Acquisition and Divestiture Evaluations
NSAI is one of the most respected names in independent reserves reporting. We have delivered thousands of reports to petroleum and financial institutions throughout the world, including major and independent petroleum companies, gas transportation companies, banks, investors, and government agencies and companies. We frequently advise our clients on their potential acquisition or divestiture of oil and gas assets and have worked with most of the A&D groups in the energy industry. Our clients know that an NSAI report will be highly regarded in the financial marketplace.
We deliver a full and fair inventory of reserves and cash flow.
We can attend a data room, prepare a reserves report, and provide a full set of documentation on all stages of the acquisition or divestiture evaluation. We can supply a complete integrated team of engineers and geologists or a single individual to supplement and work within your team. In addition to experienced geological and reservoir engineering personnel, we also have staff who can provide operations engineering services and are available for site visits to assess existing facilities and operations. The following describes the general process we typically follow for an acquisition evaluation:
- Attend data room with client to meet with members of the seller’s technical team and review and collect data.
- If necessary, have operations engineer visit the field sites to perform an inspection of the production operations, interview key personnel, review reports and budgets, collect pertinent data, and gain an understanding of the likely risks to ongoing and future production plans.
- Return to NSAI office and review the available data.
- Conduct an independent geologic and engineering analysis. Depending on the properties, our evaluation may include the following:
- petrophysical evaluation of the well logs and core data
- geophysical evaluation of the seismic surveys
- structural interpretation of the horizons
- investigation of the production data, well tests, pressure data, and temperature and fluid data
- volumetric determination of the initial hydrocarbons-in-place in those reservoirs where performance data is judged to be insufficient for reserves estimation
- forecasts of future production rates consistent with performance to date and offset operations
- estimation of reserves and recovery factor
- evaluation of planned workover, drilling, and enhanced recovery projects based on results of recent programs and analogous operations
This independent effort can be scaled down and used as a screening process (we would review existing maps and technical evaluations) to determine if the reserves and cash flow presented in the data room are reasonable. We understand the timing of a deal is paramount and will work with you to meet the deadline.
- Evaluate the development plans and associated future capital expenditures.
- Review historical operating expenses and wellhead oil and gas prices and differentials in order to establish an expense and pricing model.
- Provide economic valuations associated with the production forecasts for each category of reserves and/or resources.
- Prepare a report setting forth our estimates of proved, probable, and possible reserves, revenue, expenses, capital, and discounted present worth for the properties.
- Comment on or evaluate any additional upside reserves or resource potential.
- We would follow a similar procedure for clients requiring a sales report, in which case we could also provide data room assistance (on- or off-site) for potential purchasers.
To talk to one of our Acquisition and Divestiture experts regarding an evaluation, call Bob Barg in our Dallas office at 214-969-5401 or Rick Talley in our Houston office at 713-654-4950. We can also be contacted by email at firstname.lastname@example.org for more information.