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De-Risk your Acquisitions and Trust your Evaluation Every Time

As a VP of Business Development or manager of A&D, your investment decisions should never be hindered by slow economic evaluations or delayed information aggregation. No matter the number of target acquisitions and drilling locations that you’re evaluating, your time is precious, so you need an efficient way to look at multiple scenarios and work through various economic sensitivities to secure the assets you want and compete with other buyers. It’s crucial to have reliable information at your fingertips to make the best decisions and add value to the bottom line.

Engineering and technical teams are constantly answering a series of questions to support cash flow measurement, communication to shareholders, and to maximize corporate value. Questions, such as: How are you going to replace reserves? Should you prioritize new drills or acquisitions? What makes the most sense to spend money on?

Using reliable and accurate software is your best strategy to de-risk your A&D opportunities and trust your evaluations. But what are the key things that you should look for in your economics calculation tool when you’re under tight deadlines? We’re here to walk through the top three:

 

1. Complement existing assets.
2. Rapidly determine value by increasing evaluation speed.
3. Rely on fully-integrated portfolio management.

 

1. Complement Existing Assets

One of the challenges with A&D is not just understanding what the asset is worth, but what it’s worth to YOU and your company, and how it complements your existing assets. MOSAIC by Quorum Software manages this seamlessly by pulling the potential A&D wells into your existing database to do a full comparison on how these assets might impact your current wells. You can see how a new drilling program affects your cash flow, understand if you have the capital to support new drills, determine if the acquisition changes your hedging program, and quickly calculate the NPV value of your company with and without the acquisition – all in one integrated system.

MOSAIC helps technical teams stay nimble and focused on value - without looking at 100+ deals in detail, by completing first-pass evaluations on acquisition targets in just a few minutes. We have quick import, auto decline, and mass edit capabilities that layer right on top of your current base so that you can easily see the full picture of future impact.

2. Rapidly Determine Value by Increasing Evaluation Speed

The A&D world can be somewhat spontaneous, yet very time sensitive. We’ve had many clients who had to deal with new A&D packages landing on a Friday afternoon. Typically, an NDA is already signed and you need to get a first pass evaluation done by the end of the day. MOSAIC is setup to update production history on the fly, easily bulk edit other inputs, and run global sensitivities on Price, OPEX, Capital, and Volumes. You can run through this evaluation and scenarios in minutes, and still enjoy your weekend as planned.

Many systems in the market don’t provide the power and flexibility for A&D professionals to quickly evaluate development opportunities and compare results. With MOSAIC, you can use the same wells from your initial evaluation alongside similar wells in the area and pull together a Type Well using a variety of normalization methods – or even honor the work that the reservoir engineering team has generated from engineering applications or simulation models. In just a few clicks, you can quickly generate a view of half-cycle economics for the team to have a first look at what the upside economic potential is.

 

“With MOSAIC, our engineers can spend 70% of their time analyzing data and finding ways to add value. Only 30% of their time is dedicated to data entry.”

—Whitecap Resources

 

3. Rely on Fully-Integrated Portfolio Management

As Jim Haag writes in The Acquisition & Divestiture of the Petroleum Property: A Guide to the Strategies, Processes, and Tactics Used by Successful Companies, buying and selling oil and gas assets is an “inexact science that is approached in a unique fashion by each company.” However, to support a seamless and useful analysis, it’s important to merge data from various groups such as geological, geophysical, engineering, land, legal, marketing, and financial teams to effectively mitigate risk and understand the bigger picture.

Most economics systems in the market don’t offer an intuitive and easy way to streamline functional workflows. With MOSAIC, you can have a faster way to make financial decisions and incorporate cross-functional information to deliver seamless updates to corporate guidance, reserves, and in-year execution plans. All of this can be done by integrating acquired assets into your economics tool to manage portfolio ownership and see the impacts. This helps you deliver consistent and trusted company metrics that you can be confident presenting to your executives and board of directors.

 

“MOSAIC is our one source of truth that helps us capture longer-term prospects, set corporate targets, and monitor progress throughout.”

—Perpetual Energy

 

Conclusion

As a VP of Business Development or Manager of A&D, you are under tremendous pressure to meticulously organize, review, develop, and evaluate vast amounts of information and scenarios to quickly produce decision-ready insights that go from your office to the C-suite and boardroom. You need software that can quickly help you see the full picture of your A&D opportunities, from various data room sources, and get ahead of the competition. MOSAIC gives you the control and flexibility to be better with your evaluations and mitigate risk. Check out our webinar below or contact us for a more personalized demo to suit your specific needs.

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