The industry takes a hit

How we got here

At the end of 2014, US domestic energy companies had approximately $120 billion in goodwill and over $1.7 trillion in property, plant and equipment (PP&E) and reserves on their balance sheets. The goodwill and other asset balances were the result of a vibrant transaction environment over the previous several years. For those not familiar with the term goodwill, it is the residual amount of the purchase price after allocation to working capital, tangible assets and identifiable intangible assets. The existence of goodwill is not necessarily an indication that buyers overpaid in these transactions, rather that the value paid in the transactions containing goodwill exceeded the value of identifiable tangible and intangible assets as of the closing date.

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Seenu Akunuri
Deals Partner
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Tim Stuhlreyer
Deals Director
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