What was the Brent oil price assumption used by Petro Stopping Center in 2023 for 2024?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Management's best estimate of oil and natural gas price assumptions for value-inuse impairment testing were revised during 2024. The revised price assumptions have been rebased in real 2023 terms and are materially consistent with the disclosed prices in real 2022 terms. The near term Brent oil assumption was held constant at $70 per barrel to reflect near-term supply constraints before declining after 2030 to $50 per barrel by 2050 continuing to reflect the assumption that as the energy system decarbonizes, falling oil demand will cause oil prices to decline. The price assumptions for Henry Hub gas up to 2050 were held constant at $4.00 per mmBtu reflecting an assumption that declining domestic demand in the US is offset by higher LNG exports.
| 2023 price assumptions | 2024 | 2025 | 2030 | 2040 | 2050 |
|---|---|---|---|---|---|
| Brent oil ( |
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the company's 2023 price assumption for Brent oil in 2024 was $71 per barrel. This figure is part of a broader set of assumptions used for value-in-use impairment testing, which helps Petro Stopping Center assess the recoverable amount of its assets. These assumptions are rebased in real 2023 terms and are consistent with prices disclosed in real 2022 terms.
Petro Stopping Center held the near-term Brent oil assumption constant at $70 per barrel to reflect near-term supply constraints. After 2030, the company anticipates a decline to $50 per barrel by 2050, reflecting the expectation that decarbonization will reduce oil demand and, consequently, oil prices. The price assumptions for Henry Hub gas were held constant at $4.00 per mmBtu up to 2050, based on the assumption that declining domestic demand in the U.S. will be offset by increased LNG exports.
These assumptions are derived from central case investment appraisal assumptions and represent management's best estimate of future prices at the balance sheet date. Petro Stopping Center considers these assumptions to be in line with a range of transition paths consistent with the Paris climate change agreement's temperature goals. An inflation rate of 2% to 2.5% (2% in 2023) is applied to determine the price assumptions in nominal terms.
For a prospective franchisee, these oil and gas price assumptions are important because they can affect the valuation of Petro Stopping Center's assets and, potentially, the financial health of the company. Understanding these assumptions can provide insight into how Petro Stopping Center is planning for the future and managing risks associated with the energy transition.