Date of Graduation
5-2018
Document Type
Thesis
Degree Name
Bachelor of Science in Business Administration
Degree Level
Undergraduate
Department
Finance
Advisor/Mentor
Rennie, Craig
Committee Member/Reader
Santamaria, Sergio
Abstract
While oil and gas prices remain volatile and often uncertain, they can provide key insight to businesses within the industry. In fact, oil and gas companies are considered to be more linked to oil prices than other day to day operations. In this paper, I will illustrate the relationship oil prices and crack spreads have on downstream oil and gas companies, specifically Phillips 66. Additionally, the Capital Asset Pricing Model and Fama & French 3-factor Model are evaluated to determine the best method to value a downstream oil and gas company. To do this, I will regress all factors against Phillips 66 to determine if the p-values are statistically significant. From here, the normalized value per share will be calculated. Overall, research conducted in this paper verifies the relationship from the crack spread to profitability and the CAPM model are the best methods to valuing a downstream oil and gas company.
Citation
Robertson, T. (2018). Valuing Downstream Oil & Gas Companies: The Case of Phillips 66. Finance Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/finnuht/42