Energy Valuation Insights

A weekly update on issues important to the oil and gas industry

Bakken Shale Bankruptcy Valuation Issues

Bridging Valuation Gaps: Part 1

Due to a precipitous drop in oil prices since June 2014, oil exploration and production companies in the US have struggled to pay their debts and in many cases have had to file for bankruptcy. This is the first post in a three part series examining how option pricing, a sophisticated valuation technique, can be used to understand the future potential of the assets most affected by low prices, PUDs and unproven reserves.

Downstream Analysis

How Sweet It Was

Refiners anticipated crude oil exports would increase when the export ban was lifted which reduced excess supply in the US and relieved the downward pressure on market prices. Once the price of crude increased in the US, refiners profit margins shrink, and profits shrank as expected. But with falling crude prices worldwide, the compression of downstream margins cannot be explained by the story refiners expected.

Oil & Gas

Mercer Capital provides oil and gas companies, oil and gas servicers, and mineral & royalty owners with corporate valuation, asset valuation, litigation support, transaction advisory, and related services