Reserve asset values and the "hotelling valuation principle"
Author(s)Adelman, Morris Albert; Watkins, G. C.
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.
MIT Center for Energy and Environmental Policy Research
Working paper (Massachusetts Institute of Technology. Center for Energy Policy Research) ; MIT-CEPR 92-004.