Valuation of Midstream Company Legal Entities for Tax Planning Purposes

November 2022
TOP was engaged by a midstream oil and gas terminal and pipeline operator with an estimated enterprise value in excess of $5.0 billion to estimate the fair market value of two operating entities and their property, plant, and equipment.  The valuations were prepared for tax planning purposes.

One legal entity consisted of a chemicals and refined petroleum products terminalling and storage business located in Washington state.  Given the nature of the entity’s operations and assets, a cost approach was used as part of the analysis.  The entity’s assets consisted primarily of storage facility and transportation equipment personal property.  A combination of the direct and indirect methods of the cost approach was used to value the assets.

A second legal entity consisted of refined products storage and distribution terminal operations in Washington state and California.  Our analysis incorporated the income, market, and cost approaches to estimate the fair market value of the entity and its property, plant, and equipment.  The entity’s personal property assets included storage tanks and associated assets; computers and software; and other furniture, fixtures, and equipment.  A combination of the direct and indirect methods of the cost approach was used to value the personal property assets.  The entity’s real property assets included owned land, improvements, and ancillary buildings.  Owned land and improvements were valued using the sales comparison method (market approach).  Ancillary building structures were included in the indirect cost approach analysis.

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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