scholarly journals The use of revenue-based multipliers for the appraisal of oil and gas companies

2020 ◽  
Vol 25 (4) ◽  
pp. 387-415
Author(s):  
O.V. Shimko
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Comparative Approach ◽  
Related Factor ◽  
Corporate Value ◽  
Market Capitalization ◽  
Debt Burden ◽  
Significant Difference ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

Subject. The article focuses on ratios of the market capitalization and corporate value to revenue of the twenty five leading public companies in the oil and gas sector within 2008 through 2018. Objectives. The study is to trace key trends in ratios of corporations in the oil and gas. I also determine what caused such a transformation for the analyzable period and whether the multipliers are applicable to appraise the corporate value in the oil and gas sector. Methods. The study is based on methods of comparative and financial-economic analysis, summarizing financial reporting data. Results. Revenue-based ratios are found to be applicable to appraise the value of oil and gas companies. Although having the similar composition of net revenue, companies with better profitability have higher multipliers. Integrated corporations were found to have lower multipliers than independent companies. The study shows that the import-based petrochemical production tends to have the lower value than that using domestic resources. The multiplier goes down if the company's revenue includes proceeds from the resale. As the debt burden grows, the multiplier decreases. Therefore, considering the significant difference in the debt burden, the multiplier should better include the corporate value instead of the market capitalization, since the corporate value comprises the net debt. I also discovered the country-related factor, which should be taken into consideration when using the multiplier. Conclusions and Relevance. The use of revenue-based multipliers requires the thorough analysis of the financial and business operations of companies. However, it is quite acceptable when the overall profitability decreases and the debt burden increases in the public segments of the global oil and gas industry. The findings can be used to appraise the value of oil and gas assets as part of the comparative approach and decide on actions for raising the market capitalization of public oil and gas corporations.

Applying asset-and equity-based multipliers in the valuation of oil and gas corporations

2021 ◽  
Vol 27 (1) ◽  
pp. 129-167
Author(s):  
Oleg V. SHIMKO
Keyword(s):  
Oil And Gas ◽  
Stock Exchange ◽  
Balance Sheet ◽  
Oil And Gas Industry ◽  
Comparative Approach ◽  
Consolidated Financial Statements ◽  
Gas Industry ◽  
Market Capitalization ◽  
Economic Analyses ◽  
Oil And Gas Companies

Subject. This article explores the ratios of the company's market capitalization and value to the balance sheet value of assets and equity of the twenty five leading public oil and gas companies between 2008 and 2018. Objectives. The article aims to identify key trends in the changes in market capitalization and value ratios of the company to the balance sheet value of assets and equity of the largest public oil and gas companies, identify the factors that have caused these changes, and establish the applicability of these multipliers to estimate the value of the business within the oil and gas industry. Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements. Results. The article establishes that the multipliers studied are acceptable for assessing the value of oil and gas companies, but it is preferable to use asset-based ratios. Conclusions and Relevance. The overall decline in profitability and the increase in debt load in the stock exchange sector of the global oil and gas industry should be taken into account when using multipliers based on assets and shareholder capital in the assessment of the value of oil and gas corporations through a comparative approach. The results of the study can be used to assess the possible value of oil and gas assets as part of a comparative approach and develop measures to increase the market capitalization of public oil and gas companies.

Analyzing the market valuations of the world's leading public oil and gas corporations

2020 ◽  
Vol 26 (12) ◽  
pp. 2765-2789
Author(s):  
O.V. Shimko
Keyword(s):  
Oil And Gas ◽  
Balance Sheet ◽  
Oil And Gas Industry ◽  
Market Valuation ◽  
Net Income ◽  
Consolidated Financial Statements ◽  
Market Capitalization ◽  
Economic Analyses ◽  
Market Valuations ◽  
Oil And Gas Companies

Subject. This article explores the market valuation ratios of the twenty five leading public oil and gas companies between 2006 and 2018. Objectives. The article aims to identify key trends in the changes in market valuations of the largest public oil and gas companies, and identify the factors that have caused these changes. Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements. Results. The article shows certain changes in the main indicators of market valuation of the leading public oil and gas companies and identifies the main factors that contributed to these changes. It establishes that the most significant for comparison and valuation are ratios based on balance sheet values of assets and equity, and EBITDA, DACF and net income ratios are appropriate as auxiliary ratios. The article says that the exchange segment of the industry has increased the debt load, so instead of market capitalization as a component of the coefficients of this group, it is advisable to apply the company's value indicator. Conclusions and Relevance. The article concludes that the market sentiments towards the stock market segment of the global oil and gas industry are getting impaired. This is quite natural against the background of falling profitability of most leading companies. The results of the study can be useful in evaluating, forecasting and developing measures to increase the market capitalization and value of public oil and gas companies.

EBITDA and DACF multipliers as an indicator of investment attractiveness of domestic vertically integrated companies

2021 ◽  
Vol 20 (4) ◽  
pp. 718-752
Author(s):  
Oleg V. SHIMKO
Keyword(s):  
Oil And Gas ◽  
Stock Exchange ◽  
Oil And Gas Industry ◽  
Financial Economic ◽  
Consolidated Financial Statements ◽  
Gas Industry ◽  
Debt Burden ◽  
Fixed Assets ◽  
Settlement Agreements ◽  
Oil And Gas Companies

Subject. The article addresses the EV/EBITDA and EV/DACF ratios of the twenty five largest public oil and gas corporations from 2008 to 2018. Objectives. The purpose is to identify key trends in the value of EV/EBITDA and EV/DACF ratios of biggest public oil and gas corporations, determine factors resulted in the changes over the studied period, and establish the applicability of these multipliers for assessing the business value within the industry. Methods. I apply methods of comparative and financial-economic analysis, and generalization of consolidated financial statements data. Results. The study revealed that EV/EBITDA and EV/DACF multiples are acceptable for valuing oil and gas companies. The EV level depends on profitability, proved reserves, and a country factor. It is required to adjust EBITDA for information on impairment, revaluation and write-off for assets that are reported separately from depreciation, depletion and amortization costs, as well as for income or expenses arising after the sale of fixed assets and as a result of effective court decisions or settlement agreements. It is advisable to adjust DACF for income, expenses and changes in assets and liabilities, which are caused by events that are unusual for oil and gas companies. Conclusions. The application of EV/EBITDA and EV/DACF multiples requires a detailed analysis and, if necessary, adjustments of their constituent components. However, they are quite relevant in the context of declining profitability and growing debt burden in the stock exchange sector of the global oil and gas industry.

scholarly journals DETERMINATION OF THE SUSTAINABILITY OF THE PROJECT PORTFOLIO OF THE OIL AND GAS SECTOR OF THE ECONOMY TO EXTERNAL FACTORS

2021 ◽  
pp. 32-40
Author(s):  
L.S. Leontieva ◽  
◽  
E.B. Makarova ◽  
Keyword(s):  
Oil Recovery ◽  
Portfolio Management ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
External Factors ◽  
Project Portfolio ◽  
Project Portfolio Management ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The oil and gas sector of the economy in many states remains the main source of foreign exchange and tax revenues to the budget. Moreover, its share, for example, in Russia, accounts for about 12 % of all industrial production. However, this sector, as the practice of world oil prices shows, is experiencing not only a rise, but also a decline. Consequently, the problem of forming a balanced portfolio of oil and gas assets is an object of close attention on the part of national oil and gas companies. The issues of choosing the optimal combination of oil and gas assets in the portfolio are no less urgent, especially among the tasks that all oil and gas companies face, both in Russia and abroad. An investment portfolio or a portfolio of oil and gas assets, which includes new projects for the commissioning of fields, as well as measures to enhance oil recovery, and exploration are objects of real investment. The high volatility of the oil and gas industry is influenced by various factors, including: macroeconomic, innovation risks and a number of others. These circumstances stimulate the sector to increase the resilience of its project portfolios in order to respond flexibly to changes. In an increasingly challenging and uncertain environment, oil and gas companies around the world face constant pressures as difficult strategic decisions and building long-term plans lead to a sustainable portfolio. In order to achieve their goals and maximize profitability, companies should apply certain algorithms in their practice. The article substantiates the role and importance of project portfolio management in achieving the goals of the state and companies in the oil and gas sector. The main goal of the article is to build an algorithm that is aimed both at determining the stability of the portfolio and the ability to flexibly respond to changes in the environment. The scientific novelty of the research lies in the determination of an algorithm for assessing the sustainability of a portfolio of projects of oil and gas companies. Application of this algorithm will allow oil and gas companies to take into account the influence of external factors. The research methodology is based on such methods as analysis of internal regulations and reporting of companies for project portfolio management, risk analysis, project ranking; grouping and classification method.

scholarly journals Market valuation of the world's leading public oil and gas corporations as an indicator of investment attractiveness of domestic vertically integrated companies

2021 ◽  
Vol 26 (4) ◽  
pp. 414-433
Author(s):  
Oleg V. SHIMKO
Keyword(s):  
Oil And Gas ◽  
Balance Sheet ◽  
Oil And Gas Industry ◽  
Market Valuation ◽  
Net Income ◽  
Consolidated Financial Statements ◽  
Gas Industry ◽  
Market Capitalization ◽  
Economic Analyses ◽  
Oil And Gas Companies

Subject. This article explores the market valuation ratios of the twenty five leading listed oil and gas companies between 2006 and 2018. Objectives. The article aims to identify key trends in the changes in market valuations of the largest listed oil and gas companies, and identify the factors that have caused these changes. Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements. Results. The article shows certain changes in the main indicators of market valuation of the leading listed oil and gas companies and identifies the main factors that contributed to these changes. It establishes that the most significant for comparison and valuation are ratios based on balance sheet values of assets and equity, and net sales, EBITDA, DACF and net income ratios are appropriate as auxiliary ratios. The article says that the exchange segment of the industry has increased the debt load, so instead of market capitalization as a component of the coefficients of this group, it is advisable to apply the enterprise value indicator. Conclusions and Relevance. The article concludes that the market sentiments towards the stock market segment of the global oil and gas industry are getting impaired. This is quite natural against the background of falling profitability of most leading companies. The results of the study can be useful in evaluating, forecasting and developing measures to increase the market capitalization and value of listed oil and gas companies.

The Financial Significance of the Oil and Gas Sector for the Russian Economy

2012 ◽  
pp. 76-91
Author(s):  
L. Eder ◽  
I. Filimonova
Keyword(s):  
Oil And Gas ◽  
Federal Budget ◽  
Oil And Gas Industry ◽  
International Markets ◽  
Balance Of Payments ◽  
Financial Indicators ◽  
Gas Industry ◽  
Russian Economy ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The article describes the complex of economic and financial indicators reflecting the results of Russia’s oil and gas industry in 2011. Price environment of the major energy resources with regard to their realization at the domestic and international markets is analyzed. Main indicators of economic performance of the oil and gas industry (revenue, profit, profitability) are reviewed with differentiation by companies. The authors consider the tax burden for the oil and gas companies; show their role in forming federal budget revenues. The paper presents the analysis of specialized funds and reserves that are formed at the expense of oil and gas industry sources; examines Russia’s balance of payments as well as revenues generated by oil and gas exports. The stock market structure of Russia and the world is described with consideration of particular oil and gas companies.

Improving Offshore Platform Production With Artificial Intelligence

2021 ◽  
Author(s):  
Philippe Herve
Keyword(s):  
Artificial Intelligence ◽  
Carbon Emissions ◽  
Oil And Gas ◽  
New Technologies ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Carbon Neutrality ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

Abstract The oil and gas sector is facing a changing market with new pressures to which it must learn to adapt. One of the biggest changes in expectations is the increased focus being placed on carbon emissions. Many consumers, investors, and lawmakers see reforms to the oil and gas industry as one of the most important avenues toward reducing carbon emissions and curbing climate change, and accordingly, a large number of companies have already made ambitious pledges towards carbon neutrality. New technologies may offer the best avenue for oil and gas companies to reduce their carbon emissions and meet those neutrality goals. Digital technologies—and in particular, artificial intelligence—can aid in decarbonization even with relatively small investments, primarily by enabling large increases in efficiency and reducing unscheduled downtime and the need for flaring. This paper discusses how artificial intelligence-powered predictive maintenance can be applied to reduce carbon emissions, and a case study illustrating a real-world deployment of this technology.

scholarly journals Problems of Innovative Development of Oil Companies: Actual State, Forecast and Directions for Overcoming the Prolonged Innovation Pause

Energies ◽  
2021 ◽  
Vol 14 (4) ◽  
pp. 837
Author(s):  
Yana Matkovskaya ◽  
Elena Vechkinzova ◽  
Yelena Petrenko ◽  
Larissa Steblyakova
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Graphical Analysis ◽  
Actual State ◽  
Innovative Development ◽  
Gas Industry ◽  
Oil Companies ◽  
Oil Sector ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The study of the rates of innovative development of various sectors of the modern economy makes it possible to determine the existence of a scientific and practical problem, eliciting the need for urgent identification of the reasons for non-innovative development of Oil and Gas Companies and development of the directions for innovation development. Based on a number of methods, including methods of graphical analysis, time series forecasting, construction of linear trends, correlation analysis and scenario forecasting, the authors stated the fact of the serious depth of the problem of innovative insufficiency in the oil sector in comparison with other sectors and they built six scenarios for the development of these companies. The applied methods made it possible to not only come to the conclusion that with the current level of investment in R&D in the oil and gas sector, Oil Companies may find themselves in difficult conditions, especially if breakthrough technologies show themselves in the non-hydrocarbon energy of the future, but also made it possible to determine the most important directions for the development of Oil Companies, including the formation and development of the oil and gas industry 4.0, marketing strategic management of the activities of these companies.

Intangibles and performance in oil and gas industry

2019 ◽  
Vol 57 (5) ◽  
pp. 1267-1285 ◽  
Author(s):  
Vladimir Dženopoljac ◽  
Shahnawaz Muhammed ◽  
Stevo Janošević
Keyword(s):  
Oil And Gas ◽  
Corporate Performance ◽  
Panel Data Analysis ◽  
Market Performance ◽  
Oil And Gas Industry ◽  
Company Performance ◽  
Content Type ◽  
Oil And Gas Companies ◽  
The Impact ◽  
Oil And Gas Sector

Purpose The purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their intangibles. Design/methodology/approach The research utilized publicly available data on global oil and gas companies from 2000 to 2015. Panel data analysis was used to assess the relationship between intangibles (measured by Calculated Intangible Value (CIV)) and financial and market performance of these companies. Findings Results show that intangibles had a significant impact on firm performance in multiple financial measures. Firms’ intangibles also influence their market capitalization, indicating that the financial markets discount such information in their pricing. Research limitations/implications Although the impact of intangibles on corporate performance is found to be significant, the size of that impact is small, suggesting that significant increase in the size of intangibles would only lead to a modest increase in corporate performance. Additionally, the research sample was limited to the top oil and gas firms listed in the Fortune 2000 global list and limits the generalization of the findings. Despite these limitations, the research provides greater confidence in using CIV to assess intangibles in organizations. Practical implications This research highlights the importance and ways of measurement of intangibles for managers in oil and gas companies and its significance for their firms’ performance. Originality/value The paper fills the gap in the literature in the assessment of intangibles in the oil and gas sector, as well as in the assessment of using CIV to measure the impact of intangibles on company performance.

Analyzing the market capitalization and value of the world's leading public oil and gas corporations

2020 ◽  
Vol 26 (8) ◽  
pp. 1870-1892
Author(s):  
O.V. Shimko
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Market Valuation ◽  
Gas Industry ◽  
Market Capitalization ◽  
Long Period ◽  
Main Factors ◽  
Economic Analyses ◽  
Oil And Gas Companies ◽  
Total Market

Subject. This article explores the market capitalization and value of the twenty five largest public oil and gas companies between 2006 and 2018. Objectives. The article aims to define market capitalization and value of the largest public oil and gas companies, identify key trends in their changes within the study period, and identify the factors that have caused these changes. Methods. For the study, I used comparative, and financial and economic analyses, and generalization. Results. The article describes changes in the market capitalization and value of the world's leading public oil and gas corporations and identifies the main factors that affected these changes. Conclusions and Relevance. The article concludes that the total market valuation of the leading public oil and gas corporations has not changed significantly over a long period. But the oil and gas industry has increased the debt load, which negatively affects the companies' market capitalization. The results of the study can be used to evaluate, forecast, and develop measures to create market cap and value of public oil and gas companies.

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