Due Diligence & Asset Transfer Advisory

Due Diligence & Asset Transfer Advisory

Due Diligence & Asset Transfer Advisory

Have you considered potential asset integrity liabilities when conducting Mergers, Acquisitions, or Divestments?

The Challenge

The energy industry is characterised by large investments, major technological challenges, and significant commercial and political complexity, exposing owners to financial, safety and environmental risk. It is well understood that a degree of diligence, whether at portfolio, project or asset level is required to quantify this risk and ensure that both the vendor and buyer are protected from any nasty surprises or hidden liabilities.

The recent trend of divesting aged assets to ‘new era’ operators who promise to operate a leaner, more commercially viable business model for asset life extension has resulted in capital intensive assets changing hands at what would otherwise have been the end of their design life.

What does due diligence mean and what do we assess?

Due diligence in commercial transactions is not a new process, however, it is often biased towards financial and legal liabilities, rather than demonstrating the performance, reliability, and integrity of physical assets. The reality is that both are needed.

AIE’s approach to Due Diligence assessments recommends that the purchaser satisfies themselves as to ‘the condition of tangible assets’ and it is our view that the purchaser must have confidence that the major capital equipment items have an adequate and quantified remaining life.

What makes AIE different?

We have extensive practical experience in designing, operating, maintaining, and inspecting high-risk, capital-intensive assets. AIE believes that the most successful due diligence assessments involve teams with both the engineering skills necessary to understand the asset and provide an in-depth assessment and audit experience. Site-based inspections and engineering reviews by skilled discipline engineers are critical for completing a competent assessment of asset condition and remaining life. Meanwhile, financiers can enhance this assessment with capital projections for ongoing operations, estimations of reinstatement and insurance costs, and quantified decommissioning liabilities.

By appointing AIE as your due diligence partner, we can professionally and competently:

  • Physically inspect and provide an accurate engineering assessment of current asset condition
  • Provide detailed fitness for service assessments of known defects
  • Provide technical guidance on mechanical damage and corrosion mitigation in aged assets
  • Estimate remaining life based on an in-depth identification of current and future damage mechanisms
  • Provide risk-based guidance and practical operational knowledge on the operation, maintenance, inspection, and repair of such assets
  • Optimise future maintenance and inspection burden based on an independent assessment of asset risk
  • Assess the management systems, procedures and technical codes that have been applied to the asset in the past and review the suitability of these for the future
  • Provide a comprehensive assessment of compliance to applicable health, safety and environmental Codes, Standards and Regulations
  • Predict future CAPEX and OPEX spend based on current and predicted asset condition
  • Increase critical equipment reliability and uptime

Please feel free to contact us for a discussion on how AIE can deliver expert and independent engineering analysis to your due diligence transaction.