Reserve asset values and the "hotelling valuation principle"
Name
28596223.pdf
Size
547.4 KB
Format
Adobe PDF
Checksum (MD5)
a9025fc7d508557d8c82a286b90cc984
Author(s)
Adelman, Morris Albert
Watkins, G. C.
Date Issued
1992
Publisher
MIT Center for Energy and Environmental Policy Research
Series/Report no.
Working paper (Massachusetts Institute of Technology. Center for Energy Policy Research) ; MIT-CEPR 92-004.
Abstract
The Hotelling Valuation Principle, that the in-situ value of a mineral unit equals the current net price, is a special case of a more general relation. Tested against a set of recent Canadian sales of oil and gas reserves, the HVP is strongly rejected. The method permits also a demonstration that price expectations were quite different in oil and in gas, confirming industry opinion.
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