Seamless support for potential oil and gas acquisition

An international, multi-disciplinary team from Moore Stephens recently advised an emerging oil and gas company on a potential business acquisition, providing a complex mix of modelling, due diligence and tax expertise.

Moore Stephens’ client was considering acquiring a business from a major North Sea oil and natural gas exploration and production company, with an enterprise value of US$500 million. It needed a range of advisory and due diligence services, and turned to Moore Stephens for help.

“We formed a team of experienced professionals from multiple service lines with expertise in financial modelling, due diligence, taxation and investment appraisal techniques,” says Moore Stephens partner, Mike Simms. The project team also had a strong international flavour, drawing on the expertise of partners and directors at Moore Stephens London and Moore Stephens’ firms in the Netherlands and Malta.

Assessing the future potential of the target business formed an important part of the assignment. “We prepared a comprehensive financial model and bid valuation model, appraising the prospective target company’s future operations under a series of scenarios assuming different forecast oil and gas production levels,” Mike says. “Our assessment included an analysis of free cash flows, discounted cash flows and net present value calculations, weighted average cost of capital and enterprise value computations.”

The Moore Stephens team also prepared a financial and tax due diligence report on the target company’s operations based on a virtual data room provided by the target company’s advisers. “We drew upon our corporate finance, speciality energy and tax teams to provide due diligence services to help our client validate the key assertions on which the proposed acquisition was to be based,” Mike says. “Our London office is a centre of excellence for due diligence and investment appraisal on complex projects such as this, so the tight timetable was not a problem. Our team worked seamlessly across global locations to deliver a completed report within four weeks.”

Moore Stephens also provided project management support to the financial lead adviser, and worked with external lawyers and consultants to ensure all client needs were met. “We took a lead role in delivering all services and reports to our client,” Mike notes. “Our advice was delivered in formal reports, conference calls and written feedback on complex areas of financial advice and tax considerations.”

For advice on how Moore Stephens can help your business, please contact us.


Michael Simms

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