A quality data room is key to any successful oil and gas asset divestment or project farm-out. Potential buyers or partners make their decision whether to make an offer based on the information made available to them. It also influences their offer size and quality. Therefore, it is important to prepare an easy-to-navigate and buyer-friendly data room. In this article, we’ll provide tips on how to prepare the content and structure of a data room for an oil and gas asset divestment or project farm-out.
General Data Room Content and Structure Tips
- It is well worth putting in the effort up front to create a well-structured and organised data room. This will avoid your exploration manager or advisor answering avoidable questions such as, “where can I find the 2015 seismic survey report?” as it should be self-explanatory. A well-organised data room is also a reflection on the seller and the asset quality. This is especially important when farming out as the farminee will be assessing equally their potential partner and the project.
- Organise the folder structure to ensure prospective buyers can easily navigate to find what they are seeking.
- Rename folders and files so that prospective buyers can easily recognise what it contains without having to open it, e.g. ‘pphys_int4823’ is renamed to ‘Petrophysical Interpretation of Well-1’.
- Include the year the report or study was performed in the file name e.g. ‘2017 Petrophysical Interpretation of Well-1’.
- Where possible, save files as PDFs with the desired security settings rather than in the unprotected native format (.docx, .pptx, etc).
- Ensure all the images, diagrams and maps are of high quality and legible.
- Be careful not to provide too much data or documents so as to crowd out the key documents. Carefully select which reports and data are uploaded to the data room. If necessary, phase the data release, limiting the first release to the key technical, commercial and legal documents and subsequently release the more peripheral data later. An alternative is to upload a list of available data which can be made available upon request.
- Another reason to consider phasing your data room is to align it with your sale process. For example, if you are holding a two-phase sale process (Phase 1 – indicative offers and Phase 2 – final offers), initially release the key data to allow for indicative bids and subsequently upload the next level of data required by parties to make their final binding offers.
- Be responsive when a buyer/investor requests additional data and consider uploading it to a separate folder titled, ‘New Data’ with a separate dated folder for each new upload. This makes any new information easily identifiable for those parties active in the data room.
- Due to confidentiality reasons if you have to host a physical data room, host as much as possible in the virtual data room and avoid duplication as much as possible.
Data Room Structure
Below is a proposed data room structure. It is general in nature and while is it not comprehensive or applicable for all sale or farm-out process, it is a good initial starting point.
- Key Farm-out/Sale Documents
- Flyer
- Management Presentation
- Information Memorandum
- Oil and Gas Permits/Licences/PSCs
- Summary table of all project permits including ownership, commitments, royalties, expiry dates, commitment years, etc.
- Permits/Licences/PSCs
- Suspensions, Extensions and Variations
- Annual Reports
- Regulator Communications
- Maps
- Permits (current graticular blocks)
- Bathymetry
- Project map
- Regional infrastructure map
- Legal & Agreements
- Joint Venture Agreements
- Joint Operating Agreements
- Royalty Agreements
- Unitisation Agreement
- Indigenous Land Use Agreements
- Key Supplier/Contractor Agreements
- Seismic
- Drilling
- Construction (EPC, EPCM, Build Own Operate, etc)
- Operations
- Oil and Gas Processing Agreements
- Pipeline Agreements
- Gas Transportation Agreements
- Oil and Gas Sales Agreement
- Joint Marketing Agreement
- Third Party Access Agreements
- Financial
- Financial Model
- Financial Model supporting information and assumptions (e.g. tax/fiscal regime, royalties, production sharing, etc)
- Financial Capability Evidence
- Project Financing Instruments
- Liabilities/Debt
- Wells
- Past Wells
- Overview
- Wells summary table covering key info such as drill date, well status, well location, drill depth, well type, production to date and current production rate.
- Wells map
- Exploration Wells
- Well completion reports
- Well logs
- Drill stem tests
- Core data & analysis
- Drilling reports
- Appraisal Wells
- Flow tests
- Development / Production Wells
- Offset/Nearby Wells
- Overview
- Future Wells
- Well plans and designs
- Well cost estimates
- Past Wells
- Resource & Reserves
- Independent Reserves Certification Reports
- Reserves Estimates
- Volumetric Potential
- Resources Estimation
- Resource Maps
- Production
- Production History
- Data to date by well
- Commentary
- Production Forecasts
- Production History
- Petroleum Geology and Mineralisation
- Regional Geology
- Field Geology
- Petrophysics
- Reservoir rock and fluid properties
- Well log interpretation
- Reservoir Engineering
- Reservoir Characterisation and Simulation
- Reservoir models
- Reservoir Geophysics
- Formation Evaluation
- Well Log Analysis
- Well Testing
- Seismic Surveys
- Regional Seismic
- Seismic Survey Reports
- 2D Seismic Data
- 3D Seismic Data
- Project Seismic
- Seismic Survey Reports
- 2D Seismic Data
- 3D Seismic Data
- Regional Seismic
- Facilities
- Asset Register
- Facilities Availability, Reliability and Utilisation data
- Block Flow Diagrams and Process Flow Diagrams
- Maintenance Plans
- Safety Case
- Photos, videos, drone shots
- Field Development
- Conceptual Development Studies
- Field Development Plan
- Development Cost Estimate
- Exploration
- Recent Exploration
- Historical Exploration
- List of available data
- Exploration Potential
- Play Overview
- Proposed Program (and commitments)
- Prospects and Leads
- Prospective Resource Estimates
- Abandonment/Decommissioning
- Decommissioning Plan
- Decommissioning Cost Estimate
- Native Title/Heritage
- Surveys/Studies
- Environmental
- Environmental Permits and Approvals
- Environmental Impact Assessments
- Approval Plans
- Oil Spill Response Plan
- Oil Spill History
- Climate