Factors of Value of Oilfield Service Companies

In this paper, we consider factors that influence the valuation of the largest oilfield service companies in the period from 2010 to 2015. The main aspects of the oilfield service industry activity over the past few years have been highlighted in the context of low oil prices and unfavorable economic conditions. The relevance of the problem lies in finding and identifying new components effecting the valuation of companies that cannot be accounted in traditional valuation methods. Accounting for these factors in the examination, firstly, will allow qualitatively determine the value of oilfield service companies, therefore, we will see the real results of their operating activities. Secondly, it will give investors detailed information about the conditions and trends in the industry, which will help them to make the right investment choice. In the beginning of investigation, we have made a review of the Russian oilfield services market and an analysis of the conditions and prospects of the global oilfield services market. The second part contains a comparative analysis of traditional methods and approaches to the assessment of the largest Russian and foreign companies. Then we provide a review of the main literature on the identification of factors and methods for assessing enterprises involved in providing oilfield services. Finally, regression analysis was conducted to identify the relationship between the market valuation of the largest oilfield services companies and the main factors identified by us. The results of the research have revealed that the market of oilfield services is quite dependent on the cost of oil products. It was shown that the companies’ revenue is clearly positively correlated with the market value of oilfield service corporations because of the fact that this variable is the result of the annual operating activity of an enterprise.