Oil Drilling & Gas Extraction in the US - Industry Risk Rating Report

Oil Drilling & Gas Extraction in the US - Industry Risk Rating Report

INDUSTRY RISK RATINGS REPORT

This is the replacement for August 2009 edition of Oil Drilling & Gas Extraction in the US Industry Risk Ratings Report.

Industry Risk Ratings Synopsis

This Industry Risk Ratings report from IBISWorld evaluates the inherent risks associated with the Oil Drilling & Gas Extraction in the US industry. Industry Risk is assumed to be 'the difficulty, or otherwise, of the business operating environment'.

The report looks at the operational risk associated with this industry. Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk).

This approach is new in that it analyses non-financial information surrounding each industry. Industries are scored on a 9-point scale, where 1 represents the lowest risk and 9 the highest. The Industry Risk score measures expected Industry Risk over the coming 12-18 months.

Industry Definition

Firms in the Oil Drilling & Gas Extraction industry operate and/or develop oil and gas field properties. These activities may include exploration for crude petroleum and natural gas; drilling, completing, and equipping wells; operating separators, emulsion breakers, desilting equipment, and field gathering lines for crude petroleum and natural gas; and all other activities in the preparation of oil and gas up to the point of shipment from the producing property. This industry includes the production of crude petroleum, the mining and extraction of oil from oil shale and oil sands, and the production of natural gas, sulfur recovery from natural gas, and recovery of hydrocarbon liquids. Firms in this industry include those that operate oil and gas wells on their own account or for others on a contract or fee basis.

Report Contents

Risk Overview

The Risk Overview chapter includes sections on Industry Definition and Activities, Industry Risk Score and Risk Rating Analysis. The Industry Definition and Activities section provides a detailed definition of the activities carried out by operators in this industry as defined in NAICS. A list of the primary activities of the industry is also included. The Industry Risk Score section provides the Overall Industry Risk Score as well as the Risk Scores for each of the three types of risk covered that combine to form the Overall Industry Risk Score. These three types of risk are Structural Risk, Growth Risk and External Sensitivity Risk. The Risk Rating Analysis section discusses the underlying factors contributing to the Overall Industry Risk Score.

Structural Risk

The Structural Risk chapter looks at risk arising from within the industry itself and provides a detailed discussion of the industry’s level of exposure to seven key indicators. These key indicators are Barriers to Entry, Competition, Industry Exports, Industry Imports, Level of Assistance, Life Cycle Stage and Volatility of Industry. The Overall Structural Risk Score is a weighted aggregation of these seven key indicators. Each of the key indicators is discussed in detail in this section.

Growth Risk

The Growth Risk chapter looks at risks arising from the expected future performance of the industry. The Overall Growth Risk Score is determined by amalgamating the scores for Recent Industry Growth and Forecast Industry Growth. Detailed analysis is provided discussing the reasons for the growth scores of both.

Sensitivity Risk

The Sensitivity Risk chapter looks at risks arising from forces (sensitivities) external to the industry. The Overall External Sensitivity Risk Score is determined by identifying the most significant (up to 6) external factors and weighting them to represent how significant each sensitivity is to the performance of the industry. Examples of External Sensitivities are Exchange Rates, Interest Rates, Commodity Prices and Government Regulations. There is also a detailed analysis of the affect each of the sensitivities has on the industry, including charts and data tables where appropriate.

Industry Risk and Industry Risk Scoring Methodology

This chapter provides an overview of how IBISWorld defines Industry Risk and discusses the methodology used to arrive at an Industry Risk Score. There is also a table that provides a definition of the seven levels of Industry Risk.

21111 - Oil Drilling & Gas Extraction in the US
48611 - Oil Pipeline Transportation in the US
48621 - Gas Pipeline Transportation in the US
42271 - Gasoline & Petroleum Bulk Stations in the US
42272 - Gasoline & Petroleum Wholesaling in the US
22121 - Natural Gas Distribution in the US
32411 - Petroleum Refining in the US

RISK OVERVIEW

Industry Definition & Activities
Industry Risk Score
Risk Rating Analysis

STRUCTURAL RISK

Barriers to Entry
Basis of Competition
Domestic and International Markets
Industry Assistance
Life Cycle
Industry Volatility

GROWTH RISK

Recent Growth Analysis
Forecast Growth Analysis

SENSITIVITY RISK

World Price - Energy - Crude Oil
World Price - Energy - Natural Gas
Real GDP Growth
Energy Resources - Domestic Proved Oil Reserves
Energy Resources - Dry Natural Gas Proved Reserves

INDUSTRY RISK AND INDUSTRY RISK SCORING METHODOLOGY

What is Industry Risk?
The Industry Risk Scoring Methodology
Risk Rating Score Definition