Knowing Your Customer: 4 Reasons Banks Need Experienced Energy Advisors
Knowing your customer is essential throughout the life cycle of your relationship with counterparties. For banks, you need expert assessments of prior earnings, assets serving as collateral and the risk environment of your customer. For distressed situations, you need an expert advocate that understands troubled customers' liquidity and asset values. Here are four reasons why it's important to have an experienced energy advisor on your side:
Whether your needs are corporate restructurings and interim management or financial reviews and debtor services, you need experienced professionals that can deliver innovative solutions that address each situation for each stakeholder in the enterprise—no matter how unique or complex.
- Reserve Engineering
You need experienced petroleum and reserve engineers that can apply a robust set of technical capabilities to deliver a complete, accurate and detailed assessment of the value of your assets. By combining reservoir engineering, geoscience evaluation techniques and advanced data analytics with economic analyses it’s important to partner with an experienced staff that has deep energy expertise to deliver individual, customized solutions.
- Borrowing Base & Risk Environment Reviews
Knowing your customers’ asset base requires having a partner on your side that can assess whether they meet the standards you bargained for. Assessment of your customer’s risk environment provides clarity of the risks in customers’ governance, policies, limits, organizational design and risk oversight.
- Quality of Earnings Assessments
Prior to making a loan, banks and financial institutions must evaluate a debtor’s financial health, both retrospectively and prospectively. Aligning with an experienced team of energy advisors ensures the stability and persistence of earnings so companies can make informed decisions. Ultimately, banks win when they're able to walk away from a deal with minimal cost vs. being stuck with a bad investment.