Oil & Gas Valuations: Sailing The Gulf Of Biden

Oil & Gas Valuations: Sailing The Gulf Of Biden

Share to Linkedin Like a small boat navigating a big sea, oil & gas valuations are impacted by a plethora of factors that can change almost instantly. Some factors help in arriving at a shareholder's destination, others do not. Some factors the crew can control, others not so much (and some factors are more predictable than others). As this vessel heads for the destination shores of high returns, it must navigate through natural economic influencers such as production risk, commodity prices, supply logistics and demand changes. In addition, it also must face regulatory shifts that the Biden Administration is and could generate in the future such as tax changes, policy shifts and more. Most likely, these policies will create some volatility and headlines, but in the aggregate will not change valuations much. Let us examine a few of these regulatory items and how they might change the course of an oil and gas company's valuation going forward. There are several recent policy actions, and some that are being debated that are affecting the industry, primarily by disincentivizing new U. S. production. Actions already taken include a moratorium on federal oil & gas drilling permits and a construction stoppage of the