Estimating Fair Market Value of Nigerian Petroleum Assets: A Risk-Based Approach
Article from: OGEL 4 (2021), in Economic and Commercial Context for Oil, Gas and Energy Law
Abstract
Many independent Nigerian oil & gas companies have emerged over the last decade out of divestments of ageing petroleum assets by multinational oil companies. These transactions are marked by pervasive cases of overvaluation and huge gaps in offers that lead to unnecessarily high acquisition costs. Petroleum analysts around the world adopt the Discounted Cashflow Analysis (DCF) method in estimating present value of future oil production revenues. Unfortunately, project economics using the conventional DCF evaluation does not de-risk the reserves components appropriately or ...