BACKGROUND

On numerous occasions Rystad Energy has supported clients in their legal proceedings, in which disagreements over the correct value of assets have been the root cause. Rystad Energy has been asked to prepare and document an expected market value assessment of relevant assets at the relevant point in time.

APPROACH

Rystad Energy has a systematic approach when performing market value assessments in retrospect. Reconstruction of historic information flow from assets and/or companies as well as assessment of the historic market situation at the relevant point in time are important elements. Further, information review, judgment of assumptions made and valuations performed by others, and transaction reviews are other key activities. Our own set of scenarios and input assumptions is established and run through our own proprietary DCF valuation models. To move from different scenarios and sensitivities to one expected market value is a qualitative process in which our own best judgment must be applied. The picture to the right illustrates the movement from a “Base Value” from a DCF analysis with base case assumptions to the concluded “Expected Market Value” on one assignment.

RESULT

Legal proceedings require high quality documentation of approach, input assumptions, and end-results as well as simple high level messages. A key issue is to combine the comprehensive, detailed documentation requirements with high level, effective and reliable communication as expert witness in court when presenting and defending the work. Rystad Energy has extensive experience and a long track record in valuation and legal support.

Illustration of Rystad Energy's Approach to Set Expected Market Value (EMV) of an Asset