How would you value an oil company?

E&P or integrated?

Probably based on its assets, priced relative to other oil companies. In general, you can try and approximate the value of a barrel of production at a certain cost and then subtract out the liabilities. One good way of doing that is to look at its competitors.

If you have to look at the commodities market, you should be treating an oil well as an OPTION to produce oil at a certain cost. If you go back to microeconomics, a firm has the option to shut down production if the price of goods makes production uneconomical. Naturally, a barrel of light crude production is more valuable than heavy crude and heavy refining capacity is more valuable than light oil refining capacity, but you should be able to get an approximate comparison. Then subtract out the liabilities. Be ready for a question about whether the firm is more valuable as a whole or the sum of its parts, but a commodities firm like an oil company- particularly an E&P- is probably going to be closest to being worth the sum of its parts relative to other firms.

For an integrated, you'll have to do something similar for refining capacity, natural gas production, brand name, and the retail stations it might own. The brand name and the retail stations will probably have to be treated more along the lines of a series of cash flows rather than as commodity-like assets like refining capacity and oil production.