Sellers should not become married to a dollars-per-barrel-equivalent scale, says Scott Rees, president and chief operating officer of Dallas-based reservoir-analysis firm Netherland, Sewell & Associates Inc. "We believe wholeheartedly in cash flow," he told attendees at a Society of Petroleum Engineers-Gulf Coast Section business-development program recently. "That's what the buyers follow and that's what the market follows." The hardest deals to negotiate are the ones in which the seller wants to sell at an inferior price because "it's the best sale they've ever seen," he added. Rees also suggests asset-marketers and clients go to the field and see the assets first-hand instead of dealing completely with figures and data. Reservoir-analysis firm H.J. Gruy & Associates Inc. president Marilyn Wilson said a more balanced view of a property's worth can come from independent analysis. "A lot of times our clients are accepting the geology and figures from the seller," she said. For more on this, see the January issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
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