M&A transaction activity in the Eagle Ford was fairly quiet throughout 2020 before Chevron’s $13 billion deal with Noble Energy. The Chevron-Noble Energy transaction and the Ovintiv-Validus deal could be foreshadowing a busier M&A market in 2021.
A weekly update on issues important to the oil and gas industry
M&A transaction activity in the Eagle Ford was fairly quiet throughout 2020 before Chevron’s $13 billion deal with Noble Energy. The Chevron-Noble Energy transaction and the Ovintiv-Validus deal could be foreshadowing a busier M&A market in 2021.
Volatile asset returns in the oil patch were commonplace last year. Those returns often got amplified in entities utilizing equity distribution waterfall allocation techniques. It all depended on the structure and how optionality was treated.
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.
Last week, we reviewed the fourth-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 aggregators’ fourth-quarter 2020 earnings calls.
In this post, we capture the key takeaways from fourth quarter 2020 earnings calls from E&P operators.
Oftentimes differences are a matter of perspective. Put another way – one person’s loss can be another person’s gain. One of the thematic differences between producers and mineral owners is their perspective on “Held By Production.” It elicits very different reactions depending on what side of the term one is on, and has a leverageable impact on value. With rig counts dropping to around half of last year’s count, how much acreage will be available for re-leasing this year? In this post, we decided to spend some time exploring this concept and its impact on the energy industry.
Irrespective of what industry or sector a company may operate in, 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.
The recent rise of oil prices is a welcome sign to mineral and royalty holders across the board. Low valuations may not last for much longer though. In the meantime, let us expound a bit on the forces keeping mineral and royalty valuations in their existing state.
Public transactions do not disclose the value associated with PUDs and unproven reserves, but instead, they indicate an aggregate value for a bundle of assets. The allocation of that value across the various assets acquired is up for debate. Recent transaction sheds some light on asset pricing in the current environment.
Year-end 2020 saw a flurry of tax-purposed project activity across all of Mercer Capital’s offices, with clients’ Estate Planning Counsel having recommended numerous gifts and other estate planning related transactions before 2020 came to a close. While we are all happy to have put 2020 in the rearview mirror, the passing of December 31st does not mean that the gifting opportunity has elapsed. Despite some level of recovery for parts of the Oilfield Services industry during Q4-2020, valuations remain at significantly depressed levels from where they were prior to March 2020. In addition, early indications of the Biden Administration’s intentions in regard to estate taxation indicate that the benefit of estate planning transactions will likely be greater in 2021 than in 2020.
