Case Study

Part A

You are working as a financial / commercial analyst at a mid-sized listed Oil & Gas exploration company in W.A. The Board has begun its annual review of its Five Year Strategic Plan.

Each year, the Australian Government formally releases new offshore areas for consideration by the global petroleum exploration industry as part of the Offshore Petroleum Exploration Acreage Release http://www.petroleum-acreage.gov.au/2015/2016-nominations

The company geologists have informed the Board they believe the Northern Sorell Basin release area T15-3 located in the Sorell Basin off the southern coast of Vitoria may be financially worthy of developing upstream activity.

http://www.petroleum-acreage.gov.au/2015/geology/sorell- basin

The deadline for bids for this tender have been extended by 6 months past the original close due to uncertainty in the global E & P business.

The Board has requested you to conduct a detailed feasibility study into the company undertaking upstream business activities in the Exmouth Plateau as well as three other competing locations: Southern Sudan, Libya and the UK.

NB: For the purpose of this activity, assume the financial model shows all locations have a positive NPV (NOTE: you do not need to prepare any financial evaluation).

Word Limit: 1,800 words

Part B

Part B contains a two part question:

a) Five (5) annual forecasts of the spot price (in $US/bbl) of the Japanese Crude Cocktail (JCC).

See http://www.paj.gr.jp/english/ the five (5) year planning horizon spanning 2017 - 2021.

AND

b) Five (5) annual spot price forecasts of the UK Heren NBP Index (in $ per mmBtu) covering the five (5) year planning horizon spanning 2017 - 2021.

NB: You are to present your forecasts in the following 3 formats:
1. as part of the written answer,
2. as a chart and as a table for the JCC spot prices and
3. as a chart and as a table for the UK Heren NBP spot prices.

Note:

- The Chair and the Deputy Chair have both graduated with a CGSB MBA (Oil & Gas) and they will only be impressed if you create your own spot price forecasts and provide satisfactory justification for your forecast.

- The paper will be severely penalized if you do not provide your own spot price forecasts.

- Your paper will be severely penalized if you do not answer all the questions.

- Your Report must be presented in the following presentation format: Font Type: Calibri, Font Size: 12, Spacing: one and a half spacing.

- Your Board Report will include a one page (or less) Executive Summary, a Table of Contents, An Introduction, the Body of the Report, Conclusion and a Reference list which conforms to Curtin's ENDNOTE Chicago 17th B method of referencing. This reference list is to be presented on a separate page at the end of the paper.

- Charts and tables will greatly assist your presentation. However, all charts and tables must have a title which his consecutively numbered.

- You may include appendices if considered appropriate.

- The Executive Summary and any appendices do not contribute to the word count.