Our client, an oil and gas company, is seeking an acquirer for its business, which includes the holding of mineral leases covering 5,860 acres in the Santa Maria Valley, California. The property has been an active producer since the 1950s and hosts a proven recoverable oil reserve of 10.367 million barrels.
EBITDA times a multiple is intended to be the going concern value of the operating assets of the company (often net of working capital related financing), not the value of the shares. To arrive at the value of the shares, we must then deduct non-working capital related debt from the equation.
Range Advisors is soliciting proposals for all or part of the assets and business of the Company, including accounts receivable, inventory of coil tubing, N2 and parts, coil tubing and support units and goodwill. Bids are due April 20, 2015.
A financial model is the most important tool used in the turnaround, restructuring and/or refinancing of a troubled company. Our work with clients almost always requires us to build at least one, sometimes multiple, models.