The Pricing of International Oil and Gas Companies 1990-2003 - a Structural Shift in the Equity Valuation Process

20 Pages Posted: 15 Jan 2006

See all articles by Bard Misund

Bard Misund

University of Stavanger

Petter Osmundsen

University of Stavanger; CESifo (Center for Economic Studies and Ifo Institute)

Frank Asche

Stavanger University College

Date Written: October 1, 2005

Abstract

This paper examines the equity valuation process for the world's largest privately owned oil and gas companies. Our analyses provide evidence for a structural shift in the valuation of the largest oil and gas companies. Furthermore, we examine the key value-drivers that have been instrumental in the structural shift. Using financial and operational information from 15 international oil and gas companies over the period 1990-2003 and proxies for merger activity and market sentiment, we test for structural shift in the valuation of integrated international oil and gas companies. We show that financial information such as net income, cash flows and accruals, and operational measures such as the size of oil and gas reserves, are instrumental in explaining the structural shift in valuation of oil and gas companies.

Keywords: company valuation, structural shift, oil company

JEL Classification: G12, G32, G34, M41, L71

Suggested Citation

Misund, Bard and Osmundsen, Petter and Asche, Frank, The Pricing of International Oil and Gas Companies 1990-2003 - a Structural Shift in the Equity Valuation Process (October 1, 2005). Available at SSRN: https://ssrn.com/abstract=874915

Bard Misund (Contact Author)

University of Stavanger ( email )

PO Box 8300 Forus
Stavanger
Norway

HOME PAGE: http://www.uis.no/article.php?articleID=76145&categoryID=11199

Petter Osmundsen

University of Stavanger ( email )

4036 Stavanger
Norway

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Frank Asche

Stavanger University College ( email )

PO Box 2557
Ullandhaug
4004 Stavanger
Norway

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