Crude oil is produced, traded, and consumed worldwide. The quality and characteristics of crude oil vary significantly depending on the producing reservoir and the logistics necessary to economically transport to refining or export facilities. Engineering design specifications for crude oil handling and refining facilities are dependent on the characteristics of the available stream or streams as well as the quality specifications and requirements for the derived products. Blended crude streams do not always have a value equal to the combined value of each source stream, and crude streams of similar quality may differ in value depending on location, available transportation options, as well as overall supply/demand of crude of similar characteristics in economically-accessible market hubs.
Pearson Adair & Co. consultants have direct experience in crude oil and condensate valuation, purchase/sale/transportation contract negotiation, price risk management/hedging strategies, logistics, storage, and pipeline nominations/scheduling. Downstream, we have worked with the development of refining and condensate processing facilities, refined products marketing/storage/distribution, retail product distribution, and specialty produce manufacture and sales. Our knowledge base includes market supply/demand and price information. We are often retained to analyze and assess global, regional, and niche markets to evaluate the impact of potential projects or expected changes likely to impact market drivers, including developments in market logistics due to pipeline, marine terminal or rail capacity changes.
Expert Advisory to Bank Group, Market Analyses/Evaluation/Assessment of Business Plans for Large Integrated Mid-Stream
Retained by Creditor Group to provide market analyses, evaluation, and assessment of crude oil gathering/trading, natural gas processing, natural gas storage, asphalt manufacturing, and liquefied petroleum gas business segments for the SemGroup assets. Work included analysis and assessment of reorganization plans, evaluation of asset market positioning, and assessment of resources required to emerge from bankruptcy. Scope of work included management interviews, participation in creditor group meetings, independent assessment of markets, and determination of potential credit requirements for reorganized business segments.
Crude Oil Truck & Rail Terminal Due Diligence
Performed due diligence review for bank financing of a greenfield crude oil truck and rail terminal in the Bakken area of North Dakota. Commercial review included market assessment, competitive analysis, and review of commercial contracts. Evaluated facility design to ensure capability to meet contractual commitments, conducted site inspection during construction, and evaluated facility design and construction contracts to identify major risks and mitigation provisions.
Evaluation of Crude Oil Gathering Operations
Retained by creditors to evaluate the ongoing operations of a crude oil gathering and marketing company operating in conjunction with a merchant refiner located in the southwestern U.S. Work included the assessment of crude oil gathering pipeline operations, trucking operations, system inventory, contract analysis, and risk management activities. Completed a detailed economic analysis of historic profitability and constructed pro forma analysis of business including new venture opportunities.
Crude Oil Trading and Marketing
Negotiated crude oil purchase/sale/exchange and transportation contracts for WTI and WTS production for major U.S. oil and gas producer. Completed short-term market forecasts for 60,000 barrels per day of crude oil sales in the West Texas market. Collaborated as part of West Texas marketing and supply team to design, execute, and manage monthly risk management and hedging strategy using forward sales and futures/options contracts.
Crude Oil Market Evaluation
Provided a detailed independent assessment of historical and estimated future crude and product supply and demand in PADD IV and PADD II regions of the U.S. relative to the Express Pipeline proposed by Alberta Energy Company Pipelines. The objective of the study was to determine the viability of a new crude pipeline designed to supply Canadian crude oil into U.S. markets.
Crude Oil Metering Dispute
Investigated alleged tampering with crude oil Automatic Custody Transfer volume and quality measuring devices. Reviewed common carrier pipeline tariffs, inspected site, and analyzed measurement data. Determined that the pipeline company had the right to disconnect the offending shipper.
Acquisition of Crude Oil Gathering System
Conducted technical and economic due diligence on behalf of commercial bank in conjunction with the financed acquisition of a crude oil gathering system from a major oil company.