Forum Search: oil gas

Oil and Gas Valuation
Ware there any rules of thumbs for valuing oil and gas reserves in the ground on both P1, P2 and P3 bases? Such that there are 100m barrles in the ground, what is it worth? Are assumptions made on how is extractabel etc? Same things for gas. Would appreicate a rule of thumb as well as overview ... Read More
Go to post added 10 years ago
Re: BS line item treatment for determining TEV
Restricted cash, whether for covenants or LOC or escrow, etc would be treated as part of the required minimum cash balance in your financial model. For purposes of TEV, the standard practice is to take total debt less cash on the BS (i.e. entire cash balance), so the short answer is, no, do not incl... Read More
Go to post added 7 years ago
Re: Gain/Loss on Derivative for Oil & Gas Company
It shouldn't matter. Non-cash gains /losses are typically due to mark to market and go through OCI as they are likely classified as AFS securities and shouldn't change original analysis.
Go to post added 8 years ago
Re: Gain/Loss on Derivative for Oil & Gas Company
Should the fact that gains/losses are non-cash items have any impact on our decision?
Go to post added 8 years ago
Re: Gain/Loss on Derivative for Oil & Gas Company
Historically, we typically do not adjust because it is considered recurring. Exceptions might be one-time shock events, but even then, it depends because chances are their comps will have similar impact. Exceptions apply of course - if one company hedges a lot and one doesn't, then you might want to... Read More
Go to post added 8 years ago
Gain/Loss on Derivative for Oil & Gas Company
For oil and gas companies, should we not adjust out gains/losses on derivatives that are used for hedging purposes given that such companies engage in such transactions consistently?
Go to post added 8 years ago
Re: TEV
For traditional definition of TEV please refer to our Corporate Valuation class: Equity Value (market value) + Total Debt (financial interest bearing negotiated securities) - Cash (should be excess cash but most people use total cash) + Preferred + Minority Interest (or NCI). For specific sub-... Read More
Go to post added 8 years ago
stock trading
Here's a question that was posed to us: "in my financial markets class, we have a mock trading competition going on, and whomever wins at the end of the semester (70 or so days) will get a 10% increase in total points for the semester, which could potentially boost the grade up a letter. i, obviousl... Read More
Go to post added 10 years ago
Re: Reference Range: Valuation of other industries
The current industry models that are available: Banking Insurance Real Estate (REIT) Oil & Gas coming very soon Alternative Energy coming very soon. Unfortunately, they are not yet in our online format. For more information, see: http://www.wallst-training.com/topics.html
http://www.wstselfstudy.com/packageindustry.html
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Go to post added 10 years ago
Re: Oil and Gas Valuation
Rarjoon, Oil & gas companies typically use a Net Asset Value (NAV) calculation to derive the value of all their reserves. As you mentioned, reserves are typically categorized as 1P, 2P, or 3P, representing roughly 90%, 50%, and 10% recovery probabilities, respectively. However, a number of geol... Read More
Go to post added 10 years ago
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