TOP was engaged by a midstream oil and gas industry MLP with an estimated enterprise value in excess of $4.5 billion to prepare a purchase price allocation in relation to the acquisition of a midstream oil and gas produced water management business with operations in the Permian Basin. The base purchase price for the acquisition was approximately $225.0 million.

Our analysis included estimates of the fair value of acquired personal property, real property, rights-of-way, customer relationships, and a favorable long-term energy supply contract. The personal property assets in our scope included gathering system pipelines and associated equipment, processing facilities and equipment, storage tanks, wastewater disposal wells, vehicles, office equipment, and software. The personal property assets were valued using a combination of the indirect and direct methods of the cost approach. The real property assets in our scope included four parcels of land in Texas that were valued using the sales comparison approach. The acquired company's rights-of-way were also valued using a form of the sales comparison approach. Customer relationships were valued using the multi-period excess earnings method under the income approach and the favorable energy supply contract was valued using the differential method of the income approach.

As part of the services, TOP also assisted the client with certain estimates related to incremental borrowing rates (IBR), credit adjusted risk-free rates (CARFR), and other inputs related to the assumed asset retirement obligations (ARO).

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