Making Informed Decisions: Oil And Gas Transactions Services

In order to help you keep ahead of the fast moving oil

and gas M&A environment we have tailored an independent and

robust due diligence service to provide you with an industry

focused key issues report early in the transaction process. It will

focus on identifying key value drivers of a proposed acquisition to

allow the Board to make a fully informed decision.

Our oil and gas team specialises in upstream M&A and

capital markets and offers a truly differentiated service to

deliver maximum value to your decision making process.

We enclose our team contact details and look forward to

developing our relationship with you in the future.

CURRENT UPSTREAM OIL AND GAS M&A

CLIMATE

Introduction

The last couple of months have witnessed a step-change in the

oil and gas M&A climate. With the oil price dropping by over

60% and share prices of oil and gas companies significantly

declining, there has been a noted increase in the number of

acquisitions with rumours of new bids arriving on a regular basis.

The table below outlines recent transaction activity.

Impact Of Recent Oil Price Reductions On Share Prices

Commentators have stated that the market capitalisation of a

number of companies has fallen by such a degree that they are

trading at a steep discount to their risked NAV. This position,

combined with the following factors has resulted in a climate in

which well funded companies are seeking to extend their asset

portfolio through corporate acquisitions.

TAILORED OFFERING TO ASSIST THE M&A DECISION MAKING

PROCESS

Introduction

The current M&A environment has spurred the directors of

independent oil and gas companies into considering a number of

options that could maximise shareholder value. In assessing these

options the directors are often required to base decisions on

limited, publically available information in a constrained

timeframe.

Deloitte has developed a tailored due diligence service which

generates specific oil and gas industry related key issues in a

concise report format, so as to assist the directors in assessing

potential transactions. It is anticipated that this report would be

produced in c.2-3 weeks to enable the directors to react to current

market conditions in a timely manner.

Value Drivers

There are a number of key differentiating factors that

distinguish our service from the capabilities of the internal

resources of the company or other diligence providers:

Deloitte's Petroleum Services Group have the ability to

generate comprehensive reports focused on oil and gas activity at a

field, block, company and regulatory environment level;

Deloitte's geographical spread and extensive resources can

be mobilised at very short notice to react to your needs;

we have expertise in assessing the operational and financial

impact of environmental issues and decommissioning

liabilities;

we have a financial due diligence team exclusively focused on

the oil and gas market; and

the product delivered will be an integrated, concise report

customised for each client to better inform the directors prior to

the investment decision making process.

FOCUSED LICENCE BLOCK ANALYSIS

Introduction

The licence block analysis section will be led by Deloitte's

Petroleum Service Group ('PSG'). This group includes

geologists, geoscientist, petroleum engineers and IT (esp.

Geographic Information System) specialists and has been serving

clients for over 30 years. PSG has a global presence in the oil and

gas industry continuously collecting and analysing up to date asset

information.

Example

The PSG provides information to answer client needs such as:

we require reserve and production data for 5 specific

Malaysian fields...

can you provide a review of an upstream company's

global assets by licence and field...

we would like a map for an Egyptian basin detailing the

block boundaries and field outlines.

Value Of Licence Block Analysis Section

PSI detailed knowledge and experience provides unique insights

into M&A and deal activity.

Data from this section will assist the company in further

refining its valuation model.

A focused overview of technical aspects of assets would further

inform directors on benefits/risks of target.

PSG maintains a global database...