MW Petroleum Corporation (A) finance - Case Study Example

Only on StudentShare

Extract of sample
MW Petroleum Corporation (A) finance

Apache on the other hand is seeking to grow. This is a good opportunity for the company to do so. This transaction would be beneficial to Apache the portion of MW Petroleum that Apache is considering is located in the same general area where the company currently operates and so consolidation will further reduce costs. This should allow for increased economies of scale in the form of reduced direct operating costs and even more so overhead costs for Apache. It is cheaper for Apache to buy an existing business as it has been doing rather than carry out exploratory drilling. This acquisition will also allow the company to diversify geographically its portfolio of assets which is important when the riskiness of the operations is considered. This diversification will somewhat help to stabilize Apache’s earnings even though both gas and oil prices are highly volatile. The acquisition of Amoco will also enhance Apache’s standing among US independents and lead to even further acquisition opportunities. The company is considering further growth opportunities in the future and this represents a stepping stone that will allow Apache some amount of bargaining power and would therefore put the company in a better position to compete with other companies.
It is reasonable to expect that the MV properties are more valuable to Apache than to Amoco because Apache will benefit from synergies and rationalization of expenses. ...
Download paper

Summary

Amoco’s strategy is to rationalize its operations by shedding assets that are not contributing significantly to the company’s gross margin. This is reasonable as both the direct costs and overhead cots are high. The company is very large and the management appears unable to manage the operations as they are right now. …
Author : shadprohaska

Related Essays

Finance report on Engro Corporation (Pakistan)
The overall per capita income is approximately $1250 with low literacy rates and high population growth rates. Pakistan is considered as a developing country due to different factors such as higher mortality rates, low literacy ratio, high population growth rates, higher levels of poverty, lack of health care facilities, poor education system etc. It is however, important to note that Pakistan’s economy has suffered a lot in recent times due to war on terror which has created significant law and order situation. (CIA The World Factbook 2011)
...
5 pages (1255 words) Essay
Income Tax and Corporation Tax
The paper tells that income tax is charged on the income of all UK residents. Income tax is basically charged to all the individuals. That will include employed, self-employed or un-employed individuals. For employed individuals, the basic source of income will be their salaries along with other sorts where as the self employed individuals will be charged on their trading income. Un-employed individuals may have their income coming from savings or investments. There is no maximum age limit for any individual to be exempt from income tax. Corporation tax is payable by limited companies or some...
9 pages (2259 words) Essay
The analysis by Steel Tube division of Engineering Products Plc accountant
Center of discussion in this paper is a financial analyst for Steel Tube division of Engineering Products Plc named Roger Davis. He is having a tough time convincing the management for a project proposal. The analysis by his accountant and the additional information obtained from other sources has added to his woes. Roger Davis needs to convince his managing director about the viability of a new proposal for computer numerically controlled (CNC) milling machine. The MD is not ready to spend money on the project unless it can start yielding profits within 3 years. However, the accountant’s...
7 pages (1757 words) Assignment
Finance - British Petroleum
There were many reasons that affected the BP share prices during beginning of 2011. The issue that had highly impacted the BP share prices was the decision taken by Transocean Ltd after conducting an internal investigation. Transocean Ltd is the world’s largest offshore drilling contractor whom the BP had contract with. They provide the most versatile fleet of mobile offshore drilling machineries to assist customers find and utilise efficiently oil and natural gas reserves. Transocean Ltd announced on June 22, 2011 the release of an internal investigation report illustrating the reasons...
8 pages (2008 words) Essay
McDonald's Corporation Case Study
Still, the organization has increasingly experimented with foods on the fringe of its menu, including health options such as salads and snack wraps, as well as regional specific restaurant items. Company History Founders Richard and Maurice McDonald in San Bernardino, California established McDonald’s in 1940 as a barbeque restaurant. In 1948 the brothers stopped serving barbeque and began a hamburger and fries based approach, implementing streamlined production methods (Sowell, 2009). While McDonald’s would ultimately experience the most long-lasting gains as a result of the...
4 pages (1004 words) Case Study
Finance (Case Study)
They should work out how much (after paying off all their debts and driving down their expenditure) they can save every month. Good saving habits and practices begin with a clear knowledge and understanding of what one is capable of and how much one can spend at any given time without negatively affecting his/her financial health. The couple must therefore know how much they are capable of saving every month, compare that figure to the actual amount they are saving and then start cutting down on unnecessary spending. Work out a Saving Plan Ascertaining saving is only the first step. It acts as...
7 pages (1757 words) Essay
From a Sole Proprietorship to a Corporation
A corporation is a distinct legal entity with a name and it also enjoys many legal powers like a natural person (Cillers, 24). Thus, it can be observed that when the company is formed, it automatically acquires the capacity and authority to have its own rights and duties (Gibson, 198). One major distinction between a corporation and a proprietorship is that corporations can acquire and exchange property and they can enter into contracts. In this case, the new company to be formed will be called Global Courier Services Inc. This company will be incorporated from a small business that has been...
5 pages (1255 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!