Date of Graduation


Document Type


Degree Name

Bachelor of Science in Business Administration

Degree Level





Rennie, Craig

Committee Member/Reader

Santamaria, Sergio


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.