Desert Peak Minerals and Falcon Minerals Corp. recently announced the successful completion of their merger to create Sitio Royalties Corporation. Opportune LLP congratulates the companies on creating a premier, shareholder returns-driven company focused on large-scale consolidation of high-quality oil and gas mineral and royalty interests across diversified operators.

Opportune had three practice areas—Valuation, Tax, and Complex Financial Reporting—work together to help the client with their pro forma financial statements and footnotes. The Opportune scope of work performed by each respective service line is highlighted below.

Valuation – Pre-close, our Valuation team helped review management’s valuation of the company and recent publicly available comparable transactions for pro forma purposes. Following the closing of the transaction, we will provide a purchase price allocation for financial reporting services.

Complex Financial Reporting – Our Complex Financial Reporting team helped to ensure the pro forma financial statements and footnotes, including the Standardized Measure of Oil and Gas (SMOG), were presented in accordance with regulatory guidelines and precedent peer disclosures. The team was able to assist management in determining the appropriate pro forma adjustments based on the transaction economics and regulatory requirements. Additionally, the team worked in tandem with management to address comments received from external auditors and the SEC in conjunction with the filing of the preliminary proxy statement.

Tax – The Tax group analyzed the tax implications of the transaction and, in concert with the Company’s other advisors, utilized the work products of each of the Valuation and Complex Financial Reporting teams to determine the proper tax-oriented financial reporting amounts and discussion to be included in SEC disclosure. Due to the transaction’s novel (Up-C) structure, proper presentation is essential in setting out desired transparency required by today’s capital markets.

Our consultants are industry experts with a wealth of knowledge and experience in the technical aspects of all forms of financial transactions involving the energy sector, including the accounting, reporting, and economic structuring of corporate mergers and asset acquisitions, reverse mergers, joint ventures, and structured debt and equity capital financings. We bring value to our clients on the transaction advisory assignments through the execution of each critically important component we are assigned.