Equity valuation of petroleum exploration and production firms using alternative accounting methods

Thesis/Dissertation · Tue Jan 01 00:00:00 EST 1985

OSTI ID:5599814

Bergevin, P M

The purpose of this study was to determine if investors placed a different value on the earnings numbers generated by the full-cost accounting method and the successful-efforts accounting method. The research design classified petroleum exploration and production firms into either the full-cost group or the successful-efforts group, depending upon how a firm accounted for nonproductive oil wells. Litzenberg and Rao's equity-valuation model was then used to test whether investors placed a different value on the earnings, the earnings' risk, and the earnings' growth numbers of full-cost firms and successful-efforts firms. Regression results indicated that, on an overall basis, investors placed different values on the earnings categories of full-cost firms and successful-efforts firms. However, when the earnings, risk, and growth terms were examined separately, no significant differences were found between the full-cost firms and the successful-efforts firms.

• Research Organization: Arizona State Univ., Tempe (USA)
• OSTI ID: 5599814
• Resource Relation: Other Information: Thesis (Ph. D.)
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
29 ENERGY PLANNING
POLICY AND ECONOMY
PETROLEUM INDUSTRY
ACCOUNTING
EVALUATION
EXPLORATION
INVESTMENT
PRODUCTION
REGRESSION ANALYSIS
INDUSTRY
MATHEMATICS
STATISTICS
020700* - Petroleum- Economics
Industrial
& Business Aspects
294002 - Energy Planning & Policy- Petroleum
290200 - Energy Planning & Policy- Economics & Sociology