Valuation of Permian-based E&P Incentive Units for Tax Purposes

October 2021

TOP prepared a valuation analysis to estimate the fair market value of certain incentive units related to a Permian-based exploration and production company. The oil and gas interests were primarily located in the Delaware basin and contributed to a total enterprise value of approximately $150.0 million. Our analysis included the valuation of the company’s reserves, the allocation of the company’s equity value to its various equity classes using a Monte Carlo simulation analysis, and a comprehensive discounts study. The company used our fair market value estimates as the basis for an IRC Section 83(b) election related to certain equity/incentive unit grants.

About Tall Oaks Partners

Based in Houston, TX, Tall Oaks Partners provides valuation and financial advisory services to corporate management of public and private companies, investment and fund managers, and stakeholders in businesses of a variety of scale. The Tall Oaks Partners team has significant experience assisting clients with a multitude of valuation matters for strategic, tax, and financial reporting purposes. Our services and deliverables are tailored to client needs and prevailing industry and economic trends.

 

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