Oil and Gas Valuation

HCS's valuation method is based on the same techniques used by oil and gas companies to estimate their reserves for public reporting.  Yearly participation in continuing education events sponsored by the International Institute of Mineral Appraisers and similar organizations also ensures that our techniques and methods are informed by industry practices.  The process involves the collection of sufficient historic production data from the wells that are producing the royalty payments.  With sufficient data, usually a year or more of monthly royalty statements, the model is fit to the existing data and predicts the future production.  In appropriate cases, the sales prices of recent publicly reported oil and gas transactions are reviewed to help establish the market price of the asset.

Once the production forecast model is developed, the appropriate pricing must be predicted.  To do that, HCS utilizes information provided by the Energy Information Administration of the US Government for historic pricing of oil and natural gas.  For developing the future price forecast, HCS uses the Chicago Mercantile Exchange oil and natural gas futures indexes.  Since these national-level price averages are not reflective of local pricing, HCS adjusts the pricing forecast by comparing the national pricing to the actual pricing reported on the royalty statements.

All valuations are for the purpose of determining the value of the oil and gas rights at a certain point in time.  This is called a 'present value' calculation.  The future income from the oil and gas rights past the effective date of the valuation is determined at the 'present' time of that date.  This is done by appropriately discounting the future income stream by a present value factor.  This factor compounds yearly and makes income that will be received closer to the effective date more important to the value than income that would be received further in the future.

When the modeling and data gathering are completed, HCS will produce a report on the value and the method used to establish that value.  Contained in the report is a concise statement of the value and all of the data and models that were used to arrive at this value.

Hickman Consultants are renowned for their specialized expertise in oil and gas valuation. Our team comprises seasoned professionals who have a deep understanding of the industry, which is essential for accurate and reliable valuations. We stay updated with industry trends, market conditions, and regulatory changes, ensuring that our clients receive the most up-to-date and precise valuations.

Hickman Consultants take a comprehensive approach to oil and gas valuation. We leave no stone unturned in the evaluation process, considering all relevant factors, from reservoir characteristics to market conditions and regulatory compliance. This thorough approach ensures that our clients receive the most accurate and reliable valuations possible.

Hickman Consultants has a proven track record of success in the field of oil and gas valuation. We have served a wide range of clients, from small businesses to multinational corporations, and have consistently delivered results that meet and exceed client expectations. Our satisfied clients are a testament to our commitment to excellence.

The oil and gas industry is subject to a myriad of regulations, and non-compliance can lead to costly legal issues. Hickman Consultants are well-versed in the regulatory landscape, ensuring that their valuations adhere to all relevant laws and standards. This commitment to compliance provides peace of mind to our clients.

Oil and gas valuation is an intricate and indispensable process in the energy and tax sector. Whether you're an investor, a business owner, or an industry professional, understanding the value of these finite resources is crucial for informed decision-making. Accurate valuation not only helps in risk management and financial planning but also ensures compliance with legal standards and regulations.

Hickman Consultants, a leading advisory firm in the United States, stands out as the go-to choice for oil and gas valuation. Our specialized expertise, comprehensive approach, state-of-the-art technology, and proven track record make us the trusted partner for clients seeking precise and reliable valuations. With ourr commitment to excellence and tailored solutions, Hickman Consultants are well-equipped to meet the diverse needs of clients in the ever-evolving oil and gas industry. If you're seeking oil and gas valuation services, hiring Hickman Consultants is a smart move that can make a significant impact on your decision-making and financial success.