UK Private Equity

SITUATION
A UK based Private Equity acquired an upstream E&P company, divested by a major oil corporation.  The company had sizable 2P reserves (PDP, PDNP and PUD), and investors expectation was substantial free cash flow (FCF). The PE and its investment bank apparently did not involve operations partners, resulting in significant performance gap after the acquisition.
TASK
The main task was to bring the integration to the new team, and focus on improving margins in short-term with low cost well interventions, as ROIC was significantly below the opportunity cost and any focus on growth through capital investment would have destroyed the value.
 
ACTIONS
We helped the team re develop the corporate strategy
  • Re framed the opportunity with management team
  • Assessed the value gap
  • Identified areas of internal improvement, divestments and growth opportunities 
  • Introduced performance management, measurement and rewards
  • Developed two-year program to increase ROIC and margins with internal improvements
  • Developed long-term growth plan to  by increasing production from 60 KBPD to 150 KBPD
 
RESULTS
  • Production increased to 70 KPD by the end of two years and ROIC increased above opportunity costs