Exploring Valuation Differences Between Upstream and Midstream Sectors of the U.S. Oil and Gas Industry

Abstract

The U.S. Oil and Gas business is very cyclical in nature where the price of the commodities can alter the valuation of the varios sectors. This paper analyzes the difference between upstream and midstream company valuation with regards to bond yields, beta, and capital structure. Statistical analysis is used to evaluate the data collected on the subject. The paper views whether or not these measures are effected similarly when prices drop during a crisis.