How We Value
Every evaluation of an oil and gas interest that we conduct takes into account a multitude of factors. Some of these factors are:
- Historical Production
- Reservoir Analysis
- Operator Reputation
- Commodity Price Risk
- Future Drilling Potential
Our evaluation process first starts with historical production. Our computer servers contain massive amounts of historical production data for wells from across the country. Every oil and gas well has a rate of decline that we analyze and extrapolate into the future using sophisticated oil & gas engineering. For non-producing interests we evaluate the likelihood and timing of future development and then apply our type curve analysis to project future production and cash flow.
Operator reputation is also very important to us. Many operators are more efficient and experienced than others, and can consistently produce stable results. We also find royalties with future drilling potential attractive as well. The risk of large commodity price swings is also taken into account in all of our evaluations.