Baker & O'Brien, Inc.

Services

Service Details

Merger and Acquisition Support

Baker & O’Brien’s due diligence experts often work closely with and advise financial teams on a wide range of technical and economic issues that impact the hydrocarbon processing industries. Our consultants have prepared due diligence reports for transactions involving a wide variety of existing facilities. In addition to acting for equity investors, we also provide support to lending institutions that require an independent assessment of the facilities to secure the loan and operating companies seeking to divest or acquire the assets.

Our expertise in conducting due diligence investigations of existing midstream and downstream assets has typically included some or all of the following activities:

  • Review of hydrocarbon purchase and sale contracts for consistency with commercial norms;
  • Analysis of historical and projected operational and financial data for significant anomalies;
  • Physical inspection of the facilities, operations, and associated records;
  • Competitive review of the facilities within the appropriate markets; and
  • Development of a financial model that translates estimated production volumes, prices, operating expenses, sustaining capital requirements, and an appropriate discount rate into a fair market value.

Related Experience

Related Experience
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.
Pipeline, Pricing
Bankruptcy Reorganization
Developed, in conjunction with senior management, reorganization plans for various operating segments of a major trading and transport company. The resulting business plan formed the foundation of the company's successful reorganization and emergence from bankruptcy.
Operations/Maintenance, Pricing
Business/Technology Valuation
Conducted a due diligence assessment and preliminary economic valuation of an existing business with proprietary technology designed to significantly reduce crude oil exploration and finding costs.
Pricing
Company Reorganization Study
Following the bankruptcy of a major Singapore-based shipyard, with significant oil interests throughout Southeast Asia, worked with the company's lenders to restructure and reorganize the company's asset base. Made visits to all major company sites and prepared report outlining current status. Recommended the disposition of non-core assets and the reorganization of core assets into a smaller and less highly leveraged entity. Following acceptance of most of recommendations by creditors' committee, company was able to successfully emerge from bankruptcy protection.
Waterborne/Marine
Crude Oil Evaluation
Evaluated several processing alternatives and combinations of various refining assets located in the Caribbean and on the U.S. Gulf Coast to process heavy Ecuadorian crude oil production.
Crude Oil Valuation, Product Quality
Crude Oil Pipeline Acquisition
On behalf of an international pipeline company, prepared an assessment of the acquisition of a fifty percent ownership in a pipeline system that transports crude oil from Canada into the U.S. Study included crude oil supply/demand projections for the markets served.
Pipeline, Pricing
Due Diligence of Gas Gathering and Processing Assets
Conducted due diligence on gas gathering and processing assets within the Permian Basin in Southeast New Mexico and West Texas on behalf of lending group and prospective purchaser. Conducted physical inspection of the facilities, reviewed operation and maintenance records, assessed gas supply and competitive position, and reviewed financial assumptions and projections to ensure consistency with current gas supply contracts and asset performance.
Industry Practice/Standard of Care, Operations/Maintenance, Physical Asset Appraisal, Pricing
Ethanol Terminal Blending Facility Evaluation
On behalf of a private equity firm, reviewed a site development plan for a coastal ethanol receiving terminal and associated gasoline blending facility.  Evaluated the market competition for terminalling services within the local area.
Pricing, Product Quality
Evaluation of Refinery Competitive Environment
Assisted in a dispute between a major oil company and the Federal Trade Commission's claims regarding the anti-competitive nature of the company's proposed acquisition of a West Coast-based refining and marketing company. Prepared a detailed report analyzing the West Coast refining industry. Assessed the competitive position of each West Coast refinery processing Alaskan crude oil and how they might respond to changes in crude oil prices and/or availability.
Pricing
Agrochemicals Manufacturing
Performed due diligence for the purchase of several fertilizer plants on behalf of an investor.  These plants manufactured nitrogen fertilizers, phosphate fertilizers, methanol, and other related industrial chemicals.  Inspected company assets, assessed technology, analyzed feedstock and product markets, reviewed contracts, evaluated capital investment programs, and analyzed comparative manufacturing economics.
Fertilizers, Pricing
M&A Dispute
Evaluated the foreseeability of project cost overruns that negatively impacted the economics of the acquisition of an EPC Firm.
EPC-related, Industry Practice/Standard of Care, Operations/Maintenance
Manufacturing Facility and Plant Evaluation
Performed an on-site assessment of a pipe manufacturing facility to determine operational viability. Key assessments made on mechanical integrity and reliability of the process equipment, technical understanding and organizational strength of facility personnel, and related operational issues.
Physical Asset Appraisal, Project Feasibility
Midstream Acquisition Due Diligence
Assisted energy distribution company with due diligence for potential transaction involving gas gathering and processing assets located in the Permian Basin.  Assets evaluated included over 4,000 miles of gas and liquid pipelines, four gas processing plants, and multiple gas treating plants.  Participated in data room reviews and management presentations with a focus on commercial, operational, and technical evaluations of midstream systems.  Developed comprehensive economic model of the integrated gathering and processing assets that was used to determine valuations and evaluate key sensitivities.
Industry Practice/Standard of Care, Operations/Maintenance, Physical Asset Appraisal, Pipeline, Pricing
Natural Gas Pipeline and Processing Plant Due Diligence
Assisted an electric utility in its merger with a gas transmission and distribution company. Inspected pipeline and processing facilities and reviewed natural gas and natural gas liquids supply and marketing issues. Conducted operations review and an analysis of staffing levels.
Physical Asset Appraisal, Pricing
Oil Sands Downstream Integration Venture
Assisted a producer of Canadian oil sands in assessing potential joint venture partners and refinery acquisition targets for processing diluted bitumen in the U.S.  Conducted modeling and analysis of prospective refineries and advised the client on likely capital expenditures required for processing increasing volumes of diluted bitumen.  Performed technical due diligence, assisted with cash flow valuation analysis, and supported negotiations.
Pricing
Refinery Valuation and Due Diligence
Prepared an analysis of refining and marketing assets for a company that was considering acquisition of shares of a refining and marketing business located in South Korea. The analysis included refining and marketing economics, and due diligence of the facilities.
Pricing
Refinery Acquisition Planning
On behalf of an acquisitive client, developed a summary of the U.S. refining business to focus on the supply/demand and competitive forces within the market.  Provided information regarding historical U.S. refinery M&A transactions and a summary of typical due diligence focus items.  Screened several potential acquisition candidates and developed a shortlist of opportunities which appeared to best align with the strategic objectives of the client.
Pricing
Technical Review
Performed technical review of chlor-alkali and calcium chloride processes and project plan on behalf of prospective lender. Reviewed the process design packages for the chlor-alkali and calcium chloride production facilities and provided opinions regarding the selected processes and their technical compatibility. Reviewed the project schedule and cost estimate for the facilities and provided input to the prospective lender regarding the appropriate level of contingency. Evaluated the contracting strategy and project execution plan and provided opinions.
Pricing, Project Feasibility
U.S. Refining and Marketing Strategy
Advised a client on developing strategic options as it relates to future participation in the U.S. refining and marketing sector. Developed scenarios and assessed the medium term outlook for refining and marketing in the U.S. to support client objectives. Prepared short list of potential candidates for acquisition, and developed case studies and recommendations related to post merger integration activities. Advised client on appropriate timing for executing strategic objectives.
PRISM Data or Analysis, Pricing
Refinery Analysis
For a prospective investor, provided analysis and commentary on the relative competitiveness of a targeted refinery, explaining the fundamental basis for its competitive position.
Pricing
Refinery Operations Snapshot
Provided client with an estimate of actual crude runs by grade, product yields, and operating costs for a European refinery in 2007 based on our proprietary PRISM refinery database and simulator.
PRISM Data or Analysis, Pricing
Process Plant Leasehold Settlements
Assessed the market value of residual operating interests held by a major financial entity in several leased chemical processing facilities. Each engagement included an ongoing advisory role pursuant to successful negotiations for sale of the institution's ownership interests.
Pricing
NGL Pipeline Due Diligence
Reviewed data presented by a potential NGL pipeline seller on behalf of a potential buyer. The review focused on mechanical integrity and other safety issues.
Operations/Maintenance, Physical Asset Appraisal, Pipeline
Gas Gathering and Treating Due Diligence
Performed due diligence of West Texas natural gas gathering and treating system. Reviewed contracts and facilities, assessed competition, developed economic model, and estimated market value of assets.
Petroleum Refinery Due Diligence
Prepared a due diligence report on a full conversion refinery, including a review of regional crude oil supply and regional products markets.  Reviewed refinery operations, including high level assessments of refinery safety and environmental performance.  Developed economic model of refinery and estimated market value.
Pricing
Due Diligence of a Lube Re-Refining Facility
Conducted a due diligence analysis of technical and economic features of a lube oil re-refining plant involving a potential acquisition.
Pricing
Gasoline and Diesel Terminal Due Diligence
Performed technical due diligence for terminal assets on behalf of financial firm.  Visited the facilities and reviewed relevant documentation to advise the client on issues concerning the operability, safety, and physical conditions of the facilities and potential future maintenance and capital costs.
Operations/Maintenance, Physical Asset Appraisal, Waterborne/Marine
Refinery Economic Analysis
Prepared due diligence analysis of refinery technical and economic performance to support a potential working capital loan.
Refinery Technical Review
Provided a technical review and forecast of cash flows for a refinery acquisition candidate.
Condensate Gathering System Due Diligence
Assisted client with engineering due diligence on a Texas condensate gathering system focusing on pipeline mechanical integrity issues.
Industry Practice/Standard of Care, Physical Asset Appraisal, Pipeline
PADD 1 Refining Study
Provided a competitiveness analysis of refineries located in U.S. PADD 1, U.S. Virgin Islands, and Eastern Canada. Developed a price forecast and historical supply and demand balance. Provided a competitive ranking of a prospective acquisition of a refinery in the region being considered by the client.
PRISM Data or Analysis, Pricing
Refinery Due Diligence
Assisted financial client with a due diligence study of a European Refinery.  Visited the site and received briefing from refinery management.  Developed cash flow model of historic and projected operations.  Tuned cash flow model to match past four year's of operations and cash flow results.  Developed five year price forecasts for crude oil and refined products in Europe.  Reviewed operating and maintenance expenses.
Operations/Maintenance, Pricing
Crude Oil Pipeline System Due Diligence
Supplemented the client's team performing due diligence as part of a potential transaction regarding a crude oil gathering and mainline pipeline system.  Our focus was on the engineering aspects of new facilities and facilities under construction.  We provided an opinion on whether the new facilities, and the facilities under construction, appeared to be designed to applicable industry specifications.
EPC-related, Operations/Maintenance, Pipeline
Refining and Marketing Privatization
Assisted a state-owned integrated oil company in Central Europe in completing a strategic planning study for its downstream refining and marketing business. The study considered potential markets and pricing for crude oil and refined products. Opportunities to optimize the operation and logistics of the company's refining and marketing system were evaluated in view of maximizing the value of the assets prior to privatization.
LP/Planning Practice, Physical Asset Appraisal
Reorganization of Crude Oil Trading Business
Analyzed crude trading business for potential reorganization.
Project Feasibility, Waterborne/Marine
M&A in the Cement Industry
Performed acquisitions (share and asset) with hands on accountability for economic valuations, financial and market analysis, development of strategic rationale, approval documentation / presentations, deal negotiation, due diligence, legal agreements, and management and integration planning.
Pricing
Privatization of Olefins Plant
Evaluated an olefins plant for competitiveness in operating costs, yields, feed supply, and product marketing. Identified and documented strengths and weaknesses and presented the key initiatives, which would be needed to ensure a successful transaction. Estimated the fair market value.
Operations/Maintenance, Physical Asset Appraisal, Product Quality
Product Terminal and Transmix Processing Valuation
Physical asset appraisal and business valuation of a refined product terminal and transmix processing facility. Estimated the replacement cost and deferred replacement value of the physical assets to provide a depreciation basis for taxes. Valued the business enterprise using a discounted cash flow approach based on an analysis and projection of transmix processing and product terminal activities.
Physical Asset Appraisal
Refinery Valuation and Synergy Analysis
On behalf of two international refining companies, investigated and estimated the potential value of synergies that might be realized upon the combination of the two refineries. Provided indication of value capture, based on criteria provided by companies.
PRISM Data or Analysis
Terminal Acquisition Due Diligence Support
Conducted a review of fuel oil and asphalt terminal assets in support of a potential acquisition. Provided input and recommendations as to the overall quality of the assets, including a review of previous expenditures and maintenance records.
Operations/Maintenance
Refinery Risk Assessment
Assessed the technical and commercial risks inherent in each of several refineries owned by a U.S. refining company.
Product Pipeline Terminal Valuation
Prepared a terminal valuation based on a discounted cash flow analysis of transmix and terminal businesses and an appraisal of the physical assets.
Physical Asset Appraisal, Pipeline
Polypropylene Plant Due Diligence Support
Provided technical due diligence support for a moth-balled polypropylene plant. Evaluated capacity, historical utilization and mechanical availability and other factors.
Operations/Maintenance, Physical Asset Appraisal
Refinery Due Diligence
Evaluated the condition of refining assets for a potential acquisition. Addressed potential "fatal flaws" regarding the acquisition of a topping refinery. Provided support in evaluating the potential cash flow for the refinery.
Refinery Screening and Evaluation
Provided cash flow forecasts and indicative transaction values for select target refineries using PRISM charges and yields and client price forecasts.
PRISM Data or Analysis, Pricing
Natural Gas Midstream Due Diligence
Conducted due diligence on gas gathering assets in East Texas for a prospective purchaser. Inspected facilities, reviewed pipeline and facility construction records, confirmed regulatory status, evaluated pipeline integrity management program, and assessed process safety.
Strategic Review of Refining Portfolio
For a large integrated refiner and marketer, assessed the historical performance of each refinery in the company's system, and evaluated key benchmark metrics against various selected peer groups. Reviewed each refinery's competitive position and highlighted the key factors that differentiated its performance. Quantified the performance gaps on a dollar-per-barrel basis, attributed the gaps to controllable or structural factors, and made recommendations for improving the controllable gaps.
PRISM Data or Analysis, Physical Asset Appraisal
Wyoming Refinery Appraisal
Fair market appraisal of a refinery including connecting crude and products pipelines and storage assets to support debt financing. Project included income valuation with forecast prices, discounted cash flows, and replacement cost estimates for the refinery as well as the pipeline and storage assets.
PRISM Refinery Data
Provided refinery capacity, throughput, product yield, and cash flow estimates for two European refineries in support of preliminary acquisition discussions.
PRISM Data or Analysis
Refinery Acquisition Screening and Valuation
Provided refinery modeling, valuation and M&A support for a client that was considering a refinery acquisition.
Crude Oil Pipeline Due Diligence
Provided technical, commercial, and market due diligence for acquisition of pipeline transportation rights in Latin America. Carried out a technical review of the oil pipeline and pump station facilities. Reviewed the tariff setting mechanism and analyzed key inputs. Developed a tariff model and ran sensitivity scenarios to predict future pipeline tariffs. Carried out regional market study to compare alternate transportation modes (pipeline versus truck) and reviewed forecasts for crude oil production and transportation.
Pipeline
Crude Oil Pipeline System Due Diligence
On behalf of an investment group, provided technical and operational due diligence of an interstate (FERC regulated) crude oil pipeline system. Our focus included the review of asset integrity, design, system capacity, and operating costs of an existing asset and the design, project execution plan, schedule, cost estimate, and projected operating costs of a proposed pipeline.
Commercial Terms Review, EPC-related, Operations/Maintenance, Pipeline
LNG Due Diligence
On behalf of potential offtakers and equity investors of train one, performed a technical due diligence and risk assessment of a two-train liquefaction project, including common use of certain existing regasification facilities.  Work completed during the development phase of the project involved the evaluation of pre-completion risks and post-completion risks, including a review of planned and existing facilities.  CAPEX, contractor capabilities, construction schedule duration, and OPEX were reviewed for appropriateness and risk of overrun.  Subsequent follow-up work included a review of an Open Book Estimate (OBE), a project risk evaluation (reviewed and quantified pre-FID and post-FID cost and schedule risk), and an assessment of the project’s draft environmental impact statement (EIS).  
LNG
Logistics services company assessment
Provided an independent financial and commercial assessment of a logistics services company that our client was considering purchasing.
Condensate Splitter Due Diligence
Conducted asset due diligence activities:  inspected facility under construction; provided market incentives, operating costs, risk overview, and staffing recommendations for successful acquisition of condensate splitter and associated logistics. 
Crude Oil Valuation, Operations/Maintenance, Project Feasibility
Refinery Due Dilgence Assessment
Provided an initial assessment of a Gulf Coast refinery for possible acquisition by the client.  Provided estimated refinery yields and profitability.
Refined Products Terminal Study
To support a client's due diligence efforts for a potential petroleum products terminal acquisition, undertook a market study to evaluate the current refined products supply and demand balance on the U.S. Gulf Coast.  Key market drivers were identified which could impact future market growth.
Terminal Due Diligence
Provided technical due diligence support for a large terminal acquisition opportunity involving approximately 50 terminals, 700 tanks, and 30MMbbls of storage.
Operations/Maintenance, Physical Asset Appraisal, Pipeline, Waterborne/Marine
Condensate Splitter Due Diligence
Conducted asset due diligence activities:  (1) inspected facility under construction; (2) provided market incentives; (3) operating costs; (4) risk overview; and (5) staffing recommendations for successful acquisition of condensate splitter and associated logistics.
Operations/Maintenance, Pricing, Project Feasibility
Condensate Splitter Market Study
Developed market study and economics for a "grassroots" Eagle Ford condensate splitter located in Corpus Christi.  Evaluated alternate locations and presented to CEO and management.  
Crude Oil Valuation, Pricing, Project Feasibility
Potential Refinery Acquisition
On behalf of a prospective buyer, evaluated a Northern European refinery as a potential acquisition target.  Determined the current physical condition of the refinery, its existing processing capability, and the potential for expansion and upgrade.  Developed an economic and financial model that was used by client to prepare its tender offer.
Physical Asset Appraisal
Refinery Due Diligence
Evaluated the condition of refining assets for a potential acquisition.  Addressed any "fatal flaws" regarding acquisition and start-up of topping refinery.  Provided support for evaluating order-of-magnitude costs estimate required to inspect, repair, staff, and start up the complex. 
Operations/Maintenance, Physical Asset Appraisal
Fertilizer Complex Economic Model
Constructed an economic model to analyze the financial performance of a fertilizer complex that produced ammonia and other nitrogen chemicals.  Evaluated expected operations and financial performance subsequent to the completion of an ongoing capital expansion project.  
EPC-related, Operations/Maintenance, Project Feasibility
Refinery Acquisition Assessment
Prepared an initial profitability assessment of two refineries for possible acquisition.  Identified key drivers to profitability and the strengths and weaknesses of each refinery.
Refinery Acquisition Assessment
Provided initial due diligence for a potential refinery acquisition. Evaluated refinery profitability and strengths and weaknesses. Developed forecast for future refinery profitability. 
PRISM Data or Analysis
Refinery Assessment for Acquisition
Developed a cash flow model for valuation of a potential refinery acquisition.  Used PRISM data to estimate the refinery yields and operating costs.  Evaluated several refineries as part of acquiring the entire refining assets.
Pricing
Refiner Acquisition Study
Developed cash flow models of a U.S. refiner for a client interested in a potential acquisition.  Developed a price forecast and cash flow model for each refinery under consideration.  Utilized PRISM and publicly available data to model the charge and yield and economic performance of each refinery.  Cash flow models were used for valuation of the potential acquisition.
Pricing
Refinery Acquisition Study
Developed a cash flow model of a U.S. refinery for a client interested in a potential acquisition.  Utilized PRISM and publicly available data to model the charge and yield and economic performance of the refinery.  Cash flow model was used for valuation of the potential acquisition.
Pricing
Oil Company Due Diligence
Retained to visit data room and prepare due diligence report summarizing facilities and environmental information for multiple oil fields and an oil processing and export terminal. 
Industry Practice/Standard of Care, Physical Asset Appraisal
Terminal Due Diligence
Performed a technical due diligence of a Gulf Coast refinery tank farm and associated transfer pipelines for a prospective investor.  Reviewed inspection and maintenance records of the assets during a site visit.  Reviewed numerous operating performance documents from a data room.  Prepared a technical due diligence report outlining our findings.
Operations/Maintenance, Physical Asset Appraisal
St James Louisiana Crude Supply Study
Analyzed crude supply sources and pipeline flows for the Southern Louisiana refining market in conjunction with a potential pipeline acquisition.  Forecasted crude supply availability by grade in the St. James trading hub and analyzed impact of new crude oil pipelines in the market.
PRISM Data or Analysis
California Terminal Due Diligence
Assisted midstream buyer with valuation of a large Northern California petroleum terminal.  Delivered market study presentation to company management to assist in due diligence and valuation using market metrics.
Physical Asset Appraisal