Executive summary
Chesapeake Energy is the second largest producer of natural gas in United States. The company invented horizontal drilling and proved to be an expert of unconventional drilling. Having the drive and commitment to achieve great accomplishments Chesapeake managed to set operation efficiency standard in the industry with their core values of integrity, trust and transparency.
Although having financial issues with acquiring more debt and less liquid capital, the company managed to survive fluctuations of natural gas price and managed to innovate and apply other methods of unconventional drilling. Chesapeake still has room for improvement. Cost management and financial risk management can reduce debt greatly and provide
…show more content…
Aubrey McClendon and Tom L. Ward founded Chesapeake Energy in 1989. McClendon and Ward graduated from college a decade before the oil industry skyrocketed. Seeing the potential beforehand in natural gas exploration and production, McClendon and Ward started with 10 employees and $50,000 initial investment to drill reservoirs. The duo concentrated in horizontal drilling and expanding its reserves. Its success grew rapidly due to findings of natural gas in south Oklahoma, southeastern Texas and alongside Gulf Coast. Company completed its IPO and started to offer shares in 1993 leading to Chesapeake Energy having the highest growth rate in the industry between 1994 and 1996. However, success didn’t last too long due to the collapse of natural gas prices, company changed it strategy and focused only on natural gas production leaving sites in Texas, Louisiana and coming back to Oklahoma to initiate its strategy. As the process of research and development became costly, Chesapeake started to shape the industry because of their commitment to horizontal drilling and exploring more reservoirs. In 2006, the company entered S&P 500. Chesapeake Energy produces than 4 trilling cubic feet of natural gas as reported in 2014.
Goals, Vision/Mission, Constraints
Chesapeake goals focus on driving shareholder value with executing business strategies, disciplinary finances with profitable and efficient growth from
Since Massey’s stock price has dropped rapidly over the years, issuing new equity is not an attractive option with the low stock prices. Obviously increasing debt is not an option either so the only alternatives for Massey to finance it’s business going forward is to either find savings from it’s Balance sheet and income statement or to sell it’s assets. In below we discuss some opportunities we’ve identified in Massey’s financials.
Devon Energy Corporation, an oil and gas company was founded in Oklahoma City Oklahoma in 1971. They are the largest independent oil and gas corporation in the United States. They have many reserves all around the world, in places such as Colorado, Canada, West Africa, and ect. They are in the top 50 largest oil and gas companies in the world. I will be talking about Devon Energy’s very interesting background.
That relates directly to winning a larger market share. The short-term goal for the company should be to cut coasts and improve the human resource department functions. Which can be done through the above stated suggestions of the improvement of the business.
California is the third largest in fuel consumption on earth, behind the U.S. and all of China, and with this demand needing to be met and a diminishing supply of fossil fuels, comes the rise of a new revolution, natural gas. With the start of the industrial revolution came the beginning of the use of fossil fuels. Thus, making the United States overly dependent on a limited resource that was also harming our environment. Over the past few decade, nations around the world have realized that the finite amount of fossil fuels is coming to an end, and our need for alternative fuel and energy sources is growing. We have experimented with different types of resources, one of them being natural gas. Natural gas has been a
If John D. Rockefeller, one of the first oil tycoons, were to look at the oil industry today, would he believe his eyes? With millions of oil barrels being imported and exported each year, the oil industry has changed dramatically since the 19th century. At the forefront of the oil industry is the emergence of an oil drilling technique known as fracking. Fracking is an unconventional drilling process that is accomplished by using high-pressured water to release oil and natural gas from rock formations, known as shales. The use of fracking in the United States has made it one of the top oil producing countries in the world. However, this newfound oil and gas drilling method has not come without its costs. Despite the economic boom near drilling locations, politically, fracking has caused some international relationships to be strained. Also, fracking is seen as highly controversial by conservationists because of the environmental threats that it poses. The drilling method of fracking has deeply impacted the United States from an economic, a political, and an environmental standpoint.
With shale natural gas now on the horizon in the United States of America, many supporters of the horizontal hydraulic fracturing industry are looking at the economic benefits of fracking shale. The current horizontal drilling abilities provided “23.608 quadrillion Btu [of just shale natural gas alone] in 2011” (Hassett and Mathur 2014). This number in terms of energy production marked the “USA [as] the second largest natural gas producer” (Hassett and Mathur 2014) as of the year 2011. Since 2011, the production of natural gas in the United States has been raised even higher as more and more states lift their moratoriums on fracking and new natural gas hotspots are discovered.
Fracking is a modern technique to explore natural gas through a controversial procedure. The controversy about scientific evidence for the impact of fracking has raged unabated for over a decade. It has now become one of the most popular debates between the supporters of Greenpeace or environmentalists and the energy companies. Now it’s a centrepiece of discussion in the context of the energy solution and considered as a really important source of energy by last few decades. Recent developments in the field of natural gas have led to a renewed interest in fracking. Energy seekers support a lot of arguments for their strength at the same on their counterparts. However, this essay will give a brief overview of the history, process, the
Also, the final metrics of SNCs Sales, EBIT, Net Income, Free Cash and the Firm 's Total Value are discussed in further detail. As CEO, I will determine whether to invest in a variety of growth and cash flow improvement opportunities during three phases spanning nine simulated years (Harvard Business Publishing, 2014)..
As the upturn begins for the oil and gas industry, Anadarko believes that they are well positioned to be a successful company. In 2016, they reduced their capital investments by 50% relative to 2015, while continuing to improve their efficiency and cost structure. For example, they closed an accretive acquisition of FCX 's Deepwater Gulf of Mexico assets. This transaction doubled their production from the Gulf of Mexico and the expected free cash flow will help accelerate investments in Anadarko 's most prolific assets of the DJ and Delaware basins.
North America has never been one to boast of rich oil reserves, but we have an abundant amount of natural gases. Until recently these natural resources have been unobtainable and untapped. But thanks to technological advancements, we are now able to exploit these rich gas reserves. Hydraulic fracturing has revolutionized the production of energy in the United States as well as other places in the world.
After decades of trial and error, in 2001 George Mitchell, Chairman and CEO of Mitchell Energy & Development Corp., cracked the code on what is today considered to be the new gold rush of the energy industry. By successfully commercializing hydraulic fracturing in the Barnett shale deposit, Mitchell ushered in a new opportunity for the United States to emerge as the largest natural gas producer in the world. Higher production of shale gas has reduced energy prices over the last five years and has increased U.S. energy self-sufficiency. Since it is viewed
Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income.
Hydraulic fracturing, or hydro fracking, is a sizeable issue for many. The process includes pumping the fracking fluid, which is a mixture of water, sand, and chemicals deep below the surface to fracture the rock and free the natural gas. People are either in favor or against hydro fracking. There is no in-between. While it is highly controversial regarding the safety of hydrofracking, some argue it’s unsafe because it contaminates the ground water, facts show otherwise. Many tests have been completed and studies have shown in a majority of the cases, that it is safe. However, it questions the overall safety if not all tests were proven successful. It is the social responsibility of the community to modify hydrofracking policies in order for the complete agreement of society’s benefit from it. Hydrofracking should be allowed to take place in the United States despite the environmental concerns. Natural gas is more beneficial to society than oil and coal because it is better for the atmosphere, and the domestic economy within the United States.
A company creates value for its customers and attempts to differentiate its offerings from its competitors in the market. The performance goals/metrics are set by leadership which is concurrent with its business strategy.
The board decided that the company should be judged on its ability to make a profit, gain market share, provide positive ROA and make money for our shareholders with an increasing stock price. Our target was a stock price of $38