Word To The Wise: Navigating the Data Maze – Unveiling Key Metrics for Strategic Deal Evaluation in Today’s Market

January 2, 2024

In a landscape teeming with data, the pivotal question on everyone’s mind remains: “Which data holds the key to unlocking the best opportunities for our company?” The world of deals is evolving – gone are the days of “napkin drawing & handshake deals”. Companies operate leaner, navigating a terrain marked by governmental involvement and heightened stakeholder expectations around net zero emissions and retirement obligations. Financial institutions are exercising caution and exploration companies are focused on balancing debt obligations while providing dividend value to shareholders. Accessing capital remains a global challenge, and every deal undergoes intense scrutiny.

Wasting time on unsuitable ventures is a luxury no company can afford. Everyone knows that there is a plethora of data available, but the challenge lies not just in accessing abundant data but in organizing, interpreting, and leveraging it effectively to make informed decisions. How do you make sure that you’re able to maximize your time and be effective and efficient when analyzing deals? 

The crux lies in analyzing all available data comprehensively. Changes by the AER & BCOGC mandate an examination of historical performance to forecast future performance, and access to historical information is critical for full analysis. Key questions arise in the evaluation process: 

1. Is the property part of a larger corporate portfolio, and how crucial is it to the company’s core operations?
2. Who are the partners and stakeholders involved, and what reputation do they hold in their respective industries? Are there external stakeholders such as First Nations or Freehold owners?
3. Does the property align with our company’s strategic focus and expertise?
4. What is the property’s production history, potential for growth, and environmental impact?
5. How might this deal influence our standing in the industry and affect future government evaluations and licensing?

To effectively address crucial inquiries, a diverse range of datasets is necessary.  Prior to delving deep into meticulous due diligence within a data room, aggregating this information is invaluable.  This preliminary step aids in the early detection of potential red flags streamlining the process by eliminating unsuitable deals.   It allows you to use your time more effectively to focus on those opportunities which are in your company’s best interests. Integrating all pieces of the puzzle into a single document or workflow allows you the ability to make the best possible decision based on full facts, rather than speculation or possibilities, while doing so efficiently.    

By having access to all the data in one place, such as XI’s AssetSuite, you can quickly answer those important questions. You can easily differentiate between core and non-core properties. Utilize our synergy search to identify all working interest partners. Analyze production and potential for growth. Look at the environmental impacts and calculate the liabilities of a deal.  

AssetSuite enables the rapid generation of a proforma summary, even in instances where information isn’t readily available. Using AssetSuite allows you to compare opportunities with the same lens, rather than relying on disparate information provided by various sellers such as declines, reserves, liability estimates.  

Figure 1: Company search in AssetBook with Well, Land, Facility and Pipeline data compiled 

XI’s A&D Workflow Case Study is an example of using a centralized dataset to streamline workflows. In this case study, a Company evaluated Repsol Energy, but faced challenges in compiling information from public sources. They initially overlooked non-operated production and had discrepancies in working interest well lists. They generated a more accurate list using XI’s AssetBook algorithms. Comparing AssetBook’s results to their manual assessment showed improved accuracy in production profiles, remaining reserves, and estimating asset retirement obligations (ARO). ARO Manager provided more precise liability calculations than their manual process, which significantly underestimated liabilities. Streamlining with AssetBook and ARO Manager aided in discovering acquisition opportunities. 

Download this A&D Workflow case study here. 

For more insight on navigating the data maze for strategic deal evaluation in today’s market, contact us at [email protected] or visit our website.

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