AN ASSESSMENT OF THE EFFECT OF NEWS ANNOUNCEMENTS ON STOCK PRICES OF OIL AND GAS PRODUCING COMPANIES

This empirical study is concerned with the extent to which news announcements affect the performance of common equity securities of oil and gas producing companies. The market effects of news announcements are considered to be of importance in resolving two issues. One concerns financial statement disclosure and the second concerns examination of prior oil and gas industry-related accounting research.;In the first design, security return information for individually-analyzed companies, the security market and the oil and gas industry segment are used to determine the market impact of news announcements. Regression analysis was used to determine whether significant differences exist between the two sets of returns.;In the second design, individual companies' security returns, overall security market return and industry return data are used. Four nominal data categories are added to the market-type regression analyses. These categories represent financial, personnel, explorational, and developmental and operational announcements. Regression analysis was used to determine the significance of the announcement-types.;The following conclusions were made (1) news announcements concerning explorational activities and developmental and operational activities of nonintegrated oil and gas producing companies are rapidly reflected in companies' security prices (since these two announcement-types are related primarily to information concerning changes in reserve quantities, it appears that investors do seek and respond to reserve quantity information), and (2) since security prices of oil and gas producers do appear to respond to news announcements, researchers engaged in market-type analyses of individual oil and gas producing companies' securities should expand their research to include examination of the company-related news announcements appearing during their research period.;This dissertation assumes capital market efficiency and addresses two research questions: do news announcements concerning activities of nonintegrated oil and gas producing companies affect the companies' common stock prices, and are announcements concerning nonintegrated oil and gas companies' financial, personnel, explorational, and developmental and operational activities used equally by investors in their decision-making?...