After an extraordinarily challenging 2020, 2021 gave Oil & Gas companies some respite and (perhaps most importantly) some optimism going into 2022. As we enter the new year, we look back at to see what was popular with you – our readers. Below is a list of some of our top posts of 2021.
In this post, David Smith covers key aspects of solvency opinions. Regardless of whether a company files for Chapter 11, is party to an M&A transaction, or executes some other form of capital restructuring – such as new equity funding rounds or dividend recaps – one fundamental question takes center stage: Will the company remain solvent?
While the mania around SPACs (special purpose acquisition companies) has subsided since its peak in early 2021, SPACs continue to be a key driver of capital markets activity. Alex Barry looks at oil & gas companies that were early adopters of the SPAC structure, the recent pivot of SPACs towards energy transition companies, and looks forward to see what the future might hold for the few remaining oil & gas-focused SPACs.
Mineral Aggregator Valuation Multiples
An important trend in the mineral and royalty ownership space has been the rise of mineral aggregators, which have largely supplanted the trusts as the primary method of publicly traded minerals ownership. Due to a variety of corporate structures and complex capital structures, mineral aggregator values pulled from databases are often missing meaningful components, leading to skewed valuation multiples. Mercer Capital has thoughtfully analyzed the corporate and capital structures of publicly traded mineral aggregators to derive meaningful valuation multiples on a historical and forward-looking basis. Look back at data from March, May, August, and November of 2021.
While oil & gas and ESG (environmental, social, and governance) investing may seem at odds with each other, operators have increasingly included ESG talking points in their management commentary, signaling a proactive initiative rather than reactive response. Justin Ramirez discusses ESG criteria among E&P operators and looks at trends from 2016 to 2020.
As commodity prices have risen and profits have rolled in, so have accusations of price gouging by oil & gas companies. Despite higher prices, producers haven’t materially increased production or announced aggressive drilling plans. Bryce Erickson identifies some of the reasons why, including supply and demand dynamics, rising costs, and capital headwinds.
We look forward to 2022 and appreciate your interest in this blog. May you and your family enjoy a happy and prosperous year!