Abstract: Case History Evaluation of a Producing Property and Its Impact on Evolving Evaluations and Sales

George C. Hite

An oil and gas company should be able to do a better job of managing its business by reviewing the factors which affect the value of its assets. The traditional factors affecting property values are the remaining reserves and economic parameters needed to physically model the projected net cash flow stream.

These factors are not sufficient to assess the full potential of a property. The missing ingredients include ownership, competition, geologic complexity, technology and communication. The most important of these is ownership and where on the owner's 80120 plot the property falls. A core property for one company might be ignored by another due to the existence of more attractive opportunities.

The message is that substantial value can be created by changing the way oil and gas properties are owned, managed and exploited. Utilization of third parties to conduct technical evaluations and manage properties with hidden potential is a valuable way to increase profitability of current assets with essentially no risk.

AAPG Search and Discovery Article #90951©1996 AAPG International Conference and Exhibition, Caracas, Venezuela