Corporate Valuation, Oil & Gas

August 20, 2020

Mineral Aggregator Valuation Multiples Analysis

Market Data as of August 14, 2020

As shown in the report, mineral aggregators’ stock prices have declined substantially over the past twelve months, but have rebounded from lows seen earlier in the year.  The perfect storm of reduced asset values, record-low IRS rates, and the prospect of significant tax law changes early next year make this the ideal time to think about estate planning and tax-efficient ways to transfer assets to the next generation.  With asset values trending upwards, vaccine candidates progressing rapidly, and political polling suggesting a high probability of a regime change in November, this perfect storm may not last long.  Take advantage by taking action.  In the current environment, there is little to gain by procrastinating, but potentially a lot to lose.  We’re here to help with any valuation needs you have in this unique environment. Download our report below.

Mercer Capital has its finger on the pulse of the minerals market.  An important trend has been the rise of mineral aggregators, which have largely supplanted the trusts as the primary method of publicly traded minerals ownership.

Due to a variety of corporate structures (including master limited partnerships and Up-Cs) and complex capital structures (including preferred equity and non-traded common units), mineral aggregator enterprise values pulled from databases are often missing meaningful components of value, leading to skewed valuation multiples.

Mercer Capital has thoughtfully analyzed the corporate and capital structures of the publicly traded mineral aggregators to derive meaningful indications of enterprise value.  We have also calculated valuation multiples based on a variety of metrics, including distributions and reserves, as well as earnings and production on both a historical and forward-looking basis.

 

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Mineral Aggregator Valuation Multiples

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