Initial investors in exploration-focused oil and gas or oil service companies may want to divest their interests to long-term industrial or financial investors, once these companies have established themselves in the market with a robust portfolio and/or turn-over.
Together with the client, Rystad Energy establishes a list of possible buyers of such interests by means of an analysis of prospective buyers’ strategic goals, current portfolio and geographical focus. On this basis, a prospectus showing the opportunity is presented to a discreet number of companies, which are then asked to express interest before further information is. Once a Confidentiality Agreement has been signed, Rystad Energy presents the opportunity in full detail and administers the Due Diligence process including data room visits. Once the preferred buyer is identified, Rystad Energy joins the client’s negotiation team and supports the negotiations with industry insight, numerical analysis and portfolio/market assessments.
Rystad Energy provides independent assessments and valuation of companies and the underlying shares. Included in such analysis are projections of free cash flow forming the basis for value of the company in question. Once this is derived, benchmarking against historical deals is undertaken involving similar types of companies and resulting in expected market value (EMV) of the divestment object. A successful outcome of a divestment process is ensured through a robust bottom-up market value assessment combined with an aligned view between buyer and seller of the divested company’s projected future.