Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Identify and describe at least five key project risks and contract asymmetries:

You are a Houston natural gas storage operator. You usually buy natural gas. From a Mexican producer in the spring and fall and resell the natural gas in the winter to a New York gas utility.  All of your contracts have a 5 year term or life.

You have a best efforts fixed quantity (100,000 Mcf per day) purchase contract at fixed prices in pesos with a big national oil company in Mexico. You take title to the gas at the well head (field) in Mexico. You have a best efforts (interruptible) gas pipeline transportation contract for 100,000 Mcf per day at a fixed per Mcf US dollar price with a big US natural gas pipeline to bring the gas to Houston.

Your US dollar sales contract to the New York utility is a firm obligation needing you to deliver up to 100,000 Mcf per day whenever called on by the utility. The sales price is floating at the prevailing New York price in US dollars. You have a gas pipeline contract at fixed prices from Houston to New York for 50,000 Mcf per day. You pay for this firm capacity each day regardless of whether you ship gas that day or not. The New York utility has no obligation to purchase a minimum quantity on the daily or seasonal basis.

As times are tight, you don’t carry insurance. You are un-hedged with respect to natural gas prices and currency fluctuations.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91078

Have any Question? 


Related Questions in Basic Finance

How do options on futures differ from options on the asset

How do options on futures differ from options on the asset underlying the futures? The open interest in a futures contract changes from day to day. Suppose that investors holding long positions are divided into two group ...

1 former federal reserve chairman alan greenspan once

1. Former Federal Reserve Chairman Alan Greenspan once argued that it is very difficult to identify bubbles until after they pop. What is a bubble, and why might bubbles be difficult to identify? 2. The British economist ...

In a health insurance experiment performed in a super

In a health Insurance experiment performed in a Super Specialty Hospital 4 types of insurance categories patients are expected to occur in the proportion of 9: 3: 3: 1. The observed frequencies are 891 Insured and Surgic ...

Discussionpart 1 please respond the following question no

Discussion Part 1 please respond the following question no less then 350 words (original work, no plagiarism, 1 reference "dividends" please respond to the following: • Assess the market and shareholder behaviors when a ...

Apple inc is building a branch in vietnam the cost is 6

Apple Inc. is building a branch in Vietnam. The cost is 6 million VND. The company expects the VND cash flows for the next four years are 3 million VND, 5 million VND, 3 million VND, and 4 million VND, respectively. The ...

Explain why end users who conduct their risk management

Explain why end users, who conduct their risk management operations in the treasury department, should not require the treasury department to be a profit center ? Distinguish the typical objectives of a dealer engaging i ...

Vbn is a microcap stock included in the wilshire 5000 index

VBN is a microcap stock included in the Wilshire 5000 index. The following lists the actual returns on VBN and the Wilshire 5000 index for 6 recent years. Year  VBN  Wilshire 20X1  -18.0% 13.0%  20X2 -10.0% -8.0% 20X3   ...

Moonbeam electronics profiting from a foreign trade

MOONBEAM ELECTRONICS PROFITING FROM A FOREIGN TRADE ZONE Located in southwest Missouri,Moonbeam Electronics is a manufacturer of small electrical appliances, such as toasters, toaster ovens, can openers, mixers, and blen ...

1 what does the reliability coefficient of a measure

1. What does the reliability coefficient of a measure indicate if it is .60? .OO? 1.00? 2. What does a correlation coefficient tell us? Why are correlation coefficients useful when assessing reliability? 3. What are the ...

1 list in order the major sections that all research papers

1. List in order the major sections that all research papers must have. 2. What is the purpose of the introduction of a paper? 3. When presenting the results of statistical analyses, what information should be presented? ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen