...independent oil and gas companies have responded to the recent spikes and increased volatility in oil and natural gas prices by stepping up the practice of price hedging to shore up earnings and capital spending. Hedging can be a tricky practice to manage, and guessing wrong on price can do a lot of damage to a company's bottom line. The depth of the recent plunge in US gas prices caught virtually everyone by surprise, so some producers have succeeded nicely with what historically might have seemed high-priced hedges. Others missed a golden opportunity. But, in general, US independents are becoming more comfortable with the practice. While taking a breather from the wild price rollercoaster natural gas prices have been on of late, independents are devising new hedging strategies for coping with the vagaries of ever-more volatile commodity prices. Increased hedging US independents have watched natural gas prices drop from around $10/Mcf in December to about $3/Mcf in recent weeks. Oil prices also have fluctuated, as the world watches the Organization of Petroleum Countries work to maintain its targeted oil price band. Hedging is one strategy that independents use to try to lock in oil and gas prices as they strive for predictable cash flows to support exploration and development spending plans. "Companies have been doing more hedging on gas recently than they have done historically," said Robert Morris of Salomon Smith Barney. "Companies took advantage of high gas prices for two reasons:...
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...Rising Gas Prices: A Better and Cleaner Earth Essay 2 Embry Riddle Aeronautical University Professor Christine Hansen English 123 May 22, 2007 Abstract The cost of gas has rapidly increased in the recent years. But what most people do not realize is that rising gas prices is a good thing. Most people see gas prices as a thing to hate but in reality it leads to major innovations. Not just better cars but a better environment. The future automotive industry is fueled by the cost of gas. If gas prices stayed low no one would do anything to change and make the future better. Rising Gas Prices: A Better and Cleaner Earth Everyone fells the pain of rising gas prices, but what most people don’t see is the good side. The more gas cost the less people will want to use it. This will lead to better fuel economy, alternate means of travel and ultimately to alternative fuel sources. Rising gas prices will ultimately be one of the greatest environmental events in the history of the human race. Gas prices have been rising for several different reasons including government regulation, low supply from refineries and low supply of crude oil. Gas prices are increasing at an alarming rate; according to the Department of Energy (2007, May 14), the current national average is $3.10. The price has increased over 43% from 2005. The price of one barrel of crud is above $60. These rapid rises in gas prices have already caused changes to the minds of Americans. According...
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...most corrupt nations in the world. * Russia scored 2.1 out of 10 in the 2010 Corruption * Country’s current account surplus reached $72.6bn in 2010, which is an increase of around 47% compared to the previous year. * The new liberal immigration laws brought in many foreign workers, especially from the EU region; indeed, it was reported that the total number of foreign-born individuals who had entered Russia had risen to 14.5 million as of the end of 2008. Immigration laws play a vital role in attracting foreign direct investment (FDI) and, in Russia's case, they are presently adding to its strengths. * GDP Contribution by sector: Agriculture | 4.2% | Industry | 33.8% | Services | 62.0% | Russia has maintained a surplus position since 2000. Improved competitiveness and higher oil prices facilitated a dramatic turnaround in terms of current account, from a deficit of around 0.5% of GDP in 1998 to a surplus of 12% of GDP in 1999. This surplus increased further during 2000 to 18% of GDP. This marked improvement in fortunes facilitated the stabilization of the ruble in international markets. Although export growth remained strong, a bounce back in import demand eroded the current account surplus to 8.5% of GDP in 2002 and 8.2% in 2003. However, increasing oil prices (which rose to more than $30 per barrel for Russian oil) in 2004 saw the current account surplus widen to more than 10% of GDP. Accelerated...
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...Executive Summary: The high price of gas at the pump has many Americans looking for alternates to their gas powered vehicles. One of the most popular options right now is a hybrid vehicle. The question that comes to mind is, are hybrid vehicles worth it? With record high gas prices due to the price of oil, most car owners out there have major concerns over their gas usage. Over the past ten years, the cost of gasoline has grown 250%! The price of oil has doubled since January of this year. The high prices of oil and gas is the driving factor for most of the people to trade their gas powered vehicles for hybrid vehicles. These vehicles promise to give consumers more mileage per gallon, the truth is that only a few vehicles currently in the market actually make any sort of financial sense. There are quite a few issues with buying hybrid vehicles, even with gas prices at more than $4 a gallon. First, these vehicles are much higher in price than their gas powered counter part so, the premiums attached to their price tags do not justify extra mileage that you get. In some cases car dealers are selling popular vehicles at much higher prices than MSRP. Second, there are no laws and regulations controlling the technology, price, and the mileage per gallon required out of these vehicles. Currently, there are hybrid vehicles in the market that offer an improvement of 3MPG to 18 MPG over their gas powered counterpart. This is a huge range that needs to be controlled. Third, the demand...
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...Gas Prices and the Economy The marketplace of supply and demand determines the price of fuel. If demand grows or if supply decreases, there will be an increase in pricing. On the flip side, if demand declines or if there is a surge in supply in the market, there will be a decrease in pricing. If a retailer in the market prices its gas too high without regard to competitors’ pricing, consumers will take their business to the competitor with lower prices. If the retailer loses enough business due to higher pricing, they will lower the prices to be more competitive in order to retain customers. Retailer competition affects gas pricing which can be seen by price differences on stretches of highway with multiple gas retailers. More choices generally mean more competition for the retailers. Even though many retailers carry the gasoline of major oil companies, they are independent dealers of the product and can set prices as they wish. The cost of foreign trade is contributes to the rising cost; however, many other factors contribute to the pricing of gasoline which drastically affects buyers and sellers in the marketplace. According to the Chevron Corporation, like agricultural products, such as wheat and corn, and precious metals, such as silver and gold, crude oil is traded on the world market. Recently, crude oil prices have risen dramatically, driven by rising global demand and political instability in several oil producing countries (“The Price of Fuel…”). Since crude...
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...estimates of oil and gas in the lower 48 states. This sustained supply and production has been a result of technological advancement, particularly improved techniques in hydraulic fracturing, has kept prices for natural gas extremely low while crude oil prices have fluctuated and changed over time. One reason for this is the different nature of exportation in the two hydrocarbons. As will be discussed below, the transportation and exporting of natural gas is much different than for crude oil. Natural gas must undergo a liquefaction process in order to travel by specialized cargo ship, the alternative to a pipeline, which adds substantial costs to the activity. There are currently no operational natural gas export terminals in the lower 48 states, but a few are under construction. The large sunk costs will be a large part of our consideration of the exportation of natural gas. The U.S. has traditionally been a net importer of gas, and considering the high upfront costs of building export terminals, the sale of American gas has been isolated almost exclusively to the domestic market. The only exception to this has been to export natural gas only where existing pipelines can carry it, which has limited foreign export to North America. Despite this historical trend, calls for the US to begin exporting natural gas have been growing louder as the potential to seek higher priced natural gas markets become more attractive. This paper will explore liquid natural gas (LNG) export terminals...
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...Impact of Shale Gas Production on the Market Fundamentals and Energy Security of Certain Countries ICCG Think Tank Map: a worldwide observatory on climate think tanks IMPACT OF SHALE GAS PRODUCTION ON THE MARKET FUNDAMENTALS AND ENERGY SECURITY OF CERTAIN COUNTRIES Ekaterina Zelenovskaya, ICCG 1 Impact of Shale Gas Production on the Market Fundamentals and Energy Security of Certain Countries Impact of Shale Gas Production on the Market Fundamentals and Energy Security of Certain Countries Ekaterina Zelenovskaya, ICCG Abstract The world’s unconventional gas base such as tight gas, coalbed methane (CBM) and shale gas are estimated to be as abundant as conventional gas resources. The recent start of shale gas production in the North America has significantly influenced major regional gas markets around the world. This article intends to examine the impact of shale gas production to the situation with the energy markets and energy security of particular countries, such as United States and countries of Continental Europe. 2 Overview of Shale Gas Production Activities and their Impact on Regional Energy Security Shale Gas and Energy Security Energy production and use have various environmental implications since energy represents about 1 65% of global anthropogenic greenhouse-gas emissions. The general belief/opinion is that fossil fuels will remain the dominant source of primary energy in the following decades. However, natural gas, having...
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...PIONEER NATURAL RESOURCES versus LAREDO PETROLEUM INC. Financial Statement Analysis and Decision Making Activity Background: PIONEER NATURAL RESOURCES Pioneer Natural Resources (PXD) is a large independent company that focuses primarily on drilling oil and gas exploration, with executive offices located in Irving, Texas. The company was formed in Delaware in 1997, with executive offices located in Irving, Texas. One of the company’s main focuses is to be competitive and to be profitable, so as to develop and produce oil and gas reserves. One way they gain competitive advantage is by employing well-trained and experienced personnel who enable efficient decision-making. The company has a sound development and production strategy. The company focuses efforts towards maximizing its average oil production, NGL’S (Natural, gas, and liquids), gas production through development drilling, production enhancement activities, and acquisition of producing properties. The Company is always looking for ways to improve on oil and gas reserves, and its production through development drilling and conducting other production activities. (Well Recompletions) Pioneer Natural also engages in other activities such as: Exploratory, Integrated, and Acquisition activities. The way the company penetrates its integrated services is to control drilling, operating costs, and to support the execution of its drilling program and operating services. One of the last...
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...Recommendations……………………………………………………………………………………. | 9 | Economic Justification ……………………………………………………………………………….. | 9 | References …………………………………………………………………………………………….. | 11 | Introduction Overview Cousin Edgar needs to understand/decide if he should invest in buying two gas stations. He must consider the high costs of pursuing this idea on business and to try to recover his costs quickly. If the cost of gasoline is taken as a measuring rod then he needs to understand if he can earn enough to recover the costs of investing. Starting a gas station business can be one of the best decisions Cousin Edgar can make as an entrepreneur. He can either set up new gas stations or buy gas stations for sale. If he decides to buy one then he must have some knowledge about how to buy a gas station and if he is planning to set up new gas stations on his own then he is going to need to do some serious research as to how he can go from start to launch. He needs to consider doing lots of research and checking out numerous gas stations for sale before starting up. One of the first steps is to choose a location and find a property. It is important to find a location with the necessary driver demand for fuel and convenience store items is probably the most vital step. Gas station requires a high start-up costs and operating costs, with a high volume of sales, or it will...
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...GM545 Winter Term 2012 mr_marshalls@live.com Exercise 1: Microeconomics Issues: Question # 1 There are two reasons gas prices must go up. The first is to get people into coal-powered cars. Coal-powered cars can only be driven around 40 miles before they must be plugged back into the grid for more coal power. If everyone moves to coal-powered cars, the drivers will be forced to live closer to cities (Erickson, 2011). According to my current reading, when you look at the term product differentiation in buying your gas, this term gives competitors the edge to host the cheapest gas (Chapter 10:253). In the current week, the Shell gas pump went from $3.65 to $3.57 per gallon and the week before that the gas price during week 1 was $3.47 expecting to rise to $4 per gallon in Lexington, KY. During my travel to Indiana the gas prices average $3.99 per gallon. In using the midpoints of price and quantity to compute the relevant percentage changes essentially gives us the average elasticity between point (a) and point (b) (Stone, Gerald. “Core Economics” Worth Publishers, 07/2011. p. 118). My equation below may show just exactly how these price may increase or decrease based on the elasticity formula: Eᵈ = 200 / 400 ÷ 3.65 – 3.57 / (3.57 + 3.65) / 2 = 200 / 400 ÷ (- 0.08 / 5.3950) = .5 ÷ -0.0148 = [-33.72] = 33.72 I think for the most part of our gas prices has increase due to determinants of our increase in supply due to our disaster issues that has pushed for aide from the...
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...Friday 29 June 2007 Change of recommendation Reliance Industries Earnings to provide a reality check We downgrade RIL to Sell with a target price of Rs1,300. We believe consensus valuation of its E&P assets is too aggressive. The stock also looks expensive on earnings multiples, given our cautious view on the commodity cycles and belief in rupee appreciation. Key forecasts FY05A Revenue (Rsm) EBITDA (Rsm) Reported net profit (Rsm) Normalised net profit (Rsm)¹ Normalised EPS (Rs) Dividend per share (Rs) Dividend yield (%) Normalised PE (x) EV/EBITDA (x) Price/book value (x) ROIC (%) 1. Post-goodwill amortisation and pre-exceptional items Accounting Standard: Local GAAP Source: Company data, ABN AMRO forecasts Sell n/a Neutral (from Hold) Absolute performance Short term (0-60 days) Market relative to region Integrated Oil & Gas India Price Rs1700.00 FY06A 812113 144050 96046.9 96046.9 78.5 10.0 0.59 21.6 17.6 6.60 13.0 FY07F 1053630 182100 115113 115113 94.1 11.0& 0.65 18.1 14.6 4.29 17.5 FY08F 982038 FY09F 927646 660513 126574 75716.4 75716.4 61.8 7.50 0.44 27.5 19.6 5.18 9.74 Target price 181809& 210725% 122300% 137078% 122300 100.0% 12.0 0.71 17.0& 15.0 3.48 10.6 137078 106.8% 14.0% 0.82 15.9& 12.3 2.54 10.3 Rs1300.00 (from Rs1250.00) Market capitalisation Rs2.37t (US$57.99bn) Avg (12mth) daily turnover Rs1376.07m (US$31.05m) Reuters Bloomberg RELI.BO RIL IN year to Mar, fully diluted Limited earnings growth We estimate...
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...Problem Since September 2010, average monthly gas prices have risen 45 cents to $3.21 (February month-to-date), an increase of 16.4%. But during the past four years, there have been several periods where gas prices increased by even more substantial amounts. In 2008, gas prices rose 94 cents — or 33.4% — to $4.11 between February 2008 and June 2008. Gas prices also increased 63 cents from February to May 2006, 86 cents from February to May 2007, and 94 cents from December 2008 to June 2009. (http://www.edmunds.com/about/press/current-gas-price-hikes-dont-measure-up-to-recent-history-says-edmundscom.html). Prices fluctuate at the pump because of problems in the Middle East, natural disasters and government regulation. Crude oil also plays an important role in gas prices. Crude oil is a natural substance found underground that is used to produce fuel for cars, trucks, airplanes, boats and trains. As of February 2012, crude oil prices made up 72% of the price of gasoline. (http://useconomy.about.com). For every $1 increase in the price of a barrel of crude oil, U.S. consumers are likely to pay 2-1/2 more cents for a gallon of gasoline. The prices that we pay at the pump are determined by supply and demand. For example, if demand rises and supply falls, prices increase, and just the opposite when supply increases and demand decreases, prices will decrease. Being an inelastic product, few substitutes are available. The price does not have much effect on demand. Since people...
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...INTRODUCTION ONGC Videsh Limited (OVL) is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), a Central Public Sector Enterprise/Undertaking (CPSE/CPSU) of the Government of India, under the administrative control of the Ministry of Petroleum & Natural Gas (2MoP&NG). OVL is engaged in exploration and production of oil and gas outside India. OVL was incorporated as Hydrocarbons India Private Limited, on March 5, 1965 with registered office in New Delhi to perform international exploration and production business. The Company was rechristened as ONGC Videos Limited w.e.f. 15th June, 1989. With the widening of the energy supply gap from domestic production, participation in oveRs.eas oil and gas assets for equity oil was revived in the mid nineties. OVL participated in few exploration projects then, which could not bear desired results. In January, 2000, OVL was granted special empowerment by the Government. The special empowerment facilitated better and smooth functioning of the Company in the international environment as evidenced by a string of successful acquisitions post January, 2000. OVL presently has participation either directly or through wholly owned subsidiaries/joint venture company in 33 E&P projects in 14 countries namely Vietnam (2 projects), Russia (2 projects), Sudan (3 projects), Iran (1 project), Iraq (1 project), Libya (1 project), Myanmar (2 projects), Syria (2 projects), Cuba (2 projects), Brazil (6 projects)...
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...Institute Global Investment Research Challenge. Oil and Gas industry PetroVietnam Gas Recommendation: HOLD Price Target: 79,512 VND 2015F 83,482,699 24,051,366 15,143,449 7,991 30.12% 2016F 97,674,758 28,140,098 17,753,969 9,369 28.48% 2017F 2018F Date: 22 December, 2014 Ticker: GAS Price (Dec 19, 2014): 68,000 VND Forecast Summary Net Sales (million VND) EBITDA (million VND) Net Income (million VND) EPS (VND) ROE (%) 2011 64,224,500 11,858,894 64,224,500 2,285 28% 2012 68,301,359 15,940,112 68,301,359 5,167 40% 2013 65,399,686 18,434,982 65,399,686 6,478 42% 2014F 72,593,651 20,914,231 13,140,492 6,934 32.20% 117,209,709 142,995,845 33,768,117 21,347,273 11,265 27.37% 41,197,103 26,090,435 13,768 26.51% Key Market Data Listed on HOSE Ticker GAS Industry Oil and Gas 52 Week high 122,300 (VND) 52 Week low 61,300 (VND) Previous close 68,000 (VND) Market Cap. 128,860,000 (million VND) Outstanding 1,895,000,000 shares (units) Source: Student estimates Highlights We estimate PV Gas (GAS) as “HOLD” with target price of VND 79,512, expected higher than its current price 16.9%, VND 68,000. Three-stage discounted cash flows model is employed and the result is confirmed again with P/E analysis. Operation under control of government as a monopoly in gas industry: PV Gas is the only trader in dry gas market and accounted for 70% national LPG market. Restructuring period 2011-2015 strategies: PV Gas has focused more on the core businesses: gathering, importing...
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...applications. I recently upgraded my Smartphone from a Blackberry device, to a phone with the Android operating System, a Motorola Droid Maxx. I was stunned to find so many applications that I could download and use for free. Since I upgraded my Smartphone to the Motorola Droid Maxx at the height of gas prices barreling out of control, I wanted to find an application that could assist my family and me, in finding the cheapest gas station around my current home since I primarily fuel at gas stations near there. In the past, I used to drive to different gas stations in the neighborhood to check the prices of each station until I found the one with the cheapest prices. At times I ended up driving back to the previous station to get the lowest prices. The gas stations are only a few short blocks or up to ½ a mile away from one another so it was not a big burden to drive back and forth. The first thing I did was research apps and find an app that could easily do the work of finding the cheapest stations for me. I found an app named “GasBuddy.Com”. I downloaded the app and quickly found out I was behind in technology! The app is set up to provide the user with the cheapest gas stations, whatever area the user is in, FOR FREE! It works for all the states within the United States as well as Canada. It could be adjusted by the user to...
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