- Vegetable oil is an important component of cooking and food preparation in many cultures: Economics Assignment, UOC, UK
- Identify further areas for development through mentoring and Discuss the different methods of coaching and training available to the coach: Coaching and Mentoring Assignment, UOW, UK
- BBS003-1: DIL Haulage (Leighton Buzzard UK) What issues may impact the company’s development and growth? Issues: Foundations of Business Communication Assignment, BU, UK
- Unit 40: Produce a critical evaluation of the international marketing context, including insights into how organizations should adapt their marketing strategies for various markets: International Marketing Assignment, CU, UK
- On September 6th, Thursday, AXION Airways announced it had suffered a breach resulting in the theft of customer data: OTHM Level 4 Diploma in Information Technology Assignment, UK
- Ali works as Maternity Support Worker. Whilst attending a birth on a labour ward during a very busy period when staffing levels: Health and Social Care Provision Assignment, UU, UK
- Maxwell Building in Peel Park campus, University of Salford, is to be demolished and replaced with a 6-storey building: Soil Mechanics Assignment, ICL, UK
- COM4009: You have joined the technical support team at a small firm (100 employees) with plans for rapid expansion.: Productivity and Collaboration Tools for Learning and Work Assignment, AU, UK
- Bicycle Rack When a full design specification was produced and the weighted objective procedure carried out: Engineering design Assignment, UOB, UK
- Explain why legislation is necessary to protect the rights of individuals who cannot make decisions for themselves.: Understanding mental capacity Assignment, OAL, UK
- Critically discuss the following statement by Anita Roddick with reference to the value paradox: Business Management Assignment, OBU, UK
- 5CO01: Organizational change is a constant in many organizations, driven by a number of different forces including customers, markets, and technology: Organisational performance and culture in practice Assignment, CIPD, UK
- You should propose and outline your strategy drawing on the findings of your critical audit: Digital Marketing Assignment, UOP, UK
- Describe what is meant by the term ‘unsafe practices that may affect the well-being of individuals: Safeguarding Assignment, BCU, UK
- Identify the power of the police to reduce the impact of crime on society: Security and Offender Management Assignment, DC, Ireland
- Identify the knowledge and information about the system of criminal justice and its alternative to reduce crime in the community: Security and Offender Management Assignment, DC, Ireland
- The learning procedure about offender management changes my opinion about the justice system: Security and Offender Management Assignment, DC, Ireland
- Identify that police is one of the important characteristics in the justice society to reduce crime in the community: Security and Offender Management Assignment, DC, Ireland
- From the individual week, I learned about the development of criminology and its various characteristic that influences the diverse range: Security and Offender Management Assignment, DC, Ireland
- Discuss how the supply chain activities of Cross Docking and Activity Based Costing enable transport operators to reduce costs: Global Supply Chain Management Assignment, UOS, UK
6008LBSBSC: UK Oil Plc is involved in upstream, oil exploration and production in the North Sea, United Kingdom: Strategic Corporate and Project Finance Assignment, LJMU, UK
|University||Liverpool John Moores University (LJMU)|
|Subject||6008LBSBSC: Strategic Corporate and Project Finance|
UK Oil Plc is involved in upstream, oil exploration and production in the North Sea, United Kingdom.
Their current finance structure is detailed below:
Last year’s Profit Before Tax was £500Mand this level of profit is expected to continue from existing business, at least in the short term.
Ordinary shareholders have previously received the following dividends:
- 3 years ago – 5%
- 2 years ago – 6%
- 1 year ago – 6.5%
Current Market Price Per Ordinary Share: £3.50
The Board of UK Oil is considering its future strategy.
Despite the challenges facing the sector, (declining UK oil reserves, volatile oil prices, pressure from US shale producers, volatile demand, coupled with a high-cost base and environmental risks), the Board feel they must invest in order to grow the business.
The Board is willing to invest up to £350 million and requires your evaluation of the following potential Project, together with evidence-based, justified recommendations:
The Development & Operation of a New Oil Reservoir in the North Sea
Activity A: Geological Studies
Geological studies lasting 12 months have just been completed at a cost of £20 million.
Seismic and geological studies have cast doubt on the amount and quality of oil available for extraction, i.e.it may not provide 8,000,000 barrels per annum for 25 years as initially thought.
- Undertake the investment immediately in the hope that the amount and quality of oil are available. However completed studies estimate that there is only a 35 chance that the amount and quality of oil suggested, is available for extraction.
- Carry out Further Tests(which would delay the Board’s decision by 1 year and cost $50M) and then decide whether or not to drill. The estimated probability of the test yielding positive results is 0.30, in which case there would be a 70 probability of success. If the tests are negative there is then only a 0.20 chance of success.
This may also give time to form a Strategic Alliance with a partner(operational and/or financial), to share cost, risks and know-how. The form of Strategic Alliance has yet to be decided.
- Sell the Drilling Rights to a third party (another oil company):
- either immediately, for US$ 45 million, or
- after the Further Tests, (together with the Test Results) for:
- US$140 (assuming the tests were positive), or
- US$ 20 (if the tests prove negative)
The project is now entering the Technical & Financial Evaluation Stage, Activities B & C
Activity B: Technical Evaluation
Production & Chemical Engineers will be asked to evaluate the feasibility of the project over the next 3 months
Activity C: Financial Evaluation
Your task is to present a Financial Evaluation & Recommendations to the Board in 3 months’ time to assist in their decision-making. In this respect you should base your initial assessment on 8,000,000 barrels per annum for 25 years.
Activity D: Board Consideration
The Board will consider both the Technical & Financial Evaluations before making their decision whether or not to proceed with the project.
Should the Board decide to proceed the Project will move on to Activities E through to J as detailed below
Activity E: Safety Report
A shortage of safety engineers in the sector may well prove critical to the timely start of the project, though this could be solved by moving suitably qualified staff from other activities, though it is uncertain whether this action would then delay the project.
Activity F: Hire & Training of Labour
Activity G: Site Preparation
Associated costs of Activities F & G are included in “Other Costs” detailed below
Activity H: Delivery & Construction of the Oil Platform including Drills, Pumps, Pipelines, etc
Two suppliers have been identified, British Oil Machinery which has quoted £315,000,000, and Munchen Machinery Germany which has quoted €350,000,000.
CAPEX will of course be eligible for any Tax Allowances.
Details of the contract have yet to be agreed but UK Oil will clearly need to reduce the risks associated with the tender and performance of the contract, particularly as both contractors may require an advanced payment of 10%.
Do You Need Assignment of This Question
hire online assignment writer UK on 6008LBSBSC: Strategic Corporate and Project Finance. our experts are highly educated to provide the well researched solution on finance assignment as per university guideline at a most reasonable price.