Accounting for Uncertainty in Discounted Cash Flow Valuation of Upstream Oil and Gas Investments

William H Knull III William H Knull III, Mayer Brown Rowe & Maw LLP. William Knull is co-chair of the International Arbitration Group of Mayer Brown Rowe & Maw LLP ([email protected]). Scott T Jones, Senior Managing Director, Lexecon, an FTI Company ([email protected]). Scott Jones is also head of the energy practice for FTI Consulting Inc. Timothy Tyler ([email protected]) is counsel and Richard Deutsch ([email protected]) is an associate in the International Arbitration Group of Mayer Brown Rowe & Maw LLP.

Scott T Jones William H Knull III, Mayer Brown Rowe & Maw LLP. William Knull is co-chair of the International Arbitration Group of Mayer Brown Rowe & Maw LLP ([email protected]). Scott T Jones, Senior Managing Director, Lexecon, an FTI Company ([email protected]). Scott Jones is also head of the energy practice for FTI Consulting Inc. Timothy Tyler ([email protected]) is counsel and Richard Deutsch ([email protected]) is an associate in the International Arbitration Group of Mayer Brown Rowe & Maw LLP.

Timothy J Tyler William H Knull III, Mayer Brown Rowe & Maw LLP. William Knull is co-chair of the International Arbitration Group of Mayer Brown Rowe & Maw LLP ([email protected]). Scott T Jones, Senior Managing Director, Lexecon, an FTI Company ([email protected]). Scott Jones is also head of the energy practice for FTI Consulting Inc. Timothy Tyler ([email protected]) is counsel and Richard Deutsch ([email protected]) is an associate in the International Arbitration Group of Mayer Brown Rowe & Maw LLP.

Richard D Deutsch William H Knull III, Mayer Brown Rowe & Maw LLP. William Knull is co-chair of the International Arbitration Group of Mayer Brown Rowe & Maw LLP ([email protected]). Scott T Jones, Senior Managing Director, Lexecon, an FTI Company ([email protected]). Scott Jones is also head of the energy practice for FTI Consulting Inc. Timothy Tyler ([email protected]) is counsel and Richard Deutsch ([email protected]) is an associate in the International Arbitration Group of Mayer Brown Rowe & Maw LLP.

Abstract

The discounted cash flow method of valuing upstream properties in calculating damages in international arbitration is now widely accepted. However, an essential component of that process—accounting for the risk that projected revenues would not have been received—remains poorly understood and has been at best incompletely explained in the few reported arbitral decisions to have addressed the issue at all. The result is a lack of predictability and transparency on an issue that can dramatically affect damage awards, creating actual and potential problems for parties, advocates, arbitrators and the legitimacy of the arbitral process alike. This article will address applicable economic principles in the context of the legal rules defining damages and examine the treatment of the issue in the principal arbitration decisions.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Order Reprints Request Corporate Permissions

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

Request Academic Permissions

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.

Accounting for Uncertainty in Discounted Cash Flow Valuation of Upstream Oil and Gas Investments

Information for

Open access

Opportunities

Help and information

Accounting for Uncertainty in Discounted Cash Flow Valuation of Upstream Oil and Gas Investments

Abstract

Reprints and Corporate Permissions

Academic Permissions

Related research

To cite this article:

Download citation

Information for

Open access

Opportunities

Help and information

Keep up to date

Your download is now in progress and you may close this window

Login or register to access this feature