Date of Award

2021

Document Type

Dissertation

Degree Name

Ph.D.

First Advisor

Tracy Xu

Second Advisor

Jack Strauss

Third Advisor

Ronald Rizzuto

Keywords

Asset pricing, Hotelling, Natural resources, Oil and gas

Abstract

The Hotelling Valuation Principal (HVP) implies that the value per unit of an in-ground exhaustible natural resource is equal to the current price less the cost of production. The assumptions required for this principle include a certain and homogenous reserve stock, unconstrained extraction, and constant costs. Extensive research has empirically investigated the HVP. This paper expands the HVP framework and relaxes the theory’s assumptions to account for reserve differentials. The results show that the original net price model is more closely aligned with developed reserve value, than total reserve value. In addition, this paper develops two- and three-factor net price models to incorporate user cost, extraction capacity and the risk of developing and producing oil and gas reserves.

Publication Statement

Copyright is held by the author. User is responsible for all copyright compliance.

Provenance

Received from ProQuest

Rights holder

Brian K. Hicks

File size

75 pgs

File format

application/pdf

Language

en

Discipline

Finance, Economics

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