Oil and Gas Technical Due Diligence
Since 2009, we have gained extensive experience working in the WCSB, US and all over the globe. Using advanced workflows, our multidisciplinary team has helped our clients assess the technical and economic merits of asset transactions and other investment opportunities. A detailed understanding of potential values and associated risks are critical components of making smart business decisions.
What is Technical Due Dilligence?
A detailed investigation of the technical and economic merits of a transaction or other investment opportunity
- One of the most critical aspects of the overall due dilligence process
- Verification of initial assumptions regarding the value of the transaction or investment
- Detailed review of potential risks and items requiring additional attention prior to closing
A successful technical due diligence process does not necessarily translate into a successful transaction or investment, but instead focuses on making high quality, well informed business decisions to drive corporate value
- Any potential risks or issues have been identified to let the buyer make an informed decision
- Provide critical insights about when to walk away from a risky investment
Why is Technical Due Diligence Critical Before Closing a Transaction or Investment in Oil and Gas Industry?
Sales brochures and other investment materials often provide a big picture view of potential, but usually only focus on upside as it pertains to the seller. Prior to closing, the buyer or investor needs a strong understanding of potential, the cost of unlocking that potential and any risks associated. With over 15 years of asset evaluation experience across multiple disciplines of geoscience and engineering our team can provide timely evaluation using cutting-edge techniques to answer the critical questions needed to protect your investment.
Critical Items to Consider When Assessing Potential Value
- With over 15 years of asset evaluation experience we can provide early insights as to whether adequate due dilligence is feasible prior to set closing timelines
- All required data is available and provided in a useable format
- Assumptions are defendable and can be supported by the available data or directly related past experience
- All critical modelling and interpretations can be verified and reproduced with the available data
- All critical modeling and interpretations can be verified and reproduced with the available data
- Historical injection/production volumes are properly allocated and supported by geotechnical investigation
- Planned injection/production volumes are defendable with typical engineering evaluation techniques (rate and pressure transient analysis, material balance, decline curve analysis, simulation) – a sales pitch based on atypical assumptions and analysis techniques is often an indicator of unnecessary risk
- Booked reserves are reasonable and assigned with a reasonable probability of occurrence
- Risk and uncertainty and adequately captured
- Capital and operating costs are in line with similar projects exhibiting the same unique challenges
- Cash flow is defendable given the results of the geotechnical and engineering due diligence process
- Price sensitivities have been considered to account for changes in market conditions on long-dated