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Auction Services

Through our extensive oil and gas experience and commitment to professionalism, The Clearinghouse is the premier provider of auction divestiture services for oil and gas properties. The Clearinghouse revolutionized the oil and gas auction divestiture business by combining the advantages of negotiated sales (quality evaluation data, data room support) with the most positive attributes of a live auction (maximum buyer exposure, competitive selling environment, immediate closing, no negotiation, quick settlement). Established in 1993, The Clearinghouse has continued to enhance its position as an industry leader by blending Internet bidding into its service lines. Today, The Clearinghouse provides two different types of auction marketing services and conveniently delivers property data and evaluation information via the Internet (see Data Room Explorer) or in hard copy form.

Negotiated Sales & Transaction Services

The Clearinghouse is recognized as a premier advisory firm for sealed-bid and negotiated transaction packages. We have built a reputation as the most technically capable marketing firm in the upstream oil and gas industry, and is distinctive for our industry knowledge, contacts and relationships. Negotiated transactions are best suited for higher-valued properties and/or oil and gas producing properties that are technically complex and have a material upside component.

Negotiated Transactions
Although The Clearinghouse originally gained the reputation as the premier auction marketer in the nation, we are now also recognized for our outstanding technical support focused on finding, quantifying, and presenting upside components of property packages. All of the technical work done at The Clearinghouse is in accordance with SEC reserve category guidelines. Through our unmatched industry contacts, and with the aid of our extensive buyer database, we are able to provide negotiated transaction services on a tailored basis to best meet the individual needs of each client. All negotiated transactions are supported with physical and electronic data rooms designed to provide evaluation data effectively and efficiently in an effort to reduce the "discovery time" required for a prospective buyer to evaluate the opportunity.

Technical Resources

The Clearinghouse's Technical Resources Group evaluates and prepares more oil and gas packages for sale than all other upstream transaction advisors – combined. Our experienced team of engineers, geologists, geophysicists, landmen and data technicians can assist you through every step of the selling and/or buying process.

We believe the two most important technical keys to obtaining the maximum fair market value are:
(1) the identification and credible presentation of upside value; and
(2) completely and speedily answering all questions from potential buyers.

Our Technical Resources Group supports both Negotiated Transactions and higher-valued auction properties, and has worked with hundreds of buyers and sellers and every producing basin throughout North America. This unprecedented depth and breadth of our technical services group gives us unmatched knowledge of the marketplace and an incredible number of trusted relationships.

Information Services

The Clearinghouse is an industry leader in electronic delivery of data and information over the Internet

Hybrid Live Auction

The Clearinghouse is the only company in the industry that offers a hybrid bidding process that combines the ability to bid real-time via the Internet, or in person, at a live floor auction. Hybrid auctions are well suited for selling geographically scattered working and royalty interests, both operated and non-operated, with a PDP/upside ratio of 70/30% or less. Through technology developed internally, we have transformed our live auctions into a virtual marketplace. We host 8-10 hybrid auctions physically in high quality hotel ballrooms or convention centers. As our world champion auction team calls for a new price on each property, trained professionals simultaneously send a message to registered Internet bidders reflecting the new asking price. Through a bidder-friendly screen, Internet bidders can place a bid by clicking on a "BID" button, which sends a message back to the auction clerk. All of this occurs in milliseconds over high-speed connections. Today The Clearinghouse receives at least one internet bid on 80% of the auction lots offered, and we sell roughly 33% of our lots to Internet bidders.

Exclusively Online Auction

The Clearinghouse offers auctions that are conducted solely over the Internet and are particularly well suited for royalties, overriding royalties, and mineral interests. Exclusively Online auctions generally feature a multi-day (3-4) day bidding window with a predetermined time for the first lot to close. Lots are sold one at a time, in sequential order, generally 6 1/2 minutes apart. Bidders can place proxy bids and let the auction engine automatically counter bid for them, or bids can be placed manually. If a bid is placed in the last 45 seconds before the time a lot is scheduled to close, then the bidding deadline is extended for an incremental 45 seconds.

By combining The Clearinghouse's considerable auction transaction experience with our internal software development skills, we have developed a powerful, state-of-the-art auction engine with a logical, easy-to-use bidder interface and quick access to property data/information. Our auctions are run on our own servers, which have the capacity to handle high volumes of simultaneous bidding activity. Our Exclusively Online auctions offer a fair, electronic process to all participants and give every bidder a reasonable opportunity to be the successful buyer.

Lotting Recommendations

Lotting (the grouping of several properties to be sold together in an auction) can enhance or diminish the properties' collective value. We can offer experience based recommendations that may assist you in developing your lotting strategy to achieve the highest possible dollar value from the sale of your properties.

Sales Brochure Preparation

The Clearinghouse's full color "Selective Offering™" Sale Brochure for its auctions (both Hybrid and Exclusively Online) continues to set the standard for industry property listing publications. This highly recognizable publication, which is mailed to over 16,000 prospective buyers, is a reader-friendly brochure that features profit and loss summaries, production data, and decline curves for all Notable and Minimum Bid properties. Additionally, it contains a listing of all properties being offered, a list of all operators of properties in the sale, and other pertinent information. Visit the offices of virtually any active purchaser and you will find any number of current or recent Clearinghouse auction brochures sitting on coffee tables, credenzas and desks.

Buyer Screening

Our Selective Offering® process of qualifying and identifying potential buyers guarantees that properties will be exposed to thousands of proven buyers and will receive fair market value. To be added to The Clearinghouse database, potential buyers must be financially accredited and make written representation concerning their knowledge and sophistication relative to the oil and gas business and its inherent risks. The Clearinghouse has developed and continuously maintains an extensive database of buyer profiles detailing geographic, acquisition size, and asset preferences. This database contains thousands of historical transactions and is a critical element in exposing properties to the market, whether on a broad or targeted basis.

Information Updates

The web version of our Selective Offering®, the Data Room Explorer® is updated with any changes to the listed properties. Should there be an addition, deletion or change it will be highlighted in red type.

Data Room Services

The Clearinghouse administers six data rooms in its Houston offices for evaluation of complete records for notable auction properties. This allows the potential buyer time to research properties, which results in more confident bidding to the benefit of both the buyer and seller.

Regulatory Filings & Closing Assistance

As part of our standard service, The Clearinghouse's professional land staff quickly and efficiently handles the burdensome job of filing:

(1) assignments of record,
(2) change of operator forms, and
(3) state, federal and Bureau of Indian Affairs approval forms.

Our knowledge of specific agency requirements and filing fees expedites the process of transferring title and operations, which in turn tremendously assists both the buyer and seller of the property.

Packaging Recommendations

Although The Clearinghouse originally gained the reputation as the premier auction marketer in the nation, we are now also recognized for our outstanding technical support focused on finding, quantifying, and presenting upside components of property packages. All of the technical work done at The Clearinghouse is in accordance with SEC reserve category guidelines. Through our unmatched industry contacts, and with the aid of our extensive buyer database, we are able to provide negotiated transaction services on a tailored basis to best meet the individual needs of each client. All negotiated transactions are supported with physical and electronic data rooms designed to provide evaluation data effectively and efficiently in an effort to reduce the “discovery time” required for a prospective buyer to evaluate the opportunity.

Information Memorandum

The Clearinghouse prepares Information Memorandums and an executive summary on all negotiated packages offered. These documents typically describe:
• the properties being offered;
• brief history of the field(s);
• the producing and financial characteristics of the field;
• the terms and conditions under which the offering is made; and
• the offering process and timing in which offers should be made.
Our offering memorandum can be distributed in paper form and/or via e-mail notifications to a selective buyer list as well as broadcast throughout the industry.

Develop Prospective Buyer List

Through our comprehensive line of services, consisting of both negotiated transactions and auctions, The Clearinghouse deals with hundreds of buyers and sellers located throughout the world on a daily basis. Additionally, our business development team located in Houston, Denver, Dallas and Oklahoma City has developed outstanding relationships with top level executive and managerial personnel throughout the industry maintain personal knowledge of their corporate acquisition goals and objectives. Just to make certain we don’t forget just the right buyer for a package, The Clearinghouse will search and sort its proprietary transaction database and its acquisition database that consists of thousands of buyer profiles.

Buyer Screening

Depending upon the manner in which our seller client decides to handle the offering process, The Clearinghouse will utilize its extensive industry relationships, knowledge of the marketplace, and financial background checks to limit the offering process and/or data room process to companies/individuals who are financially and technically capable of closing on the transaction.

Confidentiality Agreement Execution

Confidentiality Agreements, in a form determined by our seller clients, are generally required for negotiated transactions. The Clearinghouse distributes these agreements as part of the original Information Memorandum, and they can be downloaded from the Internet via Electronic Data Rooms built for such properties.

Information Updates

During the negotiated transaction offering process, The Clearinghouse will provide weekly information updates to our client. These updates include a listing of all companies inquiring after the properties, requesting data or scheduling data room appointments. Also included are post-data room interviews, summaries of ongoing data access activity, notes on conversations with prospective purchasers, listings of those companies expected to bid, and estimates of bids from those companies that have provided that information. In short, a Clearinghouse client will always know exactly the status of his sale.

Data Organization

The Clearinghouse believes that providing clean, concise, standardized packages of data is one of the most critical aspects of maximizing the value of a property or package. This allows the potential buyer(s) to understand and evaluate the asset(s) in a timely manner and will minimize unanswered questions. Having completed thousands of transactions, we can assist the client in data package preparation of negotiated transactions, auction packages (including expanded data books), and the development of an Electronic Data Room.

Bid Analysis

The Clearinghouse will receive and provide to the seller client an evaluation summary of all bids received in a highly secure environment. Based on the results of the bids, The Clearinghouse will assist in clarifying all points contained in the offer, as well as bringing the transaction to a timely close.

Data Room Services

The Clearinghouse supports all marketing techniques with both physical and electronic data rooms. The Clearinghouse administers six data rooms in its Houston offices for evaluation of complete records for negotiated transaction packages. This allows the potential buyer time to research properties, which results in more confident bidding to the benefit of both the buyer and seller.

Portfolio Analysis

Utilizing a combination of empirical data and industry rules-of-thumb, The Clearinghouse can review a client’s divestment portfolio and provide solid recommendations on which marketing process to use for an asset portfolio as well as market adjusted estimates of value. This analysis also includes analysis of key attributes of the properties and potential challenges that might be faced in marketing. A thorough review and understanding of a variety of parameters, such as risked discounted Present Worth, reserves pricing ($/BOE), cashflow multiples, acquisition cost ($/BOEPD), % PDP, % operated, and geographic areas of concentration, is critical to properly designing a successful marketing process. Variances to industry norms are flagged for further review while the attributes are highlighted and showcased.

Process Design & Implementation

Following a thorough portfolio analysis, The Clearinghouse will make specific recommendations concerning the best marketing technique to utilize to meet your value and timing requirements. Clients' objectives will dictate how and when properties are sold; however, a properly executed portfolio rationalization program will frequently consist of a combination of negotiated transaction(s) and auction(s). The Clearinghouse has the unique ability to tailor our divestiture services to meet the specific needs and objectives of our clients by offering a comprehensive line of marketing services (Negotiated Transactions, Hybrid Auctions, Exclusively Online Auctions and Electronic Data Rooms).

Packaging Recommendations

One of the benefits of a Portfolio Analysis is that it aids in gaining a better understanding of the client's divestment package attributes. From this analysis and a complete understanding of a client's objectives, we can recommend the optimum method of selling assets. For example, geographic concentration, operations, and development potential may all indicate that the best sales method is through a negotiated package or packages, while other isolated, lower-value and/or primarily PDP properties might be best directed to the auction process. We have executed numerous divestiture programs through the years, utilizing both negotiated transaction and auction processes which have resulted in substantial premiums for our seller clients. Utilizing the right marketing process for each asset category is a key element to maximizing fair market value.

Engineering Evaluation

Our technical team of engineers and geologists can provide full reservoir studies and reserve estimates for properties using generally accepted and standard engineering principles and practices. All reserve estimates utilize the Security and Exchange Commission's (SEC) guidelines and definitions for reserve categories and associated risks. The Clearinghouse has the largest and most experienced technical team in the A&D Advisory business.

Geologic Evaluation

One of the real challenges in marketing producing properties is in finding and demonstrating upside reserve potential. Our "G&G" teams specialize in doing grass roots studies on your assets and unlocking upside value. Once this upside is identified and quantified, they will be thoroughly and logically presented in a credible fashion in our datarooms.

Commercial Evaluation

To understand the commercial and financial parameters of a property, a thorough historical review of commodity prices, expenses and capital costs must be conducted and ultimately presented to potential bidders. For prices, we compare the variances (sometimes called price differentials) to actual prices received for the area. This would include basin differentials, quality adjustments, transportation deducts, processing shrink, contracts, etc. For expenses, we review direct operating costs, non-reoccurring items, G&A, overhead, etc., to provide a future model for estimating costs.

Economic Evaluation

Utilizing the engineering, geological and commercial evaluations, and adding an assessment of market conditions going forward, The Clearinghouse can run a variety of future value sensitivities to help our clients better understand their divestiture package(s). This includes risked and discounted cash flow models that provide a "Net Present Value" profile of the properties. Through the combination of our negotiated transaction and auction services, we are thoroughly in touch with the marketplace and have an unmatched understanding of price decks currently being used by buyers in the marketplace.

Data Organization

The Clearinghouse believes that providing clean, concise, standardized packages of data is one of the most critical aspects of maximizing the value of a property or package. This allows the potential buyer(s) to understand and evaluate the asset(s) in a timely manner and will minimize unanswered questions. Having completed thousands of transactions, we can assist the client in data package preparation of negotiated transactions, auction packages (including expanded data books), and the development of an Electronic Data Room.

Data Room Services

The Clearinghouse supports all marketing techniques with both physical and electronic data rooms. The Clearinghouse administers six data rooms in its Houston offices for evaluation of complete records for notable auction properties and negotiated transaction packages. This allows the potential buyer time to research properties, which results in more confident bidding to the benefit of both the buyer and seller.

3D Workstation Service & Operation

Through our strategic alignment with Landmark Graphics, a Halliburton company, clients can use state-of-the-art 3-D workstations on a short-term basis to support data room projects for exploratory deals or asset transactions. Additionally, Landmark system operators are available to present seismic interpretations to prospective buyers. Online access can be provided to a Landmark application environment hosted in a Halliburton Grand BasinTM data center.

Market Value Estimates

TThe Clearinghouse utilizes its historical transaction database and market knowledge in evaluating the potential market value of a single property and/or a full package of properties. Timing, property attributes, offering terms, financing availability and overall industry conditions are factors that may affect the marketability of a project.

Data Retrieval

Our IT team can work with a seller's in-house information services group to gather critical data and download it electronically into a divestiture software database developed by The Clearinghouse. This process greatly enhances the efficiency of the "sell side" due diligence process by allowing the reviewer to verify downloaded information rather than having to newly create it.