Analyse the sources and types of financing for oil and gas companies and appraise and classify the risks and challenges of the sources and types of financing

Module Title

Investment Analysis and Decision Making in the Petroleum Industry

Individual report

Cohort (Jan 21)

Module Code

Coursework Title (e.g. CWK1)

Financial Performance Evaluation

Hand out date:

4/12/21

Due date and time: Date: 16/12/21 Online: 18:00:00

Estimated Time (hrs): 72

Word Limit*: 2000 to 2500

Coursework type: Report

Credit value assessed – 5 credits

Submission arrangement online. File types and method of recording:

Mark and Feedback date (27/12/21): Mark and Feedback method via online

Module Learning Outcomes Assessed:

1. Analyse the sources and types of financing for oil and gas companies and appraise and classify the risks and challenges of the sources and types of financing
2. Analyse current practices, rationale and challenges of joint venture/ joint operating agreements in the oil and gas industry.
3. Evaluate the operational performances of the upstream segment of integrated oil and gas companies through an application of established techniques used in industry – field level Analysis only.

Task and Mark distribution:

1. Research and obtain the most recent annual report and sustainability reports of the company you have been assigned. Annual reports can be found on the company’s website.. For companies registered with the United States Securities Exchange Commission, you can also access their annual reports and Form 10-K or F-20, as appropriate, from the US SEC website. Sustainability reports can be found on the company’s website
2. Based on the content of the annual report, sustainability report and other information available you are required to conduct a financial performance and investment strategy analysis and evaluation of the company for period of 3 to 5 years. The financial performance will include

ratio analysis as well as qualitative evaluation of relevant information to the company’s operations, including upstream performance analysis. Your analysis must also include at least a discounted a terminal basis valuation of the company. You are expected to include a critical evaluation of the energy transition strategy of the company and its investments in a sustainable

energy future.

%

Assessment Criteria

5

Provide brief background about the company whose performance you are analysing

30

Perform accurate calculation of a range of relevant accounting ratios and where appropriate the use of horizontal and vertical analysis techniques and an analysis of the company’s sustainability and energy transitional investment strategy. Your report should focus on profitability, efficiency, liquidity, field level performance, ESG investing and sustainability programme, energy transition investments and any other information deemed relevant to investors. You will be expected to research and demonstrate awareness of the relevant financial ratios for analysing exploration and production companies and critically analyse their sustainability practices as well as their energy transition strategy into a net zero carbon future. Calculation of the ratios will earn you up to 15 marks.

You will be expected to demonstrate deep understanding of the ratios calculated through interpretation and critical analysis of the numerical and non-numerical evidences generated. In addition to the financial statements, you are expected to review the company’s sustainability reports and appraise the extent to which your company’s operations comply with ESG investing

practices. You are expected to combine both industry (relevant analyst) information and academic material and these must be evidenced through abundance of references. This will earn you up to 15 marks extra.

20

You will evaluate the upstream efficiency of the company through calculation and analysis of relevant ratios and evaluation of operational information and management discussions of performance as presented in the company’s operational report. Calculation of the ratios will earn you up to 10 marks and discussion/ critique will earn you a further 10 marks.

15

Use the information available to critically evaluate the financial performance of the company. Reference to relevant industry / sector comparatives is required. You can access financial information on the oil industry through Bloomberg on the Trading Platform in the WM Building).

10

Discuss the limitations of your analysis and how these might be overcome. It is important that you contextualise the limitations to the very analysis you have performed. A mere generalised discussion of the limitations of ratio analysis will only earn you a maximum of 3 marks.

10

Present clear and reasonable conclusions about the performance of your company

10

Demonstrate APA referencing, layout/ structure, presentation and spelling

Show your calculations and all formulae used in an appendix to your report

Scale of Marks

1. You will be awarded less than 39 marks or less if you only calculate financial ratios with no context to the company in question and present superficial interpretation of the ratios.
2. You will be awarded a mere pass from 40 to average mark of 55 marks if you only calculate financial ratios and some upstream efficiency ratios with just acceptable interpretations with no incisive evaluation and synthesis of the results calculated. You are likely to be awarded marks above 48 but no more than 55 for merely calculating financial and upstream level calculations with no detailed interpretation, synthesis and evaluation of qualitative evidences. 
3. You will be awarded a mark from 56 to 68 if you thoroughly discuss evidences including your own modelled results, summarise and present these coherently and include synthesis but without any incisive evaluation or critique of the evidences. This will earn you up to 68%. With (some but not a detailed) critique and synthesis, you are likely to be awarded a mark from 60% to 65%
4. If you do all of point 3 and include a critique of the evidences to coherently tell a story and include well-supported conclusions and recommendations, you will be awarded a distinction for this piece of work. Your marks will range from 70 to 100, depending on how critical and coherent your report is. You will be expected to place the report in the context of the company and its operations and discuss practical company operational and sector challenges as well as opportunities affecting the company’s performance for the period and in the foreseeable future, based on your terminal valuation of the company.
5. Note that this is a group report and you will have to peer grade your team members. 30% of the coursework mark will be based on this peer grading.

Notes:

1. You are expected to use the APA style for referencing.
2. The University cannot take responsibility for any coursework lost or corrupted on disks, laptops or personal computer. Students should therefore regularly back-up any work and are advised to save it on the University system.
3. If there are technical or performance issues that prevent submitting coursework through the online coursework submission system on the day of a coursework deadline, an appropriate extension to the coursework submission deadline will be agreed. This extension will normally be 24 hours or the next working day if the deadline falls on a Friday or over the weekend period. This will be communicated via your Module Leader.
4. Assignments that are more than 10% over the word limit will result in a deduction of 10% of the mark i.e. a mark of 60% will lead to a reduction of 6% to 54%. The word limit includes quotations, but excludes the bibliography, reference list and tables.
5. You are encouraged to check the originality of your work by using the draft Turnitin links.
6. Collusion between students (where sections of your work are similar to the work submitted by other students in this or previous module cohorts) is taken extremely seriously and will be reported to the academic conduct panel. This applies to both courseworks and exam answers.
7. A marked difference between your writing style, knowledge and skill level demonstrated in class discussion, any test conditions and that demonstrated in a coursework assignment may result in you having to undertake a Viva Voce in order to prove the coursework assignment is entirely your own work.
8. If you make use of the services of a proof reader in your work you must keep your original version and make it available as a demonstration of your written efforts.
9. You must not submit work for assessment that you have already submitted (partially or in full), either for your current course or for another qualification of this university, with the exception of resits, where for the coursework, you maybe asked to rework and improve a previous attempt.