| .S. publicly held oil and gas exploration and development companies (OGEs) are allowed to report exploration and development costs under either the successful efforts (SE) or the full cost pool (FC) method, which results in a lack of comparability between the financial statements. In an attempt to eliminate information asymmetry, OGEs are required to disclose detailed information about proved reserves, including the discounted present value of future cash flows from proved reserves. Quantitative research methods utilizing multiple regression analysis techniques were used to examine whether the present value of future cash flows from proved reserves discounted at 10% (PV-10) and reserve quantity disclosures had a predictive effect on changes in stock prices. The sample consisted of all U.S. publicly held OGEs with annual revenues of over... |
