This evaluation quantified the valuation potential of an African oil holdings by benchmarking global M&A transaction data for oil sands and other development-stage fields. ADI analyzed the economic trade-offs between as-is asset sales and value-added farm-out scenarios involving significant drilling investments over a three-year horizon. The findings addressed infrastructure limitations and contingent resource uncertainty within the context of African regional risk premiums.
The client
Private equity firm
The situation
A need to establish defensible valuation estimates for contingent resources to support shareholder investment or farm-out decisions.
ADI’s contributions
Peer transaction benchmarking
Screening of over 1,100 global oil and gas transactions provided a robust dataset of comparable regional and asset-class deals.
Farm-out scenario modeling
Analysis of equity distribution between current shareholders and new investors established clear valuation implications for funding.
Resource-based economics
Commercial valuation included a contingent resource estimate with regional price-per-BOE benchmarks.
Regional risk assessment
Comparisons between African development-stage fields and Canadian oil sands identified appropriate valuation ranges for the asset type.
Key outcomes
- Factual basis for negotiating farm-out equity splits and a clear prioritization of high-value acreage for initial drilling.
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