Valuing Oil & Gas Assets A Perspective for M&A

How do you value assets ?
“There are many ways to value assets and all are accurate even if they give different results” - Christopher Kise (Trump’s Lawyer) in response to the claim that the ex-president inflated the values of his property empire
What is fair market value ?
What is your estimate of the true value ?
How do we arrive at these estimate ?
What would be a reasonable price when estimating the value of an oil and gas deal?

[@TROVE-1stSubsurface]

Great summary Alan. In your hypothetical Swanson's Rule slide its a bit scary your Swanson Mean ($308mm) is significantly higher than your mid case ($261mm). I wouldn't recommend this method for justifying a bid. 😂😂 "Averages" are typically overly-influenced by big numbers.

[@AlanFoumGeophysicist]

Mike - using Swanson's rule takes both high and low cases into account which I believe is necessary - the tricky bit as you say is choosing appropriate high and low values for the estimation - a high case which is too high will as you say skew the result upwards a probabilistic / Monte-Carlo approach may be better
- I do feel that using a single number from a best /most likely case will also have its flaws as it does not take uncertainty into account , however many managers do like a single number