Part 2: Oilfield Service Companies

This week we focus on the key takeaways from Oilfield Service Operators’ Q2 2022 earnings calls. We discuss how COVID impacted the OFS industry, a shift in strategy due to limited supply, and the industry’s outlook in the face of a potential recession. 

September 2, 2022 Special Topics

Themes from Q2 2022 Earnings Calls

Part 1: Upstream

This week, we focus on the key takeaways from the Q2 2022 Upstream earnings calls including strong balance sheets, the increasing role of share buybacks, and supply and demand in the global oil & gas commodities market.

August 26, 2022 Mineral and Royalty Rights

Mineral Aggregator Valuation Multiples Study Released

With Market Data as of August 15, 2022

Mercer Capital has its finger on the pulse of the minerals market.  An important trend has been the rise of mineral aggregators, which have largely supplanted the trusts as the primary method of publicly traded minerals ownership.

In this updated Study, 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.

August 19, 2022 Permian Basin

Value Focus | Exploration & Production

Second Quarter 2022 | Region Focus: Permian

Mercer Capital’s Value Focus: Exploration & Production newsletter provides an overview of the industry through supply and demand analysis, commodity pricing, and public market performance. In addition, each issue of this quarterly newsletter focuses on a region, including, Eagle Ford, Permian, … Continued

August 12, 2022 Mergers, Acquisitions, & Divestitures Special Topics

What Is a Fairness Opinion And What Triggers the Need for One?

A fundamental question arises as mergers and acquisitions persist and company boards and management teams survey their options when a proposed transaction is put on the table: is it fair to all direct stakeholders? This post reviews the basics of fairness opinions and when you should obtain one.