Outlook for mote deal-making, natural gas assets turning positive

摘要

Bridging the gap between buyer and seller and understanding market signals are the keys to a successful deal, industry executives said at Oil and Gas Investor and A&D Watch's 10th Annual A&D Strategies and Opportunities conference, held recently in Dallas. The outlook for natural gas, and opportunities arising from lease expirations, are trends worth watching, they said. Ken Olive, chairman and chief executive officer of The Oil and Gas Asset Clearinghouse, discussed the negotiation process. "The fact that we have seen quite a number of transaction closings in the last seven months or so is indicative that the value gap is not that great at the present time," he said. Gaps in valuation occur when price expectations diverge from what is believed to be fair. Current market conditions generally place a ceiling on value at two times proved developed producing (PDP) assets, unless the buyer sees the asset as a strategic fit. Buyers should look at fit and consider how they could enhance production or reduce cost,rather than simply relying on what is reported in the data room.