Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/194725 
Year of Publication: 
2017
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 5 [Issue:] 1 [Publisher:] Taylor & Francis [Place:] Abingdon [Year:] 2017 [Pages:] 1-17
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Oil and gas reserves are the most important assets of oil and gas companies. A source of confusion for investors in oil companies, is that reserves quantities and values are uncertain estimates. Reserves are typically classified according to probabilities of recovery from underground reservoirs. All US-listed companies are required to disclose proved reserves but not probable reserves, thus leaving out potentially important information for investors and financial analysts. This study addresses the impact on market valuation of various classifications of reserves amounts. Using a data sample of 94 companies that do disclose information on probable reserves, we compare the relation between three classifications of reserves and oil company returns. While we find that information on probable reserves do not have an impact on stock returns measured over the entire time period, this is not the case since 2009, coinciding with the onset of the shale gas revolution.
Subjects: 
oil and gas reserves
proved reserves
probable reserves
value relevance
oil company valuation
stock returns
valuation
Shell
Exxon
Chevron
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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