Energy Valuation Insights

June 3, 2019 Special Topics

How to Value an Oilfield Services Company

When valuing a business, it is critical to understand the subject company’s position in the market, its operations, and its financial condition. A thorough understanding of the oil and gas industry and the role of oilfield service (“OFS”) companies is important in establishing a credible value for a business operating in the space. Our blog strives to strike a balance between current happenings in the oil and gas industry and the valuation impacts these events have on companies operating in the industry. After setting the scene for what an OFS company does and their role in the energy sector, this post gives a peek under the hood at considerations used in valuing an OFS company.

May 24, 2019 Special Topics

What is an Oilfield Service Company?

This week’s post is the first in a series related to oilfield service companies. In this first post, we describe what an oilfield service company is, their place in the broader industry, and their key drivers.

May 17, 2019 Mineral and Royalty Rights

Royalty and Mineral Value Proposition Highlights Otherwise Underperforming Energy Sector

The burgeoning mineral market is leading the way for an energy sector that has lagged in returns for several years now. For this week’s post, we highlight the ascension of the estimated $400 to $600 billion onshore mineral market in the U.S, a topic discussed last month at the DUG Permian Basin Conference in Fort Worth.

May 6, 2019 Mergers, Acquisitions, & Divestitures Special Topics

Brigham Minerals IPO Brings Spotlight to Oil & Gas Market

Mineral Aggregators are Leading the Forefront in an Underwhelming Energy Sector

In this post, we will review the continued IPOs and valuation implications for the mineral aggregators market as well as examine Brigham’s operations and placement in this sector.

April 30, 2019 Eagle Ford Shale

2019 Eagle Ford Shale Economics

Challenging For Valuation Title Belt

Will the Eagle Ford win the profitability fight with other basins? It may not have the scale or heft of the Permian, but its profitability punches are as strong as anyone’s.

April 19, 2019 Domestic Production Special Topics

An Overview of Salt Water Disposal

Over the last 12 years the oilfield waste water disposal industry has grown exponentially, both on an absolute basis, and by rank of its importance/size among the oilfield services. This growth has been largely driven by the increased volumes of waste water generated in the production of oil from shale plays. This post discusses the basics of salt water disposal that has become so important given the rise of hydraulic fracturing.

April 8, 2019 Mineral and Royalty Rights

Considerations for Endowments Divesting Fossil Fuels

The purpose of an endowment is to provide a permanent source of funding that maintains the operations of colleges, universities, churches, etc.  To best serve its fiduciaries, an endowment should achieve the highest return possible.  Congruently, when divesting, the endowment must ensure it achieved a fair price for its investments. This post does not weigh in on the discussion of whether endowments should or should not liquidate fossil fuels.  Rather, we hope to educate and advise those who have decided to divest their fossil fuel assets and are unsure of how to proceed.

April 3, 2019 Mineral and Royalty Rights

From Enduro to Permianville

A Closer Look at Permianville Royalty Trust

In previous posts, we have discussed the relationship between public royalty trusts and their market pricing implications to royalty owners. Many publicly traded trusts are restricted from acquiring other interests, so they have relatively fixed resources, and the value of these trusts comes from generally declining distributions. In many cases, the royalty comes from a related operator, though this is neither required nor characteristic of all trusts. There are also other MLPs such as Kimbell Royalty Partners, Viper Energy Partners, Dorchester Minerals, and Black Stone Minerals that are aggregators consistently gobbling up new acreage. In this post, we explore the subject characteristics of Permianville Royalty Trust, formerly known as Enduro Royalty Trust.

March 28, 2019 Eagle Ford Shale

O(i)l Faithful

Eagle Ford Region Overview

Nearly a quarter of the way through 2019, prices have rebounded somewhat after a tumultuous end to 2018.  First quarter energy prices again moved in opposite directions, with crude prices increasing steadily over the period while natural gas prices decreased from $2.94 to $2.80 per Mcf by mid-March despite peaking at over $3.50 in mid-January.

March 21, 2019 Eagle Ford Shale Mergers, Acquisitions, & Divestitures

M&A in the Eagle Ford Shale

Over the last twelve months, the Eagle Ford Shale region has experienced steady growth and healthy transaction activity. The region’s strengths, such as its low cycle times, high oil cuts and Louisiana Light Sweet crude and Brent oil pricing, has facilitated free cash flow and made the area attractive to both investors and operators.