A Tale of Caution: Growing without a Customized Financial Model

Recently, an oil and gas company approached Darby Finance about a customized financial model while already in negotiations with a partner company. These negotiations would expand the company’s footprint into in a new geographic region, which would bring about a significant change in tax considerations and profitability.

However, the oil and gas company’s decision-making had been hindered by a complex financial model that was not easy for the partner company to use or understand, as well as overly verbose emails and presentations. As the Darby Finance team continued discussions with this company, it came to our attention that the company had been operating without a customized financial model or proper knowledge of financial communications and were at risk of losing this new opportunity as a result.

The Problem: A Patchwork Financial Model

Currently, the client is spending an exorbitant amount of time adding analysis and new calculations to an already complex financial model that is not easy for the partner company to use or understand. Communications are happening via email and are overly wordy.

Darby Finance’s Solution: A Customized Financial Model

The Darby Finance team improved the partners’ and shareholders’ decision-making capabilities by providing a robust yet easy-to-use financial model and financial communications. Darby Finance also created a new, easy-to-use customized financial model that allowed stakeholders to run sensitivities and analysis from a main page, reducing the complexity and fear of ‘breaking the model.’

Additionally, the Darby team deciphered a strong desire to increase visual output (i.e. graphs) so partners can easily understand key drivers and clearly see forecasted results from the model’s inputted decisions and uncertainties. Darby also offered financial communication consulting to streamline conversations and reduce miscommunications.

The Result: Clarity in Negotiations

The client was able to move forward in negotiations with their new partner company, with a full understanding of the implications of expanding into a new geographic region, as well as with a strong confidence in their decisions. Additionally, the customized financial model had a direct impact on maximizing the value of the project.

Darby Finance delivers customized financial models to help you make better financial decisions.


About Darby Finance – A Leading Financial Consulting Firm

Darby Finance helps our clients make better financial decisions by transforming complex data into a compelling and easy-to-understand financial story. We work alongside our clients to develop customized financial models, valuations, and sophisticated investor presentations while utilizing more than 40 years of experience in energy, finance and investor relations.

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