Why Price E&P Asymmetry? | CurveAlpha. Volatility Adjusted E&P Valuation

Why Price the Asymmetry from Probable O&G Volatility?

Traditional E&P Valuation & the Volatility Adjusted Valuation can Diverge by 50%+

The Transition from O&G Optionality to Cashflow Stability is not Linear or Constant & Varies by E&P Asset

The same FCF Yield, EV/EBITDA, P/NAV, DCF or ROCE can be a different Volatility Wager and or have a significantly dissimilar Volatility Adjusted Valuation!

Want to Outperform the O&G Curve? Then Price the O&G Volatility Exposure

In 70% of M&A Deals, either the Buyer or Seller Significantly Misprices the Assumed O&G Volatility Exposure

The consequence of mispricing the O&G Volatility Exposure is underperformaing the O&G Curve, XOP and or SPY
This makes sense, as O&G Risk is being taken inefficiently