Should you proceed with the purchase

Assignment Help Finance Basics

Reference no: EM133557868

Introduce the issue presented in the case.
What is MW Petroleum?
Why is Amoco selling?
Why is Apache buying?
Who will be the operator of the properties?
Why does Apache think it will result in cost savings?
Is it plausible, given the facts, that Apache can operate the MW properties at a lower cost than Amoco? Why / why not?
How are the projections of operating and overhead expenses made?
What is the growth strategy of Apache?
How big is MW relative to Apache?
Des MW property seem expensive to operate? To develop?
What factors went into estimating the plausibility of the deal?
What historical period does the case represent? What uncertainties does this mean for commodity prices?
What other risks are there?
Describe the general lending environment at the time when the case takes place. Were banks eager to lend to upstream energy companies? Why / why not?
Were the estimates of cash flows in Exhibits 3 - 7 made by unbiased, qualified parties?
Do any facts indicate that the cash flow estimates were conservative?
Do any facts indicate that the projections could prove to be too optimistic?

Part 2. Free discussion

As the CEO of Apache, should you proceed with the purchase? If so, on what terms?

As a bank lender, will you lend to the company? How much if so?

Reference no: EM133557868

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