...introduction of Apache and the issues under consideration. Apache Corporation was conceived 50 years ago. Its gestation, with no small amount of planning, has yielded a company that is built to last. Apache was formed in 1954 with $250,000 of investor capital with the simple concept of becoming a significant and profitable oil company. Today, Apache Corporation is one of the world's top independent oil and gas exploration and production companies. The journey to this point was fueled by Apache's contrarian approach to business. Apache Corporation is an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids. Apache’s mission is to grow a profitable global exploration and production company in a safe and environmentally responsible manner for the long-term benefit of our shareholders. The value’s Apache was founded upon — integrity, respect, individual initiative, innovation, and striving for excellence. Apache's continued growth and global expansion depend on these values to guide strategies, decisions and actions into the future. Apache had just closed on the acquisition on Repsol in Egypt’s Western desert and, along with its partner Shell Overseas Holdings, had also acquired Fletcher Challenge Energy, for a combined cost of $1 billion. The value of such acquisitions, however, depended in large part on the future prices of oil and gas. To decrease its exposure to oil and gas price volatility, Apache had begun a limited...
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....edu /~metin utdallas Page 1 Risk Management at Apache Corporation Outline Factual information Major Risks and Their Classification Measurement of Risks Goal and Value of Risk Management Tools for Risk Management Sources: “Risk Management at Apache", by Lisa Meulbroek and Puja Malhotra. Harvard Business School Case \# 9-201-113, revised on Aug 27, 2001. HBS 9-201113-PDF-ENG. Go to http://hbsp.harvard.edu/product/cases and search with Apache or 9-201113. “2013 Annual Report” filed by Apache and “Investor Day Presentation” on Feb 26, 2014 available at http://www.apachecorp.com/Investors/index.aspx .edu /~metin utdallas Page 2 Factual Information: History 1954, founded by T. Anderson, R. Plank and C. Arnao = APA-che 1956, Arnao leaves Plank’s principles – Transparency: “the investor would have the operator of the wells working directly for him, sharing an identity of earnings interest with him and providing visible, regularly recurring, accurately reported results”. – Sufficient Liquidity: “sufficient money would be raised by us to fund such a professional approach”. – Risk Management: “[drilling] the risk would be spread over a number of drilling opportunities, rather than all-or-nothing deals”. < 1960, limited profitability, diversification of other businesses: Real estate, agriculture, cattle and dude ranching, lumber, steel, plastics, auto supplies, aerosol cans, telephones, utilities...
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... The Apache Corporation is an independent oil a gas exploration production company. Towards the late nineteen nineties and early twenty first century, Apache had completed several acquisitions. They included the following: Repsol which is in Egypt’s Western desert, Shell Overseas Holdings a partner of Repsol and Fletcher Challenge Energy. They combined for a total cost of $1billion. In an effort to minimize the volatility of the price of gas, Apache began a limited hedging program. The management team was aware of the underlying risks associated with hedging and they ultimately had to determine if they should continue hedging long term. If so, should they extend their current program beyond hedging the revenues from acquisitions. Within this case study, we will discuss major risks, how Apache Corporation is managing risks and whether or not they should be. We will also discuss how Apache could manage their risk as well as define what is the goal of hedging. Major Risks The biggest risk within this industry is the price of oil and gas. History has proven how volatile prices can be. Exhibit 9 indicated approximately a 70% range of price fluctuation between 1996 and 2000. The equation is relatively straight forward. When the prices are up, the industry is making money and is traditionally eager to hire new employees. When the prices are down, the industry is losing money and there is a strong likelihood that layoffs will follow. Apache, along with other...
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...9-201-113 REV: AUGUST 27, 2001 D O LISA MEULBROEK Risk Management at Apache N Introduction O By March of 2001, managers at Apache Corporation, an independent oil and gas exploration and production company, had reason to be optimistic. While oil prices had softened somewhat recently, at $27 a barrel they were much higher than the pernicious levels of 1998, when oil bottomed out at $11 per barrel. Apache had just closed on the acquisition of Repsol in Egypt's Western desert and, along with its partner Shell Overseas Holdings, had also acquired Fletcher Challenge Energy, for a combined cost of $1 billion. The value of such acquisitions, however, depended in large part on the future prices of oil and gas. To decrease its exposure to oil and gas price volatility, Apache had begun a limited hedging program centered mostly on its recently acquired properties. Apache’s managers knew that hedging could create its own risks, and so it seemed prudent to re-evaluate the success of the new program. The decision facing Apache’s managers was whether the firm should continue hedging, and if so, should its current program be extended beyond hedging the revenues from acquisitions? T CO Apache Corporation PY Apache Corporation was founded in 1954 by Raymond Plank, its current Chairman and Chief Executive Officer. Mr. Plank’s son, Roger, was the company’s current CFO, but the company was not controlled by the Plank family, and in fact, officers and...
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...* Posted on: Wednesday, March 13, 2013 Apache Questions 1. What risks does Apache face? Do they differ by country of property type? Do the risks of the major integrated oil companies differ from those faced by Apache or other independents? How does Apache’s operating strategy affect its risk exposures? 2. What is Apache doing now to manage risk? What risks are they attempting to hedge? What are its competitors doing? 3. What are the potential hazards Apache faces if it manages risk? 4. As a member of Apache’s board, how would you recommend they proceed? If they decide to manage risk, what steps should they take? Which risks should they shed? Which risks should they retain/keep? Should they manage some types of risks but not others? Some types of investment decisions but not others? How should FAS 133 affect their strategy? Case Study Questions Each team is required to address the four questions posted above. You should view your case report as a report to senior management or the board of directors. It is to provide the decision makers with all relevant information of a particular case and your policy recommendation, using the assigned questions as a guide. There is no formal size limit for a case report, but you should keep in mind that conciseness and clarity make reports more convincing and will be rewarded accordingly. In particular, a summary of the facts from the case should not include the facts that are not relevant to your analysis...
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...MW Petroleum Corporation Situation Overview: Amoco Corporation conducted an extensive review of its cost structure and profitability, leading to major restructurings to better focus on its core businesses. The result of this was a divestment of the middle section of its assets along the marginal curve. Thus, creating MW Petroleum Corporation – a new, free-standing exploration and production oil and gas company. MW was offered to a number of targeted international petroleum concerns, but the most attractive offer came from Apache Corporation. In late 1990, the group of Amoco Corporation and Apache Corporation began talking in regards to the possible acquisition of MW Petroleum Corporation from Amoco to Apache. If the acquisition pushes through, it will provide Apache a great opportunity as well as becoming one of the largest acquisitions since MW’s size is two times larger compared to Apache’s current operation. Nonetheless, Apache must first carefully evaluate MW’s value to come up with a proposal that would be attractive for Amoco and profitable for Apache as well. The following paragraphs will discuss the latter. 1. In the lights of low oil and gas price in the market, big companies, such as Amoco seek to restructure in order to increase profitability. Amoco’s plans are to reduce its capital and exploration that are not generating significant returns or the company not having advantage with the returns. The intention of the company is to review its assets with an eye...
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...Alcohol and the Apache Reservation Frank A. Parkinson Grand Canyon University RN-BSN Alcohol and the Apache Reservation The Apache Indian Reservation is a place I am very familiar with. As a registered nurse I have worked and served the people of this area for nearly three years now. I also grew up in the area surrounding the reservation so I have first hand knowledge of the health status of this community. These people are part of the American Indian or Alaska Native group and I will be using the data from these groups as well as direct data from the White Mountain Apache Tribe to compare the health of these people against that of the national average. The primary focus on this essay with is that of the disease of Alcoholism that plagues these people. The tribe is extremely impoverished and well below averages on education. Department of Labor statistics indicated that Navajo and Apache Counties were the sixth and seventh poorest counties in the nation. With a median per capita income less than 50 percent of that of the State of Arizona, 40 percent of the residents of these two counties were living below the poverty line. Unemployment on the reservation peaked at 61 percent during this time—ten times the state average and many times the national rate. With a median per capita income less than 50 percent of that of the State of Arizona, 40 percent of the residents of these two counties were living below the poverty line. Unemployment on the reservation...
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...------------------------------------------------- Analysis of Apache Corporation Date: 29/04/2013 Current Price: $73.88 Target Price: $87.25 Recommendation: Buy Highlights ◇I recommend to buy in with a target price of $87.25. The holding period return would be 18.37%(including dividend). Apache is a large multinational corporation, engaged in the energy industry. In addition, the company is very active in the acquisition market. ◇Valuation. In this report, the main method I used to value the company is DCF model with reasonably estimated data based on the company’s historical performance. ◇Main growth driver: (1) the increasing needs of oil and gas.(2) exploitation and extension of existing producing fields.(3) acquisition. source: google finance Business Description General Information Apache Corporation, a Delaware corporation formed in 1954, is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids. Apache currently have exploration and production interests in six countries: the U.S., Canada, Egypt, Australia, the U.K. North Sea (North Sea), and Argentina. The company's proved reserves at year-end 2012 totaled 2.85 billion barrels of oil equivalent, roughly half oil and half natural gas. Apache have also been significantly active in the acquisition market for the past two years, having identified several opportunities that met our criteria for risk, reward, rate of return, and growth...
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...Callaway has reached near-capacity conditions in the plant and is required to subcontract a key component for their subsystem. It has been decided that engineering would work with supply chain to select three potential suppliers. Tom Cunningham, the Supply Manager of Callaway Electronics, is in charge with deciding which of three contractors to choose for their subcontracting job. The three suppliers are: Castle, Eagle, and Apache. Below is an analysis of the proposal and terms of each supplier. Table 1: Financial Ratio Analysis – Analyzing Liquidity Castle: Pros: * Met with Callaway to discuss product and to ensure proposed product meets specifications. * Callaway engineers were very impressed with the final design. * Exceeds many of the performance parameters specified. * Will carry inventory on a no charge basis. Cons: * All components are 100% custom made, which would result in long lead times for all parts. * No design changes are allowed once contract has been signed. * Cash advance of $2,000,000. * No cancellation clause in contract once contract is signed. * Least liquid compared to all the suppliers. Eagle: Pros: * Allows for redesigns of products, although charges Callaway full price for all units prior to resign if they are to be scrapped. * A number of units will be tested prior to shipping the products. * Can start project right away. * Can meet shipping requirements. * Can start shipping a month...
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...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% per year since mid-1980s, due to large acquisition. If the acquisition will push through, this will be one of the largest acquisition in that period because MW size was two times large compare to Apache’s current operation. Amoco Corporation Amoco Corporation was formerly Standard Oil Company (Indiana) was built in 1889 located at Whiting, Indiana, United States. The company was acquired by American Oil Company which founded in Baltimore in 1910 and incorporated in 1922. In 1998, Amoco merged with BP which one of the biggest oil company in England. The company contributes to the modern industry, their innovation was breaks into two parts, the gasoline tanker truck which used to designed to carry liquefied loads, dry bulk cargo or gases on roads and drive through filling is a facility which sells fuel and usually lubricants for motor vehicles. Apache Corporation ...
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...associated with business strategy----------------------------------------------------5 2.2 outline and comment on the issues involved in strategic planning----------8 2.3 explain different planning techniques---------------------------------------------9 3. Task 2----------------------------------------------------------------------------------------16 3.1 producing an ‘organizational audit’ for an organization of Apaches Pizza & Lam Take Away-------------------------------------------------------------------16 3.2 carrying out an ‘environmental audit’ for Apaches Pizza & Lam Take Away-------------------------------------------------------------------------------------18 3.3 explain the significance of ‘stakeholder analysis’------------------------------21 4. Task 3----------------------------------------------------------------------------------------23 4.1 analyze possible alternative strategies relating to substantive growth limited growth or retrenchment--------------------------------------------------24 2. for Apaches Pizza & Lam...
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... Rev. November 21, 1994 MW Petroleum Corporation (A) In late 1990, executives, engineers, and financial advisors working for Amoco Corporation and Apache Corporation began serious discussions about the sale to Apache of MW Petroleum Corporation, a wholly-owned subsidiary of Amoco Production Company. Amoco had transferred to MW certain of its own assets that it regarded as non-strategic. MW's size, location, and operations were all very attractive to Apache, which had grown nearly 30% per year since the mid-1980s, largely through acquisitions. The transaction being discussed with Amoco would be Apache's largest to date. It would more than double the size of Apache's current operations, as well as its reserves of oil and natural gas. By the end of January 1991, Apache's executives and advisors were sufficiently familiar with the properties in MW to begin refining their estimates of operating and financial performance in order to structure a formal offer. Apache's chief financial officer, Mr. Wayne Murdy, knew that financing would be a challenge, given the size of the proposed transaction. In fact, the availability of external financing, bank debt in particular, was likely to impose some practical limits on both the amount and form of consideration that Apache could offer to Amoco. It was essential that Apache carefully evaluate MW, both the whole and its parts, and study the likely patterns of cash flows so that some creative financing alternatives could be developed...
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...State of Maryland – Risk Assessment Findings & Recommendations In the course of this Risk Assessment, we reviewed the statements that were made by Aviel. D. Rubin, professor at Johns Hopkins University, in his report dated July 23, 2013. In general, SAIC made many of the same observations, when considering only the source code. While many of the statements made by Mr. Rubin were technically correct. Mr. Rubin did not have a complete understanding of the State of Maryland’s implementation of the AccuVote-TS voting system, and the election process controls or environment. The State of Maryland procedural controls and general voting environment reduce or eliminate many of the vulnerabilities identified in the Rubin report. However, these controls, while sufficient to help mitigate the weaknesses identified in the July 23 report, do not, in many cases meet the standard of best practice or the State of Maryland Security Policy. This Risk Assessment has identified several high-risk vulnerabilities in the implementation of the managerial, operational, and technical controls for AccuVote-TS voting system. If these vulnerabilities are exploited, significant impact could occur on the accuracy, integrity, and availability of election results. In addition, successful exploitation of these vulnerabilities could also damage the reputation and interests of the SBE and the LBEs. This Risk Assessment also identified numerous vulnerabilities with a risk rating of medium...
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...of Functional Health Patterns that could be used as a guide to assess a family’s health patterns, which could be developed into a data base for that particular family. This data base was projected to help in setting goals for the future health of the family. This paper will discuss the healthy and unhealthy behaviors of the Kessay Family, which are all registered members of the White Mountain Apache Tribe in Whiteriver, Arizona. This family assessment will also discuss what was talked about in trying to develop goals for the improved health for the family. The Kessay family is a traditional Apache family, which includes the mother, dad, and 2 children. The mom is 40 years old, the dad is 45 years old, , and the girls are 14 and 16 years old. The assessment was conducted by asking up to 3 open-ended questions, based on the 11 Functional Health Patterns. Cultural taboos were observed in asking these questions. Some were answered, some were not. Some were answered by very short answers, indicating embarrassment or unwillingness to answer such a rude question. (according to Apache traditions). This writer did the best she could with what was given to her. Health Perception and Health Management: Data collection is focused on the patients current level of health, and on any new behaviors needed to maintain that health. Unhealthy habits are also evaluated, which could include any drug abuse, smoking of tobacco or other substances, or ingestion of alcohol. The father...
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...Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F261237 In late 1990, executives, engineers, and financial advisors working for Amoco Corporation and Apache Corporation began serious discussions about the sale to Apache of MW Petroleum Corporation, a wholly-owned subsidiary of Amoco Production Company. Amoco had transferred to MW certain of its own assets that it regarded as non-strategic. MW's size, location, and operations were all very attractive to Apache, which had grown nearly 30% per year since the mid-1980s, largely through acquisitions. The transaction being discussed with Amoco would be Apache's largest to date. It would more than double the size of Apache's current operations, as well as its reserves of oil and natural gas. By the end of January 1991, Apache's executives and advisors were sufficiently familiar with the properties in MW to begin refining their estimates of operating and financial performance in order to structure a formal offer. Apache's chief financial officer, Mr. Wayne Murdy, knew that financing would be a challenge, given the size of the proposed transaction. In fact, the availability of external financing, bank debt in particular, was likely to impose some practical limits on both the amount and form of consideration that Apache could offer to Amoco. It was essential that Apache carefully evaluate MW, both the whole and its parts, and study the likely patterns of cash flows so that some creative financing alternatives could be developed...
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