Acquisition Due Diligence – Offshore Gas Field

Overview

An international investment bank contacted RISC to conduct due diligence on the subsurface performance of an offshore gas field that had recently started production. The field had a long pipeline to shore and a dedicated gas plant. The seller was a super-major operator.

Our approach

The RISC team started with a brief audit of the seller’s geological model and dynamic simulation model. We concluded that the range of gas volume in place was well understood, but the dynamic simulation did not correctly model the downside case of water influx.

Using independent technical work and RISC’s extensive analogue database, RISC created profiles of gas and water production and integrated the work with our client’s facilities staff.

During the lengthy sales negotiation process, RISC updated its models and forecasts as more production data was acquired by the operator. This gave our client more confidence every month the field performed in line with RISC’s base forecast.

RISC identified several risks related to the subsurface, subsea and facilities assets, which the seller had not yet mitigated, due to their focus on the recent startup and early-stage operations support.

Outcome

Our client used RISC’s knowledge of the asset to provide confidence to each of the bank’s co-funders in their bid, gaining agreement on RISC’s views of forecasts and risks.

The client’s entire bid consortium had increased confidence to pursue a high-quality bid, and invested further time in the supporting financial, marketing and downstream agreements.

The client said “RISC delivered an outstanding piece of work within a tight timeframe. They went above and beyond and made a real difference to the transaction.”