Fractionation distillation is the separation of crude oil in atmospheric and vacuum distillation towers into groups of hydrocarbon compounds of differing boilingpoint ranges called fractions or cuts. This workflow template illustrates the yearly valuation of refinery facilities based on property value, comparable facility values, production capacity and expected cash flow. Free cash flow to the firm ebit 1t net cap ex change in working capital 3356 1 0. We also provide a twoyear lookback at the trends of these multiples for most of the industries covered.
Multiples or real options cannot be applied without some adjustments and demarcations. Reliant business valuation is a leading business valuation and equipment appraisal firm for sba lenders and currently works with over 150 of the nations top sba lenders. Deloitte corporate finance distinguishes itself by bringing. Which shortcut valuation multiples should be used when valuing oil and gas. A study in the financial valuation of a topping oil refinery birkbeck. Orl isr the most common multiple used in the valuation of stocks is the pearnings ntm multiple price to earnings. The equitysales valuation multiple has the next lowest coefficient of variation with a difference between its lowest value. Provided a critique of the valuation methodology used by the refinery as basis for lawsuit seeking reduced ad valorem taxes. The crude oil refinery industry is indeed strategic industry and players in this industry refine crude oil into petroleum products. Operating multiple refineries also indicates geographic or. Visited the site and assessed the overall condition of the asset. This quarters featured article is from deloitte resource evaluation and advisorys report deloittes oil and gas price forecast december 31, 2017 and provides a forward view of the oil and gas market.
We explain how multiples are calculated and discuss the different variations that can be employed. This formal valuation and fairness opinion has been. Instead of traditional metrics like revenue or eps, you list the metrics and multiples that are relevant to. Magnetic concentration for some players precious metal refining pgms gold incorporating pgms into various end applications processing. Advised refining companies downstream around value for real and personal property for. Industrywide 111 crop production 1114 greenhouse, nursery, and floriculture production 111421 nursery and tree production 1119 other crop farming 111998 all other miscellaneous crop farming 112 animal production 115 support activities for agriculture and forestry. Assessment included feasibility, cost, and economics of the. Petcoke is the coke that, in particular, derives from a final cracking processa thermobased chemical engineering process that splits long chain hydrocarbons of petroleum into shorter chainsthat takes place in units. Oil and gas sector update americas 2nd quarter 2019. A sample crude oil refinery business plan template 1. Valuation multiples by industry, including evrevenue and evebitda multiples. This article will focus on the valuations and the recent financial performance of the large independent refiners. Momentum indicators relate either price or a fundamental such as earnings to the time.
Many refined products, such as gasoline, are produced in multiple grades, to meet different specifications and standards e. Our experts have presented on topics including downstream earnings, refinery restructuring in 2016, long term ngl outlook, crude and. Prepared a fair market valuation assessment of a leased refinery gas recovery process unit located within a refinery. This multiple is used to compare a companys market value with its earnings. Oil refineries ltd market multiple valuation orl isr. Petroleum refinery engineering multiple choice questions. For refiners, low oil prices initially signal higher profit margins as refined oil product prices are not perfectly. The table below summarises evals current monthend calculations of trailing industry enterprise value ev multiples for us listed firms, based on trailing 12month financial data. Market multiple valuation of national refinery limited nrl pak the most common multiple used in the valuation of stocks is the pearnings ntm multiple price to earnings.
The first step in choosing the appropriate valuation approach is to understand the sector of the value chain in which the subject company operates. It is intended to assist the valuer in highlighting the main factors that affect the valuation of commercial renewable energy installations and to outline the valuation process and approaches. For example, cash flow or earnings based valuation methodologies may not be relevant for the valuation of a mining exploration company that has no production assets or revenues, neither operating cash flow or earnings. Phase iii future upside our valuation is a blend of dcf and fy22e pe and ev ebitda multiples. In a perfect market, the price differential between two crude types should be very close to. This can create some confusion for employees, but it is actually a very straightforward situation. High growth comps include companies with 2021e revenue growth greater than 15%. In effect, conditional valuation is the multivariate counterpart of price multiple valuation it is based on the same rationale as price multiples but uses. Apr 01, 2021 investors also refer to the multiples approach as multiples analysis or valuation multiples.
Indian oil valuation negotiated rulemaking committee denver, colorado june 18, 2012 crude oil valuation and supply demand overview. Valuation multiples of recent transactions since january. Refining % 65% 63% 49% 78% 89% usgc as % of 2014 refining edc 0% 67% 36% 0% 59%. Journal of business valuation and economic loss analysis. Refinery cost and margin analytics combines robust underlying data with visualization and analytical tools to provide an intuitive way to benchmark the competitive landscape of the global refining industry, at an asset level, with a forecast of their performance. When doing so they may refer to a financial ratio, such as the pricetoearnings pe ratio, as the. Keywords company valuation, comparable company valuation, the market approach, the multiple approach, value drivers abstract company valuation is entering a new era. The most common multiple used in the valuation of stocks is the pearnings ntm multiple price to. Properties of the refinery produced streams blendstocks that make up gasoline and diesel fuel refinery processing options for producing ulsg and ulsd the tutorial is written for readers having an interest in ulsg and ulsd production but having no familiarity with refining operations in general and sulfur control in particular.
Valuation date 30th september 2015 capacity of valuer external purpose account purposes fair value 433,990,000 four hundred and thirty three million, nine hundred and ninety thousand euros, exclusive of vat. The pe multiples of most industries have declined from september 30, 2018 to december 31, 2018. The liner industry is a crucial segment of the global economy and contributes significantly to world economic output. Feasibility and economics to produce carb phase 3 gasoline and diesel performed independent assessment of a refinery project to produce carb gasoline and diesel. This workflow includes initial refinery valuation, tax value negotiation and final tax payment. Pe relates the current share price with the market expectations in terms of earnings per share.
The refinery evaluation model provides you access to visualisation tools and data that enable you to benchmark refineries cash margin performance at an asset level, analyse crude slates and product yields, evaluate global investment plans, track transactions, and compare refinery competitiveness and configuration over time. Finally, the chemical synthesis of plastics such as ethylene, propylene, polyethylene and polypropylene is a huge, still growing market. Fuer homepage valuation of metals and mining companies. Refining operations petroleum refining processes and operations can be separated into five basic areas. Management has represented to us that the information provided for the purpose of this formal valuation and fairness opinion is true and correct in all material respects as of april 5, 2019. A price multiple summarizes in a single number a valuation relationship to a familiar quantity such as earnings, sales, or book value per share. This study was prepared by the authors in their personal capacity. Ebitda multiples using reported financial data from peer companies pure play refiners allows for an estimate of a refiners value based on its current or recent profitability. R29 marketbased valuation price and enterprise value.
Acquisition data from industry acquisitions typically a median from a group of transactions can be utilized to calculate a valuation multiple on the subject companys performance measures. The downstream operations include refining and marketing. Petroleum coke, abbreviated coke or petcoke, is a final carbonrich solid material that derives from oil refining, and is one type of the group of fuels referred to as cokes. Indian oil valuation negotiated rulemaking committee denver, colorado june 18, 2012 crude oil valuation. Key credit factors for the oil refining and marketing industry. Data includes enterprise value multiples for 2018, 2019 and 2020. Economic valuation of the liner industry the most common measures of the value of an industry in the economy are the value of output produced by the sector and the associated employment provided by this activity. More than 660 refineries, in 116 countries, are currently in operation, producing more than 85. Refining ebitda per barrel of throughput is defined as refining margin less operating expenses excluding depreciation. This is obviously related to the relative abundance of hydrogen and carbon.
Petcoke is the coke that, in particular, derives from a final cracking processa thermobased chemical engineering process that splits long chain hydrocarbons of. Evrevenue valuation multiple we provide additional data relating to industry evrevenue valuation multiples. We reduce our ev ebitda multiple for refining, marketing, pipeline and petchem. Advised midstreampipeline companies around value for tax shield and 704 c allocation purposes ad valorem tax consulting. The companies also differ in their concentration on refining. Calculation of five crude type prices using the alternative crude valuation method, which is based on the concept of indifference or parity pricing. Most equity research reports and many acquisition valuations are based upon a multiple such as a price to sales ratio or the value to ebitda multiple and a group of comparable firms.
Mlp evebitda multiples normalize to the trailing 3year average of 10. A primer november 2001 3 ubs g wr bu r a an introduction to multiples this document is intended to be a reference manual for the calculation of commonly used valuation multiples. Mlp ev ebitda multiples normalize to the trailing 3year average of 10. Companies are navigating a new reality and facing valuation challenges with respect to developing financial. Companies in the oil industry compete in each of these. Price multiples are ratios of a stocks market price to some measure of value per share. How to value an oil and gas refinery mercer capital. Hellenic petroleum refining estimates and valuation edison.
The difference between the lowest equitybook value valuation multiple 1. Comparing the peer companies ratio of company value to recent ebitda gives a ratio that can then be applied to a specific refiner or refinery s current ebitda. Bizminer valuation multiples sales group included naics. Valuation of assets in the commercial renewable energy sector. View r29 marketbased valuation price and enterprise value multiples.
We hope you find this report helpful to get a broad sense of the range of trading multiples for major industries in india. Expert witness and dispute support asset valuations. We also have least common multiple lcm and factoring worksheets. Medium low growth comps include companies with 2021e revenue growth of less than 15%. Jan 06, 2020 5 common trading multiples used in oil and gas valuation. Three standard valuation approaches the income approach, the market approach and the asset approach typically are applied in valuing companies in the oil and gas industry. These businesses historically traded at higher multiples than refining and. Basically, petroleum refining involves one or more of the following activities. Companies in the downstream sector are involved in refining crude oil and in. This page has a set of printable worksheets on finding multiples of numbers. Valuation analyst through the national association of certified valuators and analysts nacva. Aug 11, 2016 a spokesperson for refinery29 tells me that the companies are not commenting on the current valuation, but a report last month in recode about the startup raising which accurately identified. Use of relative valuation the use of relative valuation is widespread.
It does not set out to provide a comprehensive manual for the appraisal of renewable energy installations. Energy services update q4 2016 q4 2017 deloittes oil. Overview of pgm processing anglo american platinum. Oil refineries ltd market multiple valuation orl isr exploration. The industry is broadly defined as the operations and underlying infrastructure involved in scheduled oceanborne shipping. Valero is nearly 90% dependant on refining, while phillips 66 has less than 50% of its assets in refining table 2.
The opinions and views expressed in it are exclusively attributable to the authors and do not. Petroleum refinery engineering multiple choice questions and. The oil and gas industrys value chain is classified into three distinct. The power of the multiple in many esops, the trust buys some, but not all, of the stock and then buys more some years later. Purchase and download this template in pdf, powerpoint ppt and visio vsd formats.
Valuation insights special coronavirus covid19 edition the coronavirus covid19 is impacting businesses globally by disrupting supply chains, travel, production and consumption, threatening operations and financial markets. Multiples in financials industry space have improved on account of capital infusion in public sector banks and improvement in asset quality. Mcq quiz on petroleum refinery engineering multiple choice questions and answers on petroleum refinery engineering mcq questions on petroleum refinery engineering objectives questions with answer test pdf for interview preparations, freshers jobs and competitive exams. Healthcare, internet and software industries experienced a larger decline due to weakening global growth. Asset valuation support, assisting buyers sellers of refining, distribution and retail assets bring an ihs markit expert speaker to your conference, event, board presentation or strategic planning meeting. As the companies who request the valuation, together with third parties.
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