Energy Valuation Insights

March 25, 2022 Eagle Ford Shale Mergers, Acquisitions, & Divestitures

Eagle Ford M&A

Transaction Activity Over the Past 4 Quarters

M&A activity in the Eagle Ford has picked up over the past year in terms of both deal count and the amount of acreage involved. The 10 deals noted over the past year were split evenly between property/asset acquisitions and corporate transactions, such as the Desert Peak Minerals-Falcon Minerals Corporation merger announced in mid-January of this year. This signals a notable increase in corporate-level activity as only one of the eight transactions in the prior year involved a corporate transaction, possibly foreshadowing greater industry consolidation in the Eagle Ford moving forward. Read more in this week’s post.

March 17, 2022 Mineral and Royalty Rights

Mineral Aggregator Valuation Multiples Study Released

With Market Data as of March 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.

March 11, 2022 Mineral and Royalty Rights Special Topics Valuation Issues

Themes from Q4 Earnings Calls

Part 3: Oilfield Service Companies

After summarizing the key topics from Q4 earnings calls from public E&P operators and Mineral Aggregators, this week, we turn our attention to the Q4 earnings calls from Oil Field Service companies. Key themes include 1) macroeconomic headwinds, such as labor shortages and supply chain constraints; 2) the anticipation of greater M&A activity and industry consolidation in 2022; and 3) ESG, including recognition of OFS operator initiatives from outside the industry, the mitigation of environmental impacts on local communities at present, and projections of continued demand for ESG-focused services.

March 4, 2022 Mineral and Royalty Rights Special Topics Valuation Issues

Themes from Q4 Earnings Calls

Part 2: Mineral Aggregators

In Part 1: Themes from Q4 E&P Operator Earnings Calls last week, we noted themes of cost inflation, a shift in production focus from natural gas to liquids, and macro policy headwinds.  This week, we focus on the key takeaways from the mineral aggregator Q4 2021 earnings calls – specifically discipline in an elevated pricing environment, stagnant production, and strength in position amid inflationary environment.

February 24, 2022 Special Topics Valuation Issues

Themes From Q4 Earnings Calls

Part 1: E&P Operators

In the last round of earnings calls for 2021, cost inflation was discussed with a bit more granularity than in recent quarterly calls, strengthening oil prices sparked a shift in focus towards the liquid hydrocarbon streams, and commentary regarding macro policies targeting hydrocarbons were prevalent in E&P management discussions.

February 18, 2022 Special Topics Valuation Issues

Oilfield Services 2022

The Rise of the OFS Bulls

In our Energy Valuation Insights from last week, Bryce Erickson focused on Oilfield Services (OFS) company valuations. This week we follow the same OFS theme, but with a focus on OFS “expectations” and the question: “Has the OFS industry turned the corner to a more prosperous outlook?” 

February 11, 2022 Special Topics Valuation Issues

Oilfield Service Valuations: Dawn Is Coming

“The dawn is coming!” This phrase comes to mind as we observe valuations and prospects for oilfield service companies. It has been tough sledding for OFS companies during COVID. At the end of 2020, rig counts were around 350 and DUC counts were high.

However, as we’ve been talking about for the past several weeks, things have changed for the positive as far as the industry is concerned, and it’s going to get better according to presenters at the recent NAPE Global Business Conference in Houston.  The current U.S. rig count is now at 613 and may be heading to 800 this year if OFS companies can fill a real labor shortage gap.

However, when it comes to valuations, assuming oilfield service companies will join the recovery has not always been true in the shale era.  That said – this time may be different.

In this week’s post, we note the past and current performance of oilfield service companies and discuss the valuation trends for the industry.

February 4, 2022 Special Topics

Meet The Team

Bryce Erickson, ASA, MRICS

In each “Meet the Team” segment, we highlight a different professional on our Energy team. This week we highlight Bryce Erickson, Senior Vice President of Mercer Capital and the leader of the oil and gas industry team. The experience and expertise of our professionals allow us to bring a full suite of valuation, transaction advisory, and litigation support services to our clients. We hope you enjoy getting to know us a bit better.

January 27, 2022 Bakken Shale Eagle Ford Shale Permian Basin Special Topics

Q1-Q3 2021 Themes From Oilfield Service Company Earnings Calls

As our readers are well aware, Mercer Capital tracks and reviews themes from the quarterly earnings calls of E&P operators and mineral aggregators, providing key insights into the upstream perspective on U.S. oil and gas. 

In this post, we look at oilfield service (OFS) company earnings calls for the first three quarters of 2021. 

January 21, 2022 Mergers, Acquisitions, & Divestitures Special Topics

Desert Peak to Go Public via Merger With Falcon After IPO Attempt

Desert Peak Minerals and Falcon Minerals Corporation recently announced an all-stock merger, forming a pro form a ~$1.9 billion mineral aggregator company.  This comes in the wake of Desert Peak’s attempted IPO in late 2021.  In this post, we look at the transaction terms and rationale, the implied valuation for Desert Peak, and implications for the mineral/royalties space.