Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105100
Authors: 
Misund, Bård
Osmundsen, Petter
Sikveland, Marius
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5061
Abstract: 
This paper studies financial statement information from the 50 largest international oil and gas companies during 1992 to 2011 and evaluates their relation to market values. In particular, we examine how this relationship is affected by accounting method choice (successful efforts versus full cost accounting) and vertical integration. We find that net income is more value relevant for full cost companies compared to companies that use the successful efforts accounting method. Furthermore, the value relevance of oil and gas reserves is different among successful efforts and full cost companies. Larger reserves among successful efforts companies are awarded a premium by stock markets. The value relevance of book value is significantly lower for integrated companies than for pure upstream companies. We also find that the value relevance of oil and gas reserves is different for upstream and integrated companies.
Subjects: 
company valuation
value-relevance
financial analysis
oil and gas industry
JEL: 
F23
G00
L71
M41
Document Type: 
Working Paper

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