Shareholder Valuations of Petroleum Companies and Oilfield Services During the 2008 and 2014 Oil Price Shocks
Journal of Finance and Accounting
Volume 4, Issue 6, November 2016, Pages: 367-377
Received: Oct. 10, 2016; Accepted: Oct. 25, 2016; Published: Dec. 2, 2016
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Ruud Weijermars, Harold Vance Department of Petroleum Engineering, Texas A & M University, College Station, USA
Anita Bressan Bocardo, Harold Vance Department of Petroleum Engineering, Texas A & M University, College Station, USA; State University of Santa Catarina (UDESC), Balneário Camboriú, Santa Catarina, Brazil
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This study analyzes the impact of the 2008 and 2014 oil price falls on the shareholder returns of diversified oil and gas majors, Canadian oil sands producers, US shale oil and gas producers and oilfield service companies. The 2008 an 2014 oil price shocks lead to capital book losses for investor TSR at year end. In both years, the TSR losses were disproportionately large as compared to the actual slow down (which was very modest) in retained earnings growth. Our recommendation is that investors should not only use P/E ratios to identify value growth stock investment opportunities. An alternative methodology quantifies the degree of speculative valuation involved in the TSR component of capital gains (losses). When negative speculative valuations are large, future TSR growth is most likely. Companies that want to mitigate unwarranted erosion of their market capitalization due to stock price declines should ramp up advertorial efforts and point out value growth opportunities to attract investors, especially in times of depressed stock prices.
Total Shareholder Return, Capital Gains, Dividends, Retained Earnings, Speculative Valuation
To cite this article
Ruud Weijermars, Anita Bressan Bocardo, Shareholder Valuations of Petroleum Companies and Oilfield Services During the 2008 and 2014 Oil Price Shocks, Journal of Finance and Accounting. Vol. 4, No. 6, 2016, pp. 367-377. doi: 10.11648/j.jfa.20160406.17
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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