GESGB Online Talk | Overcoming the Challenges and Associated Commercial & Economics Risks Involved in Farmouts to Achieve Success

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Topic: Overcoming the Challenges and Associated Commercial & Economics Risks Involved in Farmouts to Achieve Success

Speaker: Mike Lakin, Managing Director, Envoi

Abstract

The challenges and risks involved with E&P farmouts and the search for industry partners to share in the risk of exploring for and ultimately drilling for oil and gas are all too often misunderstood by management where time is the biggest and constant risk to success and based on the appropriate A&D market conditions. The necessary budget and time to maximise success is equally underestimated where project marketing is too often purely technically focused with the seller (the farmor) unprepared commercially for the positive post CA due diligence by many buyers (the farmees). Understanding the process and recognising the key buyer and seller criteria, ensures the maximum chance of success with the proper planning and resources. The old military adage of the 6 Ps is worth remembering; Prior, Planning and Preparation Prevents Poor Performance (where the 7th P obviously needs to be left out in this instance!).

Speaker Biography

A geology graduate from Cardiff University in 1981, Mike Lakin worked for independent oil and gas companies including Superior Oil, Carless Exploration and Kelt (the UK’s subsidiary of Perenco) involved in the UK, Europe and West Africa until 1989. Mike then joined a London advisory group as a geologist specialising in international upstream project A&D (Acquisition & Divestment) and portfolio management activities, becoming group General Manager, until leaving to establish his own Upstream Energy A&D Advisory company, ENVOI Limited at the end of 1999 with whom he remains Founder and Managing Director.

The Envoi advisory service involves the full marketing cycle from intial technical and commercial project reviews and strategy planning leading to global marketing, management of the full data room due dilligence and offer process.

ENVOI has now spent 26 years advising energy, mostly upstream, clients on the ‘buying, selling energy assets and portfolio management’ on over 350 energy projects around the world. These include mostly hydrocarbon projects with new geothermal and SMR projects as the transition evolves. Envoi also advises NOCs on their Licence / Bid Rounds and has included 3 bid rounds offshore Suriname since 2019.

This meeting is organised by the Risk, Resources, Economics and Commercial SIG committee.