Confidently estimates that drilling and completing

Assignment Help Financial Management

Reference no: EM131450396

Company C has a drilling prospect Y near Cushing Oklahoma which it must drill now or never. Company D confidently estimates that drilling and completing the well will produce 100,000 barrels of oil at a present value cost of $6 million. The discounted value of a strip of oil futures now is $5.5 million $. The CEO of Company C has information that leads him to confidently predict that the discounted price of oil will be higher than the futures market now indicates and that the oil produced from the oil well will be realize $7 million. What should he do?

Reference no: EM131450396

Questions Cloud

Define the strategic management process : Based on your experience, what should a top level manager in your specific organization do to ensure that the strategic management process.

Write a short critique highlighting your thoughts : After watching this video, write a short critique (2-3 paragraphs) highlighting your thoughts regarding the information presented in this documentary.

Remaining debt at the end of two years of these payments : What would be your remaining debt at the end of two years of these payments?

What is your overall assessment of emily performance : What is your overall assessment of Emily's performance? What would you have done to improve her approach to define risk management for the project

Confidently estimates that drilling and completing : Company D confidently estimates that drilling and completing the well will produce 100,000 barrels of oil at a present value cost of $6 million.

Define a quality leader : There are many attributes that define a quality leader. Some of these attributes can be defined by their techniques of influence.

Identify positive reinforcements that might be included : Identify tasks and positive reinforcements that might be included in Billy's token economy chart given the behavior issues described in the case.

Discuss the interaction between business and management : Discuss the interaction between business and management function in a farming enterprice.

Calculate the npv of investment : The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment.

User Account

All Pages