Main approaches to estimating the cost of shareholder equity of oil and gas producers

2020 ◽  
Vol 26 (3) ◽  
pp. 685-697
Author(s):  
O.V. Shimko
Keyword(s):  
Oil And Gas ◽  
Oil Prices ◽  
Minimum Cost ◽  
Free Cash Flow ◽  
Annual Reports ◽  
Comparative Approach ◽  
Economic Activities ◽  
Advantages And Disadvantages ◽  
Oil And Gas Producers ◽  
The Cost

Subject. The study analyzes generally accepted approaches to assessing the value of companies on the basis of financial statement data of ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Devon Energy, Anadarko Petroleum, EOG Resources, Apache, Marathon Oil, Imperial Oil, Suncor Energy, Husky Energy, Canadian Natural Resources, Royal Dutch Shell, Gazprom, Rosneft, LUKOIL, and others, for 1999—2018. Objectives. The aim is to determine the specifics of using the methods of cost, DFC, and comparative approaches to assessing the value of share capital of oil and gas companies. Methods. The study employs methods of statistical analysis and generalization of materials of scientific articles and official annual reports on the results of financial and economic activities of the largest public oil and gas corporations. Results. Based on the results of a comprehensive analysis, I identified advantages and disadvantages of standard approaches to assessing the value of oil and gas producers. Conclusions. The paper describes pros and cons of the said approaches. For instance, the cost approach is acceptable for assessing the minimum cost of small companies in the industry. The DFC-based approach complicates the reliability of medium-term forecasts for oil prices due to fluctuations in oil prices inherent in the industry, on which the net profit and free cash flow of companies depend to a large extent. The comparative approach enables to quickly determine the range of possible value of the corporation based on transactions data and current market situation.

Environmental liability and asset retirement obligations

2011 ◽  
Vol 51 (2) ◽  
pp. 697
Author(s):  
Michael Clark ◽  
John Claypool
Keyword(s):  
Oil And Gas ◽  
Operating Conditions ◽  
Federal State ◽  
Operating Life ◽  
Oil Companies ◽  
Oil And Gas Producers ◽  
State And Local ◽  
Well Abandonment ◽  
The Cost ◽  
The Impact

Oil companies, partnerships and entities developed for the exploration and/or production of hydrocarbons typically invest for a reasonably certain period of time, with the assets projected to have little or no value at the end of their life cycle. Historically, production facilities were decommissioned as cost effectively as possible, with limited consideration of the cost of this practice being factored into the initial costs or operating budgets, and the salvage value of the scrap metal was applied to cover the cost of the demolition. Today, most oil and gas producers are required to account for the estimated future cost of dismantling and removing facilities and equipment, as well as restoring land to its previous condition. The estimated costs for future dismantling, removal, and restoration are different to other costs associated with the acquisition and use of productive assets. The impact of potential environmental expenses associated with these practices typically occurs after an asset has ceased production. Planning for environmental costs for asset retirement obligations (AROs) is ideally conducted during the asset's operating life. This is so that compliance costs and other operating expenses are recorded consistently in conformance with accounting policies and regulations. Tentatively identified AROs include: asbestos, batteries, PCB transformers, underground or above ground storage tanks, well abandonment, waste impoundments, mercury, and other components of an active producing facility. Operators need to identify specific performance requirements that may impose obligations on their organisation. Federal, state and local requirements need be considered, as they apply to specific operating conditions.

Analyzing the assets of the world’s leading public oil and gas corporations

2020 ◽  
Vol 19 (2) ◽  
pp. 359-373
Author(s):  
O.V. Shimko
Keyword(s):  
Statistical Analysis ◽  
Public Sector ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Annual Reports ◽  
Economic Activities ◽  
Public Companies ◽  
Gas Industry ◽  
The Public ◽  
Oil And Gas Companies

Subject. The article analyzes assets of the largest public companies operating in the oil and gas industry from 2006 to 2018, like ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Devon Energy, Anadarko Petroleum, PAO Gazprom, PAO NK Rosneft, PAO LUKOIL, and others. Objectives. The aim is to make a comprehensive statistical analysis of changes in absolute values and the structure of assets in the public sector of the oil and gas industry. Methods. The study employs methods of statistical analysis and generalization of materials of official annual reports based on the results of financial and economic activities of the largest public oil and gas corporations. Results. Using the comprehensive analysis of balance sheets of 25 oil and gas companies, I determine changes in the size and structure of assets in the public sector of the industry, and establish the main factors that contributed to this transformation. Conclusions. The findings revealed an increase in the book value of assets in the majority of leading public oil and gas companies. Large mergers and acquisitions and agreements for new field developments also contributed to the increase. The study established that the protracted industry crisis resulted in reducing the proportion of current assets in order to release funds for revenue increase. That was why oil and gas companies sought to accelerate the collection of receivables, primarily by means of trade component. It was also determined that they channeled a part of funds thus collected to short-term financial investments.

New Energy Development and Utilization of the China National Offshore Oil Corporation

2011 ◽  
Vol 347-353 ◽  
pp. 1172-1179
Author(s):  
Nan Jun Lai
Keyword(s):  
Development Strategy ◽  
Global Economy ◽  
Oil And Gas ◽  
Oil Prices ◽  
Energy Development ◽  
Oil And Gas Producers ◽  
New Energy ◽  
Fast Development ◽  
Development And Utilization ◽  
Offshore Oil

Oil belongs to nonrenewable resources. With the oil supply relatively limited and the global economy enters a fast development cycle and oil demand is increasing, oil prices rising is inevitable. Impact of high oil prices is deep and continuous, will change our country’s energy production and consumption structure. As China’s largest offshore oil and gas producers, China’s CNOOC must take positive and correct development strategy, and energetically develop and use of in the new energy, and provide high quality energy for our country’s economic and social development. This paper expounds some effort in the field of new energy development and utilization of the China National Offshore Oil Corporation(CNOOC), mainly including wind power development, bio-fuels development, natural gas hydrate recover and so on.

scholarly journals The Foreign Practice of Large Merger & Acquisitions in the Public Sector of the Oil and Gas Industry

2020 ◽  
Vol 25 (1) ◽  
pp. 39-52
Author(s):  
O.V. Shimko
Keyword(s):  
Public Sector ◽  
Oil And Gas ◽  
Oil Prices ◽  
Oil And Gas Industry ◽  
Annual Reports ◽  
Gas Industry ◽  
Share Capital ◽  
Market Capitalization ◽  
The Public ◽  
Control Premium

Subject. The article analyzes 12 major M&A deals in the public sector of the oil and gas industry in 2000–2019. Industry indicators are measured on the basis of data from ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Devon Energy, Anadarko Petroleum, EOG Resources, Apache, Marathon Oil, Imperial Oil, Suncor Energy, Husky Energy, Canadian Natural Resources, Royal Dutch Shell, BP, TOTAL, Eni, Equinor (Statoil), PetroChina, Sinopec, CNOOC, Petrobras, Gasprom, Rosneft Oil Company and LUKOIL. Objectives. I study on what terms M&A are concluded in the public sector of the oil industry and analyze the approval and changes in the current premium for control over the ratio of share capital to market capitalization. The article also evaluates how the above deals influenced the market capitalization of companies. Methods. The study employs methods of statistical analysis and summarizing official annual reports on financial and business performance and news releases of major State-owned oil and gas corporations. Results. Having analyzed 12 major M&A in the public sector of the oil and gas industry comprehensively, I traced trends in terms on which such deals are concluded and determined their consequences. Conclusions and Relevance. In the public sector of the oil and gas industry, M&A are found to depend on capitalization, but also sometimes refer to the difference between the market value of assets and liabilities. In the industry, share capital control premium is noted to grow, thus exceeding half of capitalization. Therefore, the least acceptable factors include a combination of high oil prices, commensuration of companies’ capitalization, compensation for share capital and high control premium. On the contrary, market capitalization significantly improved in case of deals implying the compensation with stocks, which took placed during low oil prices.

scholarly journals METHOD FOR CALCULATING THE COMPOSITION OF CELLULAR CONCRETE

2021 ◽  
pp. 77-85
Author(s):  
V. Martynov ◽  
◽  
O. Martynova ◽  
S. Makarova ◽  
O. Vietokh ◽  
...  
Keyword(s):  
Mathematical Model ◽  
Block Diagram ◽  
Minimum Cost ◽  
Universal Method ◽  
Data Array ◽  
Advantages And Disadvantages ◽  
Cost Of Materials ◽  
The Cost ◽  
Three Factor ◽  
Cellular Concrete

The analysis of existing methods for calculating concrete compositions was carried out. The characteristics and sequence of the calculation-experimental and experimental-calculation methods for the selection of concrete compositions are provided. The advantages and disadvantages of each of the methods are described. These methods are generalized by the general systemic cycle PDCA (Deming cycle), which is determined by the sequence of actions: P (plan) ‒ D (do) ‒ C (check) ‒ A (Action). It was established that for calculating the compositions of the cellular method there is no universal method, which would ensure the achievement of the required strength and average density at the same time. Based on the above, the aim of the thesis was formulated. The aim of the thesis is to develop a method for calculating the composition of cellular concrete, based on experimental-statistical models, which would ensure the production of concrete with the required properties while minimizing the cost of raw materials. A calculation algorithm, a block diagram and a computer program for designing cellular concrete compositions based on experimental-statistical modeling were developed. Using the example of the specified block diagram for calculating concrete compositions, the sequence of calculations is described in detail. The essence of the calculations is that the three-factor mathematical model of the property parameter of cellular concrete, which is supposed to be guaranteed, leads to a second order equation. After that, the roots of the equation are determined. They are substituted into a mathematical model and the composition of concrete is determined in natural values of variable factors. After that, the cost of the composition is determined, which is entered into the data array. Then one of the factors changes, according to the set step and the cycle repeats. At the last stage, the formed data array is processed and the composition with the minimum cost of materials is determined. Testing of the developed software was carried out by processing and calculating a three factor experiment. As a result, the composition of cellular concrete which provides the required strength of foam concrete with a minimum cost of materials, was determined.

Designing the Maximum Permissible Production Cost of Oil and Gas Project Using Control Chart Analysis

2021 ◽  
Author(s):  
Ahmad Abdul Azizurrofi ◽  
Yosef Setya Buana
Keyword(s):  
Control Chart ◽  
Oil And Gas ◽  
Oil Prices ◽  
Oil And Gas Industry ◽  
Production Costs ◽  
Petroleum Exploration ◽  
Maximum Cost ◽  
Cost Of Production ◽  
The Government ◽  
The Cost

Abstract During the period of 2005 to 2020, the oil prices reached the highest level in 2008 (99.67 US$/bbl) and the lowest level in 2020 (39.16 US$/bbl). The fluctuation in oil prices will affect the expenditures for both investment and production in oil and gas projects. Based on this condition, the standardization of the costs of investment and production is needed to help the government and contractor in estimating the costs needed in an oil and gas project. As of December 2018, 471 projects (POD) have been approved by the government of Indonesia. All of them are projects that produce oil (oil projects) and gas (gas projects). In these projects, details of operating (Production) costs are included in the economic evaluation. For the purpose of this paper, Indonesia was divided into 2 areas (Onshore and Offshore). Each of the areas had 2 different types of projects (oil project and gas project). Then, to collect the data related to the cost of production and reserves, the maximum cost of production per BOE was calculated and produced using the Control Chart Analysis method. Lastly, the result was distributed to those aforementioned areas. Based on the evaluation and analysis of the cost of production from 273 oil and gas projects in Indonesia, oil and gas projects in Indonesia are economically acceptable as the maximum cost of production (US$ per BOE) is still far below the oil price (~65 US$/BBL). The following is the estimated Maximum Cost of Production generated in Indonesia: Onshore – Oil Projects (28.00 US$/BOE), Onshore - Gas Projects (12.27 US$/BOE), Offshore - Oil Projects (21.20 US$/BOE), Offshore - Gas Projects (15.95 US$/BOE). Finally, this paper will show how to produce the maximum cost of productions per BOE using control chart analysis. This paper is expected to provide references (method) for the government of Indonesia in giving approval to the cost of production proposed by contractors. In addition, this paper may provide contractors with a quick look at oil and gas industry in Indonesia, especially those who plan to invest in Indonesia. It may also help them create their petroleum exploration and exploitation strategy in Indonesia if they take this information into consideration, which will benefit both the government and contractors.

scholarly journals Assessment of the Impact of the Adverse Economic Geopolitical Environment on the Worth of Russian Oil and Gas Companies

2018 ◽  
Vol 8 (2) ◽  
pp. 30-43 ◽  
Author(s):  
V. S. Lipatnikov ◽  
K. A. Kirsanova
Keyword(s):  
Oil And Gas ◽  
Oil Prices ◽  
Oil Industry ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Market Capitalization ◽  
The Cost ◽  
Oil And Gas Companies ◽  
The Impact ◽  
Oil Company

The relevance of the chosen topic is connected to the fact that in the conditions of value-based management, market capitalization acts as a key indicator of the company efficiency. At the present time, when the Russian oil and gas industry has become the object of international sectoral sanctions, the identification of the impact of these sanctions on the domestic oil and gas companies’ value is of great practical importance. The article considers the cost of oil and gas companies and the impact of sectoral sanctions and negative dynamics of oil prices. The study was conducted using econometric modeling tools. For analysis 4 of the oil company with the largest market share, namely PJSC “Rosneft Oil Company”, PJSC “LUKOIL”, JSC “Gazprom Neft” and PJSC “Tatneft”, which in the aggregate represent 62% of the entire Russian oil industry, were selected. The features of valuation of Russian oil and gas companies are covered. The sanctions in the oil and gas industry of the Russian Federation are considered, the consequences of their introduction and the fall of the world oil price are analysed. The analysis to determine the impact of the cost of oil and gas companies from international sanctions and oil prices. It was found that in the oil industry market capitalization depends directly on the price of oil, and in the gas industry this impact is absent. It was discovered that due to the low level of oil prices, the sanctions did not have a significant influence on the cost of oil and gas companies. 

A generalized fuzzy cost efficiency model

2020 ◽  
Vol 54 (6) ◽  
pp. 1775-1791
Author(s):  
Nazila Aghayi ◽  
Samira Salehpour
Keyword(s):  
Cost Efficiency ◽  
Minimum Cost ◽  
Extensive Literature ◽  
Data Envelopment ◽  
Fuzzy Environment ◽  
Decision Making Unit ◽  
Production Possibility Set ◽  
Fuzzy Cost ◽  
The Cost ◽  
Generalized Cost

The concept of cost efficiency has become tremendously popular in data envelopment analysis (DEA) as it serves to assess a decision-making unit (DMU) in terms of producing minimum-cost outputs. A large variety of precise and imprecise models have been put forward to measure cost efficiency for the DMUs which have a role in constructing the production possibility set; yet, there’s not an extensive literature on the cost efficiency (CE) measurement for sample DMUs (SDMUs). In an effort to remedy the shortcomings of current models, herein is introduced a generalized cost efficiency model that is capable of operating in a fuzzy environment-involving different types of fuzzy numbers-while preserving the Farrell’s decomposition of cost efficiency. Moreover, to the best of our knowledge, the present paper is the first to measure cost efficiency by using vectors. Ultimately, a useful example is provided to confirm the applicability of the proposed methods.

What Does Rent Give to Federal Budget (on the Russia's Budget Dependence upon "Oil Dollars")

2004 ◽  
pp. 51-69 ◽  
Author(s):  
E. Sharipova ◽  
I. Tcherkashin
Keyword(s):  
Oil And Gas ◽  
Strong Dependence ◽  
Oil Prices ◽  
Federal Budget ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Resource Rent ◽  
Tax Legislation ◽  
Russian Economy ◽  
The Government

Federal tax revenues from the main sectors of the Russian economy after the 1998 crisis are examined in the article. Authors present the structure of revenues from these sectors by main taxes for 1999-2003 and prospects for 2004. Emphasis is given to an increasing dependence of budget on revenues from oil and gas industries. The share of proceeds from these sectors has reached 1/3 of total federal revenues. To explain this fact world oil prices dynamics and changes in tax legislation in Russia are considered. Empirical results show strong dependence of budget revenues on oil prices. The analysis of changes in tax legislation in oil and gas industry shows that the government has managed to redistribute resource rent in favor of the state.

TRANSFER FİYATLAMA UYGULAMASININ İŞLETME PERFORMANSINA ETKİSİ VE VERGİSEL AÇIDAN DEĞERLENDİRİLMESİ

2014 ◽  
Vol 1 (2) ◽  
pp. 187
Author(s):  
Serdar KUZU
Keyword(s):  
Business Performance ◽  
Transfer Pricing ◽  
Tax Law ◽  
Economic Activities ◽  
Tax System ◽  
Goods And Services ◽  
Tax Legislation ◽  
International Transactions ◽  
The Cost ◽  
The Impact

The size of international trade continues to extend rapidly from day to day as a result of the globalization process. This situation causes an increase in the economic activities of businesses in the trading area. One of the main objectives of the cost system applied in businesses is to be able to monitor the competitors and the changes that can be occured as a result of the developments in the sector. Thus, making cost accounting that is proper according to IAS / IFRS and tax legislation has become one of the strategic targets of the companies in most countries. In this respect, businesses should form their cost and pricing systems according to new regulations. Transfer pricing practice is usefull in setting the most proper price for goods that are subject to the transaction, in evaluating the performance of the responsibility centers of business, and in determining if the inter-departmental pricing system is consistent with targets of the business. The taxing powers of different countries and also the taxing powers of different institutions in a country did not overlap. Because of this reason, bringing new regulations to the tax system has become essential. The transfer pricing practice that has been incorporated into the Turkish Tax System is one of the these regulations. The transfer pricing practice which includes national and international transactions has been included in the Corporate Tax Law and Income Tax Law. The aim of this study is to analyse the impact of goods and services transfer that will occur between departments of businesses on the responsibility center and business performance, and also the impact of transfer pricing practice on the business performance on the basis of tax-related matters. As a result of the study, it can be said that transfer pricing practice has an impact on business performance in terms of both price and tax-related matters.

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