Summary: Conducting a due diligence investigation is an integral requirement for obtaining project financing. Savvy investors know that the devil is in the details. They want to do business with acquirers whose management have command of the complexities, who have identified the pitfalls and liabilities that can lead to failure, and who have proactively come up with solutions to those potential problems. You cannot address a problem if you do not know it exists. Due diligence is the crux of the matter.
Acquisition Planning & Implementation
White Paper, World Jr. Oil & Gas Congress, London
December 1, 2008
Authors: John Graves, Steven King, Dana Sweet, Charles Parkerson, Edited by John Graves
Summary: Mergers, acquisitions, and divestitures have become a core part of creating value. Yet despite the considerable experience and interest in M&A and A&D, many transactions fail to create value, and some actually diminish it. Energy transactions are especially vulnerable to fluctuations in oil and gas prices. The strategic importance of effective transaction planning and implementation is crystal clear.
Summary: An earnout is a mechanism in which part of the purchase price is contingent upon future performance of the target business. A typical earnout might include payments to the seller every year for three to five years based on a percentage of the revenue of the target business that exceeds targeted levels. The advantages, disadvantages, and potential problems and pitfalls are examined.
Summary: A comprehensive study of the U.S. domestic oil and gas service industry for the purpose of identifying opportunities for investment, including a review of the existing industry, the identification of key players and their capabilities, the examination of current trends and a review of U.S. E&P company budgets and spending;