Solstice Engineering has created an LLR Evaluation Report that assists companies in reducing the liability side of the LLR equation by quickly determining liability reduction opportunities and identifying a licensee’s LLR friendly assets. Reduction opportunities can often provide increases of 10-20% to an LLR, buying time and providing flexibility.
“License Liability Ratings are a hot topic,” reports Clint Nerbas, Solstice Engineering President. “With commodity prices in decline, licensees have shut-in non-economic production and are curtailing new production. As a result, many licensees are starting to approach an LLR of one, which puts them at risk of having to post significant security deposits. It also limits their ability to acquire or divest assets if the buyer or seller will be put in a position where the LLR will fall below one, forcing them to post security deposits or to cancel the deal.“
Solstice Engineering’s LLR Evaluation Report includes the following powerful tools:
- LLR Predictor: Provides realistic projections of LLR trajectory, allows users to adjust industry netbacks, and provides estimate of possible LLR increase.
- Field Summary: Identifies which fields to target for divestiture, which fields to retain, and provides an estimate of possible LLR increase per field.
- Individual Well Analysis: Determines potential for liability reductions through digital submissions and provides the expected liability reduction.
- Individual Facility Analysis: Determines potential for liability reductions by performing license amendments and digital submissions.
- Solstice Independent End of Life Liability Evaluations: Provides highly accurate, AFE ready, end of life estimates for wells, pipelines, and facilities.
- Wellbore Schematic Builder: Solstice has created an innovative Excel based Wellbore Schematic Builder that accurately builds wellbore schematics based on government data which greatly reduces the time required to verify liability reduction opportunities.
- Oil and Gas Licensees
- A&D Specialists – Solstice estimates the LLR to determine the impact of an acquisition or divestiture and assist in specifying which assets should be included during negotiations.
- Financial Institutions
- Environmental Consultants
About Solstice Engineering Ltd.
Solstice Engineering Ltd. provides petroleum software solutions, acquisition and divestiture liability estimates, LLR evaluations, independent ARO estimates, and petroleum consulting services. SolComp, Solstice Engineering’s regulatory compliance management system, provides petroleum companies with the most complete and intuitive compliance software system available to industry.
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