MW PETROLEUM Essay

Valuations depend on forecasts. The reliability of the forecasts will then depend heavily on complete analysis of the industry, in addition to the evolving changes in the economy. It also requires understanding of the business and financial characteristic of the industry.

There are three widely recognized approaches to developing an estimate of fair market value. They

Profitability of oil companies declined due to low prices; and most of these firms responded with cost-cutting measures. Many top companies divested their marginal properties, seeking to consolidate and rationalize their productive assets- one of which was Amoco Corporation. Amoco Corporation conducted an extensive review of its cost structure and profitability (p.2), leading to major restructurings to better focus on its core businesses. The result of this was a divestment of the middle section of its assets along marginal curve. Morgan Stanley advised and assisted in the process, creating MW Petroleum Corporation – a new, free-standing exploration and production oil and gas company. MW was offered to a number of targeted international petroleum concerns, but the most attractive offer came from Apache Corporation. Apache Corporation was an independent oil and gas company based in Denver, Colorado engaged in exploration, development, and production of oil and natural gas. Their strategy, “rationalize and reconfigure” involves acquiring producing properties whose operations Apache could quickly control and make more efficient, producing significant cost-saving opportunities for the company. The sale of MW Petroleum provides such an opportunity for them. However, Apache must first carefully evaluate MW’s value to come up with a proposal that would be attractive for Amoco and profitable for Apache as well. CRITICAL ANALYSIS

There are various techniques used to value the organization's financial and business worth. The most common techniques used to value the business are based on accounting and financial principles. The discounted cash flow, Asset based, and relative valuation are useful techniques. The valuations of an organization's worth are performed according to a pre-determined framework best suitable for assessments. Similarly the techniques are not only different in their approach but the results also very on the basis of methodology

Oil has been a coveted resource since the early twentieth century. Global oil powers are a major component of the world economy. For this reason predominant oil producers have experienced numerous power struggles and violent outbreaks over the years. Due to the newfound independence of many Middle Eastern countries in the 1960s, many rich oil fields were accessed for the first time, providing new competitors for the hegemonic American "Seven Sisters." Tensions rose between the United States and many Middle Eastern countries not only as a result of competition, but also due to several oil-related wars that broke out in the region. The years that encompassed the strained relationship between the U.S. and OPEC-involved countries proved to be a

I have pursued my interest and knowledge of financial markets through analyst positions on Limestone Capital and Queen’s Private Capital Group, two student-run finance clubs at Queen’s. As part of my involvement, I completed training in financial modelling, developing the necessary skills to perform valuations. I also

At 30 June 2014, the balance of the revaluation surplus is $400 000, of which $300 000 relates to the factory land and $100 000 to the buildings. On this same date, independent valuations of the land and building are obtained. In relation to the above assets, the assessed fair values at 30 June 2014 are:

As discounted cash flow method assumes all equity financed acquisition, it presents more comparable value for the real option values shown. The value of Apache’s possibility to decide whether to exploit the reserves equals the difference between DCF value and the real option value.

In late 1990, the group of Amoco Corporation and Apache Corporation had begun talking regarding the possible acquisition of MW Petroleum from Amoco to Apache. MW Petroleum Corporation is a wholly owned subsidiary of Amoco Corporation which has its own reserves, management team and with full ownership in geologic and engineering data. MW Petroleum, a free-standing exploration company that was even as large as some of independent oil companies. It operated exploration and development for well, approximately working interests in 9,500 wells in 300 production areas. The growth of MW was very attractive to the other investors, which company grows 30%

In late 1990, the group of Amoco Corporation and Apache Corporation had begun talking regarding the possible acquisition of MW Petroleum from Amoco to Apache. MW Petroleum Corporation is a wholly owned subsidiary of Amoco Corporation which has its own reserves, management team and with full ownership in geologic and engineering data. MW Petroleum, a free-standing exploration company that was even as large as some of independent oil companies. It operated exploration and development for well, approximately working interests in 9,500 wells in 300 production areas. The growth of MW was very attractive to the other investors, which company grows 30% per year since mid-1980s, due to large

crude oil allowed in at the bottom of the tower at a time so that the

Even though Stephen has certain art knowledge, but this measurement is still subjective and unreliable. According to U.S. GAAP, the designated market value should be the middle value of three amounts: replacement cost, net realizable value, and net realizable value less a normal profit margin. Hence, we suggest WAG re-evaluate the market value of the artworks using the designated market value method.

The task by Ms. Mortensen to compute the weighted Cost of Capital (WACC) is vital in attaining four objectives: (1) to support financial accounting and capital budgeting decisions, (2) for performance assessments, (3) to inform merger and acquisition proposals, and (4) to support stock-repurchase proposals. But the cost of capital approximations by Ms. Mortensen appears to misguide these decisions. This is because the inputs and assumptions are misleading as evidenced by criticism by the controllers and division

Given the slightly optimistic nature of the assumptions surrounding profit margin and rig efficiency, reducing both percentage values would provide more conservative estimates. If profit margin and rig efficiency were reduced to 11% and 98%, respectively, a valuation allowance of approximately

Stowe, J. D., Robinson, T.R., Pinto, J. E. et Henry , Equity asset valuation, Second Edition, 2010, CFA Institute Investment Series