Every right of way appraiser in the country appraises the value of a right of way based on acquisition or relocation methods… very few, appraise the value of a pipeline within that right of way.
Pipeline Equities saw the need to find a method of appraisal to value pipelines that may have been overvalued after time for tax purposes or undervalued in terms of a merger, acquisition or estate settlement.
These are the basic reasons for a valuation report on an active or inactive pipeline:
To come to a value, Pipeline Equities uses the methods of market analysis, income approach and asset based. Each can be employed if the occasion calls or a combination of all can be used. We have found that value occurs with the interaction of demand for product, utility of product, scarcity or supply, and transferability of ownership rights.
Going deeper, we use as many as forty different factors to make our determinations. These factors are the more technical aspects pertaining to those broader areas of demand, utility, scarcity, and transferability.
Other factors depending on whether product is purchased at the wellhead and resold, whether and to what extent product is compressed, enhanced, treated, cleaned or processed and in what way.
Over the years, Pipeline Equities has had a diverse list of clients who sought pipeline valuations for reasons such as:
The appraisal of pipeline is a niche industry – overshadowed by those who are appraisers of right of way for the purpose of paying damages to landowner or acquiring new right of way. The methods are different. One is the way a land appraiser looks at land the other is the way a pipeliner looks at a pipeline and the right of way it rests in.
Pipeline Equities uses a combination of appraisal methods, but centers on those that particularly lend themselves most readily to the oil and gas pipeline industry. We always take into account the perspective of the pipeline operator, whether trunk, transmission or gatherer.
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