AssetBook’s Liability Analysis (LLR)
AssetBook LLR is the most reliable and recognized way to easily calculate and analyze the LLR for a company, a group of assets, or an individual well or facility. It’s also an ideal way to gauge the fitness of existing potential joint venture partners, or to analyze the LLR impact of a pending asset transaction on all involved parties.
LLR – the ratio of an operator’s (licensee’s) deemed asset value to deemed liabilities – is a critical first step in de-risking any A&D transaction or joint-venture partnership arrangement. Maintaining an LLR of 2.0 or higher can help to avoid regulatory roadblocks such as delayed license transfers and expensive security bonds.
XI’s AssetBook LLR module handles LLR calculations for Alberta, British Columbia, and Saskatchewan, so one tool helps you stay on top of liability management requirements across your portfolio.
- Assess liability associated with A&D transactions
- Understand liability risks associated with partners
- Identify LLR optimization opportunities within any portfolio or asset group
- Run sensitivity analysis on assumptions to determine risk mitigation
- Identify opportunities for bond rebates
- Use LLR effect as a negotiating tactic in deals
What’s the Opportunity?
When considering A&D opportunities, companies with high LLR assets are in a stronger position to negotiate deals or farm-in agreements.
Some companies will be forced to divest low LMR assets to improve their overall LLR, giving companies with capital an advantage when picking up new assets. High LLR assets will become even more attractive in the marketplace.
Financial institutions, who had previously limited access to LLR information, now have the ability to run their own Liability Analysis reports.
Appreciated the information and ideas brought up in the discussion about the new LLR module. XI has a very powerful tool and the staff has always been supportive of getting answers to questions in a timely basis. The LLR and LMR are critical elements that need to be understood in detail when considering any acquisition of Assets. Your tools help us quickly determine whether an asset is worth pursuing at an early stage of the process. Keep up the good work.