Business evaluation in the Oil and Gas sector
Our client is a Russian Oil company with interests abroad. Their operations cover upstream exploration and downstream refining, marketing and retailing.
They were interested in expanding their downstream operations into Greece. A potential acquisition in the form of an independent Oil Company with a retail network, supported by storage depots and head office.
Our client asked us to value the business for them.
Key Project Activities
We undertook the following activities and valuation technics:
- Asset valuation. We appointed a local asset valuer in Greece to undertake an independent valuation of the land and buildings on an “in use” and “alternate use” basis.
- Market valuation. We looked at similar listed Oil/Gas companies in Greece and developed a valuation range based on similar business characteristics.
- Free cash flow valuation. We took the free cash flow analysis provided by the target companies advisers and critiqued the methodological approach. The key areas for critique were the discount factor used and the assumptions employed.
The above analysis provided a valuation range. We went onto augment this with an industry analysis and market fit for their business.
The benefits included:-
- Independent valuation range for negotiation
- Critique of the clients valuation model