Details

Autor(en) / Beteiligte

• Thapa, Anul
• Zahniser-Word, Jake

Titel

Recognizing the Value of Real Options

Ist Teil von

• American Bankruptcy Institute journal, 2024-10, Vol.43 (10), p.26-53

Ort / Verlag

Alexandria: American Bankruptcy Institute

Erscheinungsjahr

2024

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• The economic fortunes of oil and gas exploration and production (E&P) companies are tied to commodity prices, which can be volatile and cyclical, as shown in Exhibit 1. [...]it is not surprising that the outlook for oil and gas prices plays a pivotal role in the valuation of these companies, both in and out of the bankruptcy context. An unsecured creditor may either be positioned to receive significant recovery and upside potential upon emergence, or have the value of its claim be fully impaired depending on the accepted valuation of the enterprise. [...]valuations from various interested parties involved in the bankruptcy proceeding are often heavily scrutinized and fiercely contested. Under this category, net-asset-value (NAV) techniques that measure the value of the company's assets are frequently utilized in valuations of E&P companies. Since oil and gas reserves are an E&P company's primary assets, the NAV measures the value of these reserves, which are classified into various categories based on the likelihood or prob ability of successful development and extraction. There is still time for Apple's stock price to increase above the strike price, resulting in a gain or the option being "in the money."