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Transactions & Valuations Consulting

Learn more about Transactions & Valuations Consulting
Helping you make informed decisions about major hydrocarbon investments and M&A opportunities

The upstream oil and gas industry is in the midst of one of its largest transitions. Sustained low oil prices continue to challenge existing business models, forcing companies to reexamine their value propositions, portfolios and strategies. At the same time, the low oil price environment has opened up attractive possibilities for acquiring energy assets.

S&P Global can help you evaluate major hydrocarbon investments and screen upstream M&A opportunities with our independent, quantitative due diligence analysis that focuses especially on underlying energy value drivers and risks. Our services are underpinned by our extensive in-house data, analytics and tools, ranging from global E&P data and asset valuation to transactions data and research.

We provide:

  • Technical and commercial due diligence – Evaluation of resources, development plans, costs, regulatory landscape and the underlying markets
  • Asset and corporate valuations – Bottom-up valuations for oil and gas assets worldwide, upstream energy company valuations using trading multiples, asset valuations based on precedent transaction metrics, leveraging our database of 40,000+ M&A transactions over the past 20 years
  • Support through M&A cycle – Support for screening, origination, executing and negotiating deals to a close, including bid support and post-acquisition integration

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Services

Technical and Commercial Due Diligence

The fall in oil prices has seen a commensurate rise in energy assets for sale as companies strive to deleverage and refocus their portfolios. While some areas, such as the Permian, are seeing a flurry of activity, elsewhere activity is hampered by a lack of access to capital. Deal activity is slowly increasing, however, led by private equity buyers and majors/NOCs with sizeable cash reserves. Oil price volatility has made it difficult for participants to achieve consensus on value and outlook, and the shortage of availability of equity and debt financing has meant that IOCs have been experiencing liquidity issues.

S&P Global experts offer a suite of comprehensive technical and commercial due diligence services to help you evaluate hydrocarbon investments and M&A opportunities. Our approach to due diligence is very strategic in that we pay particular attention to the underlying assumptions that drive value. S&P Global is uniquely positioned to integrate subsurface, costs and development, technological and commercial evaluation. We provide an independent view that helps our clients to maximize their global investments.

Find answers to questions, such as:

  • What are the key value drivers and strategic intent behind this M&A deal?
  • What is the technical quality of the asset(s) for sale?
  • What are the key technical and commercial risks and upsides associated with the investment?
  • What’s the size of the market into which I am about to buy?
  • What will it cost to develop this asset?
  • What is the business environment and regulatory landscape?


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Asset and Corporate Valuations

Our experts can help you assess the value of a specific oil or gas asset (portfolio or company). We generate and validate critical assumptions for evaluation, such as production profiles, development costs, pricing and macroeconomic outlooks. We also provide an independent value assessment through customized valuation models that combine detailed discounted cash flow and multiples-based evaluations.

Support through M&A cycle

S&P Global upstream consultants provide support from bid to post-acquisition:

  • Screening of potential opportunities
  • Help with origination efforts
  • Support through transaction execution phase
  • Negotiation support
  • Board approval support and validation of investment decision
  • Ongoing support for managing portfolio assets including (but not limited to):
    • Project development
    • Regulatory compliance, risk analysis and quantification
    • Strategy
    • Technical/reservoir management
    • Cost estimation
    • Ongoing energy market analysis of trends, risks and more

Industry Success Stories

North Sea supply analysis in support of an infrastructure due diligence

A private equity firm needed an independent assessment of North Sea gas supply to support an investment in processing and pipeline infrastructure. S&P Global provided a market outlook for the gas throughput for the infrastructure under consideration, ensuring the client’s confidence in the investment decision.

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Acquisition support for a multi-billion dollar investment

An Asian sovereign wealth fund needed a comprehensive valuation and strategic due diligence support to bid on a multi-billion dollar global E&P portfolio. S&P Global provided an independent evaluation of the portfolio, which consisted of more than 300 assets and prospects, enabling the client to place a successful bid.

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Acquisition opportunities in North American unconventional plays

A large corporation in Japan needed to evaluate a partnership opportunity in a North American shale play and wanted to understand how the transaction would impact net income and cash flow. S&P Global created a probabilistic valuation model that allowed the client to evaluate the partnership opportunity and make a successful bid for it.

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Evaluating an investment opportunity in a small shale gas company

An international private equity firm was looking to become a passive investor in an early-stage E&P company with a small position in the Appalachian Basin. S&P Global provided the firm with a comprehensive evaluation of the investment and a post-acquisition business plan.

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Due diligence and valuation analysis for an investment bank

An investment bank wanted to evaluate an oil service company for a potential acquisition and needed a forecast for well services activity under different scenarios. S&P Global generated well drilling and rig requirement forecasts based on oil and gas production outlooks, providing a clear view of well service companies’ revenues and market share under different scenarios.

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Technical and market evaluation for a proposed acquisition in Eastern Europe

A Middle Eastern investor needed to value an Eastern European company’s gas field and drilling rigs for an acquisition. S&P Global assessed the field’s remaining reserves/future well workover and estimated rig maintenance/replacement costs – all within the context of future gas prices and rig rates in the country. The investor used the analysis to carry out the acquisition.

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  • Oil & Gas Upstream
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  • Technical Publications & Reference Documents
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