Pipeline Equities uses twenty factors or criteria for valuating oil, gas and product pipelines. All or some of these will be used on a typical appraisal depending on the circumstance. No two pipelines are alike and broad criteria for appraising petroleum pipeline properties have not proved accurate. We feel the careful and thorough application of the following factors by qualified personnel will yield accurate results that will stand any test.
- Replacement value or cost factor
- Throughput value or income factor
- Value of right of way for pipe or any other use
- Surface inventory including appurtances
- Salvage or removal value
- Potential for future activity
- Interconnect availability with extended carriers
- Markets or demand factor
- Market price of commodity
- Contracts and duration
- Reservoir studies of existing wells
- Maintenance
- Market diversity
- Proximity to markets
- Environmental concerns
- Field Personnel experience
- Geography/Terrain
- Front Office Management
- Condition of pipe, coating, cathodic, etc.
- Comparisons (utilizing the Pipeline Equities M&A Database)
It is important to note that typically in an appraisal type situation, there are not more than four factors determining what is called “fair market value” and these three or four criteria are generally limited to the cost, income, and comparison type factors. For additional information, contact David Howell at 713-623-0690.