Gulf of Mexico Deepwater: Reducing Acquisition Risk Through Technical Due Diligence
A South American independent producer continuously investing in new opportunities to enhance their portfolio of producing assets requested assistance in their due diligence of a potential acquisition opportunity. As the company considered purchasing the interests of a deepwater oilfield in the Gulf of Mexico, it wanted to understand the uncertainties and the technical aspects of the reserves to support an accurate valuation.
GET IN TOUCH
Project Highlights
- Technical analysis prior to potential acquisition
- Geological and engineering expertise to support valuation
- A subsalt oilfield in the deepwater Gulf of Mexico
- Potentially 90 – 325 million BBL of oil in place
Challenges:
The producer only had access to the seller’s technical interpretation and production forecasts but not the seismic data that led to the interpretation
The company needed a more in-depth understanding of the geological and engineering aspects to be more comfortable in establishing a valuation
The company needed a more in-depth understanding of the geological and engineering aspects to be more comfortable in establishing a valuation
Solutions:
Sproule ERCE brought geological and engineering expertise to help the producer form a complete picture of the opportunity and risks
Sproule ERCE visited the data room in Texas to review the vendor’s technical interpretation and production forecast. Without the ability to view the seismic data, Sproule ERCE relied on the vendor’s interpretation and its own knowledge of deepwater Gulf plays to present a detailed technical analysis of the opportunity and a risk profile
The advisory project highlighted upside potential and technical uncertainty in the vendor’s production forecast
Sproule ERCE completed the review and analysis within a two-week timeframe
Sproule ERCE visited the data room in Texas to review the vendor’s technical interpretation and production forecast. Without the ability to view the seismic data, Sproule ERCE relied on the vendor’s interpretation and its own knowledge of deepwater Gulf plays to present a detailed technical analysis of the opportunity and a risk profile
The advisory project highlighted upside potential and technical uncertainty in the vendor’s production forecast
Sproule ERCE completed the review and analysis within a two-week timeframe
Values:
With Sproule ERCE technical and commercial insights, the producer gained a much clearer view into the risk profile of the opportunity and now had the information required to make a reasonable and supported purchase offer.