Energy
Last updated: April 2008

Industry Codes:
  • NAICS – 213111 Drilling Oil and Gas Wells
  • SIC – 138 Oil & Gas Field Services

Overview

Oil and gas producers recorded record profits in 2007 as the price of crude oil traded at an all time high, driving the price of unleaded gas and diesel fuel to record highs at the pump. Pricing has also been affected by the reduced domestic refinery capacity following the destruction caused by hurricane Katrina. With minimal new U.S. refinery capacity under construction and existing plants operating near capacity, prices are projected to continue to increase.

Industry Condition – Excellent


Mergers & Acquisitions

  • Refinery Sales During 2006

    Seller

    Total Atmospheric Crude Oil Distillation Capacity (bbl/cd)

    Purgeantaresr

    Date of Sale

    Compagnie Nationale a Portefeuille/Astra

    Oil/Pasadena Refining Systems Inc.

    Pasadena, TX

     

     

    100,000

    Petroleo Brasileiro, S.A. (Petrobras)

    9/06

    ConocoPhillips

    Wood River, IL

    Borger, TX

     

    306,000

    146,000

    WRB Refining LLC

    12/06

    Edgington Oil Co

    Long Beach, CA

    33,000

    Alon Israel Oil Co/ Alon USA Energy/Edgington Oil Co

    9/06

    Holly Corp/ Montana Refining

    Great Falls, MT

    9,500

    Connacher Oil & Gas/Montana Refining

    3/06

    Lyondell Chemical Co/Lyondell Citgo Refining

    Houston, TX

     

     

    270,200

    Lyondell Chemical Co/Houston Refining LP

    8/06

    Paramount Petroleum Corp

    Paramount, CA

    Portland, OR

     

    50,000

    0

    Alon Israel Oil Co/ Alon USA Energy/Paramount Petroleum Co

     

    8/06

    Time Oil Co/US Oil & Refining

    Tacoma, WA

     

    37,850

    Compagnie Nationale a Portefeuille/Astra Oil/US Oil & Refining

    3/06

Key Industry Indicators

  • Refinery Utilization
    U.S. refineries operated at 85.04% for the week ending April 25, 2008.
  • Operable Refineries & Capacity
    There are 149 operable refineries in the U.S. with an operable Atmospheric Crude Oil Distillation Capacity of 17,443,492 barrels per calendar day.
  • New Refineries Under Construction
    To date, no new refineries have been built in the U.S. since 1983. However, Arizona Clean Fuels Yuma, LLC is slated to build the first in 25 years. The new refinery will be built by 2012. It took the firm seven years to obtain the permit.

Commodity Tracker

Secondary Market

Overview

High pricing has sparked increased development which has impacted the overall demand for all resources and equipment serving this sector. Overall, used equipment has maintained its value or increased sharply. The demand for used drilling rigs and natural gas compressors is high with prices increasing 20%-50% and 100%, respectively.

Used Equipment Values – Excellent

  • Supply of used equipment – Decreasing
  • Demand for used equipment – Increasing

Liquidation Monitor

Recent Bankruptcy Filings
  • Superior Offshore International, Inc. filed on April 24, 2008
  • Capco Energy, Inc. filed on April 7, 2008
  • Galaxy Energy Corporation filed on March 14, 2008
  • PRB Energy, Inc. filed on March 5, 2008
  • Viking Offshore (USA), Inc. filed on February 29, 2008
  • High Velocity Alternative Energy Corp. filed on February 20, 2008

Factors Influencing Value & Marketability

  • Refineries should be sold as complete processing plants
  • Liquidations of refineries return scrap pricing (without considering environmental liabilities)
  • Oil pricing and the volume of new exploration

Used Equipment Currently in Demand

  • Drilling rigs
  • Natural gas compressors
  • Fracking rigs
  • General demand for anything supporting development

Industry Experience

Valuation Monitor

AccuVal routinely provides appraisal, consulting, and asset management services to the Energy industry, including exploration, production, refining, and delivery. View industries serviced >>

Representative Clients Our Associates Have Served

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Success Stories

Industry Related:
  • Valued Cogeneration Facilities as Stand-Alone Enterprises So They Could be Sold Separately
  • Helped Create Additional Working Capital Availability By Supporting the Independent Value of Hydro Electric Plants That are an Integral Part of Manufacturing Facilities
  • Litigation Support Estimating Diminution of Value in Connection With a Release at an Oil Depot
  • Crisis Consulting and Valuations In Connection with Idle Drilling Rigs and Support Equipment
  • Valuations Supporting Asset Based Loans to the Following Providers:
    • Fossil-Fueled Electricity Generation (E.G., Coal, Natural Gas)
    • Renewable Energy Electricity Generation (E.G., Wind, Solar, Hydro)
    • Cogeneration Electricity
    • Waste-To-Energy Electricity Generation
    • Electricity Transmission And Distribution
    • Natural Gas Gathering, Processing, And Storage
    • Natural Gas Transmission And Distribution
Appraisals In Connection with Matters Involving Federal, State and Local Taxation:
  • Valuation of the Tangible and Certain Intangible Assets of an Independent Oil & Gas Company Engaged in the Exploration, Development, and Acquisition of Properties for Federal Income Tax Planning Purposes
  • Valuation of an International Portfolio of Fossil-Fuel Electric Generation Facilities and Coal Mining Operations for Federal Income Tax Planning Purposes
  • Determination of the Value of Power Plants Under Construction for State Income Tax Planning Purposes, Based on Inter-Company Transfers of the Assets at Given Dates
  • Classification and Valuation of Power Plant Assets for the Support of a "Like-Kind Exchange" Transaction that Provided Federal Tax Benefits in a Transaction Involving Multiple Internal Parties and an External Party
  • Determination of the Prospective Value of New Combined Cycle Gas-Fired Power Plants for the Purpose of Estimating the Annual Ad Valorem Tax Liability Upon Commercial Operation
  • View all Success Stories
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