This article outlines the general approach LM+Co and Gruy applied in their analysis, and also suggests several important considerations for teams attempting to value oil and gas assets.Īlthough valuing oil and gas assets is not necessarily more difficult than valuing other asset classes, valuing these types of assets requires a detailed understanding of the relative merits of traditional valuation methods. (“Gruy”) a petroleum engineering firm based in Houston, to provide a comprehensive valuation analysis on a specifically targeted portion of the Company. In the Energy XXI case, Loughlin Management Partners + Company (“LM+Co”), a boutique restructuring advisory firm based in New York, partnered with HJ Gruy and Associates, Inc. These cases highlight the importance of retaining professionals who fully understand the technical aspects of performing a valuation analysis on oil and gas assets, and who can also apply their experience in valuing these types of assets in order to tailor their assumptions and inputs to the unique characteristics of the specific assets associated with the restructuring. In the recent Sabine Oil & Gas and Energy XXI cases, stakeholders clashed over competing interests, and claims hinged on very different views of the value of the respective companies’ assets. In restructurings involving oil and gas reserves, the valuation analyses are often more complex because of the technical data and skillset required to value these reserves. Whether in court or out of court, in most restructuring situations involving stakeholders with various claims to a Company’s assets, the valuation of these assets is a critical component. By Aaron Kibbey, Robert Rasor & Brian Bostwick
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