A weekly update on issues important to the oil and gas industry
When comparing a royalty interest to an ORRI, it is critical to understand the subtle nuances of the rights and restrictions between the two. Owners of royalty interests utilizing Permian Basin Royalty Trust as a valuation gauge should adjust for such differences as well as other differences between publicly traded and non-marketable securities.
In this blog post, we outline prevalent general themes in the downstream oil market that have given refiners hope for 2018 as well as those that cause skepticism about the future.
Depending on which side of an oil and gas negotiation one is on, Held By Production (HBP) provisions can be a favorable, or unfavorable, value contributor. We discuss the concept and provide helpful information for mineral owners to consider.
We recently published a white paper explaining how to value an E&P company. The purpose of the paper is to provide an informative overview regarding the valuation of exploration and production (E&P) companies operating in the oil and gas industry.
From the first Board Meeting to the last session of the conference, post-production deductions were discussed in great detail at the NARO National Convention. Why were these deductions brought up time and time again? Because post-production deductions affect the value of a mineral owner’s interest yet the regulations surrounding them is somewhat unclear and exists mainly on a contractual basis.
In this post, we consider both the human and industry impact of Hurricane Harvey.
Last week, we analyzed the SEC’s $6.2 million settlement with a Big 4 audit firm relating to auditing failures associated with Miller Energy Resources, an oil and gas company with activities in the Appalachian region of Tennessee and in Alaska. The SEC order determines that the Big 4 audit firm did not properly use the reserve reports conclusion of PV-10 (present value at 10%). This post considers the proper use of reserve reports and risk adjustment factors when determining fair market value.
Originally published on Mercer Capital’s Financial Reporting Blog, Lucas Parris analyzed the SEC’s $6.2 million settlement with a Big 4 audit firm relating to auditing failures associated with Miller Energy Resources, an oil and gas company with activities in the Appalachian region of Tennessee and in Alaska.
Mercer Capital attended the Summer NAPE Expo in Houston this month. We discuss highlights of the expo in this week’s blog post.
One of the primary challenges for industry participants when valuing and pricing oil and gas reserves is addressing proven undeveloped reserves (PUDs) and unproven reserves. While the market approach can sometimes be used to understand the value of PUDs and unproven reserves, every transaction is unique. Additionally, many transactions that we see today are still a result of the crash in oil prices in 2014; and in some sales of non-core assets, PUDs and unproven reserves have been deemed worthless. Why then, and under what circumstances, might the PUDs and unproven reserves have significant value?
