Mw Petroleum Case Study

2. Do you favor the proposed acquisition of UCP? What are the primary sources of value in such a transaction? Is the proposed price reasonable?

1. What were the costs and benefits to stakeholders of the actions taken by Massey Energy and its managers?

Valuation is the estimation of an asset’s value, whether real or financial, based on variables perceived to be related to future investment returns, on comparison with similar assets, or, when relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010). Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise. This case attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and the issues surrounding such, as well as the Black-Scholes Model for Real Options. Questions to be addressed in the study are:

Fraser, L. M., & Ormiston, A. (201). Understanding financial statements (9th ed.). Upper Saddle River, NJ: Prentice Hall.

DQ 1:   What are the differences between the direct and indirect presentation of cash flows?  What are the advantages and disadvantages of the direct and indirect methods and which does the Financial Accounting Standards Board (FASB) favor and why?

America has been in an oil crisis for many years, it should stop. People and companies are using more oil than they should. Oil supplies are fragile. If the United States drills for oil in several other countries it would cost a lot of money and gas prices will increase. There is an option of drilling in Alaska for oil. If the United States did drill it would be cheaper because it is domestic. If the United States collected oil from Alaska's wildlife it would have an overall positive outcome.

“Hello welcome back to THATS A FAT BET radio its’s your boy skinny Zoople and im bac at it again.This weeks new segment is about how the oild discovery impacterd Texas social life with there citizens.

* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

Set in May 2005, this case invites the student to assess Berkshire Hathaway’s bid, through MidAmerican Energy Holdings Company, its wholly owned subsidiary, for the regulated energy-utility PacifiCorp. The task for the student is to perform a simple valuation of PacifiCorp and to consider the reasonableness of Berkshire’s offer. Student analysis readily extends into the investment philosophy and the remarkable record of Berkshire’s chair and CEO, Warren E. Buffett.

The TexasAgs oil company case study gave us insights on different aspects of a negotiation that can happen in real world scenarios. It elegantly portrayed the importance of having a BATNA, setting target and restriction points, impact of the fluctuating markets on the ongoing negotiations, downside of the emotional behavior, importance of having a third party member or mediator in the negotiation. The case illustrates that the negotiations should be based assumptions as they may or may not be right. Having facts and understanding the other parties true objectives and goals are truly essential in negotiation. It is a typical example of how the current power on one side can dominate and take complete advantage of their position.

As some of MW’s reserves are actually real options, the APV valuation method actually underestimates the real value of MW acquisition. If Apache defers the exploiting of the reserves, there exists a possibility for the future cash flows becoming even more valuable. For example, Apache could have more precise

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%

Midland Energy Resources is a global energy company with operations in oil and gas exploration and production(E&P) providing a broad array of products and services to upstream oil and gas customers worldwide including refining and marketing (R&M), natural gas, and petrochemicals. Janet Mortensen, the senior vice president of project finance for Midland Energy Resources must determine the weighted average cost of capital (WACC) for the company as a whole and each of its divisions

A prospective buyer has to consider the motives and financial positions of other bidders. Kohlberg wants to buyout the company in order to turn it into a private firm. ARCO has a pretty strict limit in what it can offer because of its highly leveraged position. Even if a company has the ability to take out a larger loan to make a greater offer, it has to consider the consequences of doing so. While a company like Socal has unrestricted credit, its decisions as to how to operate the company after the buyout are very limited. Creating a lot of debt in order to finance the purchase is a large risk. If the company does not perform well in the future it could face tremendous loss. In this case, a bid of $80 per share would be appropriate for an un-leveraged company like Socal. This would be enough to win Gulf while still leaving breathing room for shareholders. Taxes do not need to be considered, because the benefits cancel out the

Here is one optimistic and one pessimistic scenario. With the pessimistic scenario we took WACC with +3, 5 % and it give us a discounted cash flow value of 1,6 billion pounds which indicates a major drop in real value of the company. With the optimistic scenario we took WACC with - 4,5% and it gave us an increase of value to 2.38 billion pounds which indicates that with a little bit better adjusting and a good marketing campaign the optimistic scenario will give us an optimistic scenario of 590 million