Energy Valuation Insights

November 3, 2023 Special Topics

D CEO’s 2023 Energy Awards

Mercer Capital recently attended D CEO’s 2023 Energy Awards, an event that recognizes significant contributions to the energy sector in the Dallas Fort Worth area, including both traditional and renewable energy achievements. The ceremony highlighted the importance of integrating sustainable energy practices, exemplified by Lee Graves’s award for Renewable Energy Executive of the Year, and celebrated major industry milestones like Exxon’s acquisition of Denbury. In a blend of personal and professional narratives, the prestigious Legacy Award was presented to Kelcey Warren of Energy Transfer Partners, featuring discussions of his career and philanthropic impact on the city, notably Klyde Warren Park.

October 27, 2023 Marcellus and Utica Shale

Just Released | 3Q23 Exploration & Production Newsletter

Third Quarter 2023 | Regional Focus: Appalachian Basin

In this quarter’s newsletter, we report that Appalachian production fared well over the last year, particularly considering the sharp decline in the Henry Hub price. Despite the Henry Hub decline, the Appalachian rig count decline was less than that of two of the three oil-rich basins presented, largely due to Appalachia’s higher production declines, which require a higher rig count to maintain production levels.

October 20, 2023 Special Topics Valuation Issues

Energy Values Take Hits….And Keep Moving Forward

In a time where numerous things could dampen demand, prices, profits, and valuations, the energy industry continues an upward trend.

October 13, 2023 Special Topics

Now Available: Mercer Capital’s 2023 Energy Purchase Price Allocation Study

Mercer Capital is pleased to announce the release of the “2023 Energy Purchase Price Allocation Study.” This study provides a detailed analysis and overview of valuation and accounting trends in different subsectors of the energy space for the 2022 calendar year. This study researches and observes publicly available purchase price allocation data for four sub-sectors of the energy industry: (i) exploration & production; (ii) oilfield services; (iii) midstream; and (iv) refiners and marketers. 

This study is unlike any other in terms of energy industry specificity and depth. The study provides a detailed analysis and overview of valuation and accounting trends in each sub-sector. It also enables key users and preparers of financial statements to better understand the asset mix, valuation methods, and useful life trends in the energy space as they pertain to business combinations under ASC 805 and GAAP fair value standards under ASC 820. We utilized transactions that closed and reported their purchase allocation data in calendar year 2022.

October 6, 2023 Domestic Production Special Topics

Leading America Toward Energy Independence

Hart Energy LIVE’s America’s Natural Gas Conference 2023

The recent America’s Natural Gas conference shed light on crucial themes in the energy sector, highlighting an increasing demand for liquefied natural gas (LNG) amid challenges like insufficient pipeline and storage infrastructure, which poses a substantial hurdle to meeting the soaring need both domestically and internationally. Noteworthy initiatives, such as Mexico Pacific’s strategic LNG facility, aim to bridge infrastructural gaps by delivering responsibly sourced natural gas from the Permian Basin to Asian markets, while also focusing on a sustainable and strategic location to optimize shipping and pricing. The discourse at the conference also underscored the notable reduction of CO2 emissions with the rising market share of natural gas, as well as the pragmatic and logistical challenges faced by renewable energy endeavors, indicating that a balanced, multi-faceted approach to energy transition is imperative in ensuring reliability, sustainability, and affordability in global energy supply.

September 22, 2023 Marcellus and Utica Shale

Appalachian Production Marches on Despite Henry Hub Plunge

The economics of oil & gas production vary by region.  Mercer Capital focuses on trends in the Eagle Ford, Permian, Bakken, and Marcellus and Utica plays.  The cost of producing oil and gas depends on the geological makeup of the reserve, depth of reserve, and cost to transport the raw crude to market.  We can observe different costs in different regions depending on these factors.  This quarter, we take a closer look at the Marcellus and Utica shales.

September 14, 2023 Marcellus and Utica Shale Mergers, Acquisitions, & Divestitures

Inside the Board Rooms of a $5.4 Billion Oil and Gas Merger

Explore the behind-the-scenes journey of the $5.4 billion merger between Sitio Royalties Corp., a key Marcellus Shale player, and Brigham Minerals, Inc. From initial boardroom discussions to the complex interplay of exchange ratios and legal negotiations, see how two of the largest public companies in the mineral and royalty sector and their legal and financial advisors navigated challenges to achieve a strategic consolidation. Read how business strategies, market conditions, and negotiations shaped an industry leader in mineral and royalty acquisitions.

September 1, 2023 Special Topics

Themes from Q2 2023 Earnings Calls

Part 2: Oilfield Service (“OFS”) Companies

Despite initial downward trends in commodity prices in 2023, a sustained period of healthy prices, particularly for crude oil, has instilled an industry-wide sense of optimism about future growth in spending. Key industry leaders emphasize the role of technologies in boosting operational performance, echoing the sentiment that proper tech implementation is directly linked to better financial outcomes. As companies gear up for a prolonged upcycle in activities, technology and commodity prices are helping set the stage for an optimistic outlook through 2024 and beyond.

August 25, 2023 Mineral and Royalty Rights

Mineral Aggregator Valuation Multiples Study Released

With Market Data as of August 21, 2023

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.

August 18, 2023 Special Topics

Themes from Q2 2023 Earnings Calls

Part 1: Upstream

In the recent Q2 2023 earnings calls, upstream executives noted the shift in their focus from exploration to maintaining production through various strategies, such as acquiring legacy assets and implementing well workovers. Furthermore, leaders predict pressures on the global crude oil supply, with expectations of OPEC+ continuing their production cuts and minimal refinery capacity. Additionally, despite record production levels in the Haynesville Shale, there’s been a noticeable drop in drilling and completion activity, as natural gas prices continue to decline from 2022 highs. Dive deeper in this week’s blog.