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Financial Analytics: Science and Experience
 

Market capitalization and enterprise value of the world's leading publicly traded oil and gas corporations as an indicator of the investment attractiveness of domestic vertically integrated oil and gas companies

Vol. 15, Iss. 4, DECEMBER 2022

Received: 28 February 2022

Received in revised form: 10 March 2022

Accepted: 19 March 2022

Available online: 29 November 2022

Subject Heading: ECONOMIC AND STATISTICAL RESEARCH

JEL Classification: G32, L25, L71, M41, O12

Pages: 419434

https://doi.org/10.24891/fa.15.4.419

Oleg V. SHIMKO Center for Innovative Economics and Industrial Policy, Institute of Economics of Russian Academy of Sciences (IE RAS), Balashikha, Moscow Oblast, Russian Federation
shima_ne@mail.ru

https://orcid.org/0000-0002-0779-7097

Subject. The article considers the market capitalization and the enterprise value of the twenty five leading publicly traded oil and gas companies within 2006 through 2018.
Objectives. The aim of the study is to determine the current level of values of the market capitalization and the enterprise value of the leading publicly traded oil and gas companies, as well as identify the key trends in their changes within the studied period, and identify the factors that have caused these changes.
Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements.
Results. The article determines the changes in the market capitalization and enterprise value of the leading publicly traded corporations in the industry, and identifies the main factors that contributed to the transformation. A decrease in market capitalization was revealed. Comparison of corporations from the USA, Canada, Europe, China, Brazil and Russia shows the country factor impact. The market valuation of independent companies is more affected by changes in oil prices than the capitalization of integrated corporations. Large transactions with assets cause a change in the balance sheet value of equity capital and can affect capitalization. It is established that the period under review is characterized by an increase in the total net debt of companies. This serves as a negative factor for the total market valuation.
Conclusions. The aggregate market valuation of the leading publicly traded oil and gas corporations does not get changed significantly over an extended period. But the industry increases the debt burden, which negatively affects the market capitalization of companies.

Keywords: market cap, enterprise value, net debt, common share, preferred share

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