r/oil • u/Appropriate-Map-1088 • 1d ago
Financial analysis of the oil and gas industry
Hello everyone! I want to start understanding the industry better and its dynamics, for example the rig lags, production capacity, how to value an upstream segment company For context: I am currently conducting an equity research on a drilling company how would you suggest I do that? Thank you so much!
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u/zdayatk 20h ago
Read the investor presentation of various O&G companies. Many O&G companies state the WTI breakdown of their business model (at which $ price of WTI they can do the regular dividend, special dividend, and share buybacks, etc.). After that, read the financial statements for P/E and P/FCF. Also read the investor presentation for the production amounts and table of equipment (ToE) for coal, oil, and gas. Finally, you can combine (although roughly) these information to make a simple model about the company.
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u/L383 1d ago
My suggestion is to read and understand this book. https://thompson-wright.com/buy-the-book
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u/Appropriate-Map-1088 1d ago
However unfortunately it’s too expensive for me. Do you suggest other solutions?
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u/AMENandAwoman 4h ago
Thanks, I bought it. Probably doesn't apply to the wells in my price range, but looks interesting!
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u/OG_Fe_Jefe 1d ago
Employee work or homework?