Ch. 16 Assignment ALLAnalysis of Oil and Gas Companies' Financial Statements- Homework#17What is the reserve replacement ratio? What is the reserve replacement ratio attempting to measure? How would you interpret it?The reserve replacement ratio measures a company's success in replacing production and accordingly measures a company's ability to continue to operate in the future. It is used to measure the performance of a company. The most basic form formula:Reserve replacement ratio=Extensions and discoveries + Improved recoveryRevisions in previous estimates + Purchases of reserves in placeProduction#13The following reserve table appeared in the financial statements of Lomax Company.Estimated Quantities of Net Proved Crude Oil and Natural Gas(Worldwide Totals only)in Thousands of Barrels and Millions of Cubic FeetYear ended Dec. 31201520162017OilGasOilGasOil GasBeginning of year171779234783335724Revisions of prevision estimates10121531(11)22Improved recovery213025231550Purchases of reserves in place001212024Sales of reserves in place(12)(12)(20)(99)(70)(24)Extension & discoveries697890426150Production(25)(104)(21)(68)(24)(76)End of year totals234783335724251870YearNet WellsGross Wells201575020102016840191020179002050i.Reserve replacement ratio=Extensions and discoveries + Improved recoveryProductionExtensions and discoveries + Improved recovery+ Revisions in previous estimatesii.Reserve replacement ratio=ProductionExtensions and discoveries + Improved recovery + Revisions in previous estimates + Purchase of reserves in placeiii.Reserve replacement ratio=Production + Sales of reserves in placeREQUIRED: Compute the following ratios for all three years:a.The reserves replacement ratio computed for all three methods and for oil and gas separately2015OilGasi.=3.6001.038ii.=4.0001.154iii.=2.7031.0342016OilGasi.=5.4760.956ii.=6.1901.412iii.=3.4630.6472017OilGasi.=0.8752.632ii.=0.4172.921iii.=0.1062.460b.The reserve life ratio computed for oil and gas separatelyReserve life ratio =Total proved reserves at beg. of year2015OilGasProduction6.847.4902016OilGas11.14311.5152017OilGas13.9589.526c.The net wells to gross wells ratioNet to gross wells =Net wells2015Gross wells0.373134328420160.44020170.439d.The average reserves per well ratio computed using BOE, i.e., combining reserves based on relative energy contentAverage reserves per well ratio=Total proved reseves @ beg2015Net wells0.401BOE/well20160.434BOE/well20170.506BOE/welle.The average daily production per well computed using BOEAverage daily production per well=Annual production/3652015Net wells0.155bbl/day/well20160.105bbl/day/well20170.112bbl/day/well#15Lomax Company reported the following expenses in its financial statements (in thousands):YearLifting CostsDD&A2015$211$50020162264502017183525REQUIRED: Using the reserve disclosure for Lomax Company given in problem 13 and the data presented in this problem:a.Compute lifting costs per BOELifting cost/BOE=Total annual lifting costs2015$ 4.984/B.
Mel Harrison, manager of Border Corporation’s Home Office Products Division, is considering adding a new product line but wants to analyze the numbers first. The division has led the company in return on investment (ROI) for three years.
The division's most recent ROI was 24%. Adding the new product line would require $1 million in additional assets but is expected to generate $2 million in annual sales. The line's variable costs are 60% of sales and fixed costs are $620,000.
If the minimum required ROI is 13% and performance is evaluated using residual income, the division's residual income was $48,000 originally but would become $168,000 if the new line is added, so Mel
The document provides an overview of the company's fourth quarter and full-year 2015 results. Some key points:
- Production for Q4 was 1.33 MMBoe and 5.53 MMBoe for the full year, in line with guidance. No capital expenditures were incurred in Q4 due to low commodity prices.
- Proved reserves increased 14% year-over-year to 166.6 MMBoe with a PV-10 of $504 million. Drilling replaced 603% of production at a drill-bit F&D cost of $4.32/Boe.
- The company has $177 million in liquidity and reduced total debt from $515.6 million to $
Dear connections,
this is a very interesting report of Marks and Spencer financial progress during 2013-15, elaborated by myself and two more peers (Alhassane Diallo and Zahoro Msallam) and I have taken the freedom (with their permission) to share it with you all.
I invite everyone (regardless of your background) to give a read, leave comments, questions and messages.
PepsiCos financial statements are presented in Appendix B .pdfabhishekcctv
On January 1, 2020, ABC Corp. purchased 30,000 shares of the voting common stock of XYZ,
Inc. During 2020, XYZ had the following information: Reported earnings $ 550,000 Paid dividends
$ 380,000 Common stock at $15 par value $1,500,000 Additional paid in capital - common stock $
680,000 ABC assumes that all of XYZ's undistributed earnings will be distributed as
dividends in future periods when the enacted tax rate will be 46% ABC's current enacted
income tax rate is: 40% Prepare a journal entry to reflect the change in deferred tax for ABC as of
12/31/2020. Show work..
1
CHAPTER 3
Analysis of Financial Statements
2
Topics in Chapter
Ratio analysis
Du Pont system
Effects of improving ratios
Limitations of ratio analysis
Qualitative factors
3
Value = + + +
FCF1
FCF2
FCF∞
(1 + WACC)1
(1 + WACC)∞
(1 + WACC)2
Free cash flow
(FCF)
Market interest rates
Firm’s business risk
Market risk aversion
Firm’s debt/equity mix
Cost of debt
Cost of equity
Weighted average
cost of capital
(WACC)
Net operating
profit after taxes
Required investments
in operating capital
−
=
Determinants of Intrinsic Value:
Using Ratio Analysis
...
For value box in Ch 3 ratios FM13.
4
Overview
Ratios facilitate comparison of:
One company over time
One company versus other companies
Ratios are used by:
Lenders to determine creditworthiness
Stockholders to estimate future cash flows and risk
Managers to identify areas of weakness and strength
5
Income Statement20102011ESales$5,834,400 $7,035,600COGS4,980,000 5,800,000Other expenses720,000 612,960Deprec.116,960 120,000 Tot. op. costs5,816,960 6,532,960 EBIT17,440 502,640Int. expense176,000 80,000 EBT(158,560)422,640Taxes (40%)(63,424)169,056Net income($ 95,136)$ 253,584
6
Balance Sheets: Assets20102011ECash$ 7,282 $ 14,000S-T invest.20,000 71,632AR632,160 878,000Inventories1,287,360 1,716,480 Total CA1,946,802 2,680,112 Net FA939,790 836,840Total assets$2,886,592 $3,516,952
7
Balance Sheets: Liabilities & Equity20102011EAccts. payable$ 324,000 $ 359,800Notes payable720,000 300,000Accruals284,960 380,000 Total CL1,328,960 1,039,800Long-term debt1,000,000 500,000Common stock460,000 1,680,936Ret. earnings97,632 296,216 Total equity557,632 1,977,152Total L&E$2,886,592 $3,516,952
8
Other Data20102011EStock price$6.00$12.17# of shares100,000 250,000EPS-$0.95$1.01DPS$0.11$0.22Book val. per sh.$5.58$7.91Lease payments$40,000$40,000Tax rate0.40.4
9
Liquidity Ratios
Can the company meet its short-term obligations using the resources it currently has on hand?
10
Forecasted Current and Quick Ratios for 2011.
CR10 = = = 2.58.
QR10 =
= = 0.93.
CA
CL
$2,680
$1,040
$2,680 - $1,716
$1,040
CA - Inv.
CL
11
Comments on CR and QR2011E20102009Ind.CR2.581.462.32.7QR0.930.50.81.0
Expected to improve but still below the industry average.
Liquidity position is weak.
12
Asset Management Ratios
How efficiently does the firm use its assets?
How much does the firm have tied up in assets for each dollar of sales?
13
Inventory Turnover Ratio vs. Industry Average
Inv. turnover =
= = 4.10.
Sales
Inventories
$7,036
$1,716
2011E 2010 2009 Ind.
Inv. T. 4.1 4.5 4.8 6.1
14
Comments on Inventory Turnover
Inventory turnover is below industry average.
Firm might have old inventory, or its control might be poor.
No improvement is currently forecasted.
.
Hillenbrand provided a Q3 2016 earnings presentation covering consolidated and segment financial results. Key points include:
- Consolidated revenue decreased 7% to $371 million due to lower demand for capital equipment in the Process Equipment Group.
- GAAP EPS was $0.48, while adjusted EPS increased slightly to $0.53.
- Batesville revenue declined 3% but adjusted EBITDA margin improved 250 bps due to cost savings.
- Process Equipment Group revenue fell 9% but adjusted EBITDA margin rose 90 bps on pricing and acquisitions.
- Guidance for FY2016 expects organic revenue to decline 2-5% but adjusted EPS to reach $1.98
Bosch India's financial statements from 2013-2015 were analyzed using various tools. The common size income statement showed that Bosch's revenue, profit after tax, and earnings per share all grew substantially from 2013-2014, unlike its competitors Motherson Sumi and Wabco. The common size balance sheet indicated that while Bosch's equity and assets grew well, liabilities increased at a faster rate. DuPont analysis showed Bosch's return on equity improved to 18% in 2014-2015. Liquidity ratios like the current, acid-test, and cash ratios demonstrated that Bosch maintained a healthy liquidity position. Analysis of solvency and leverage ratios such as debt to equity and debt to assets indicated that Bos
Mel Harrison, manager of Border Corporation’s Home Office Products Division, is considering adding a new product line but wants to analyze the numbers first. The division has led the company in return on investment (ROI) for three years.
The division's most recent ROI was 24%. Adding the new product line would require $1 million in additional assets but is expected to generate $2 million in annual sales. The line's variable costs are 60% of sales and fixed costs are $620,000.
If the minimum required ROI is 13% and performance is evaluated using residual income, the division's residual income was $48,000 originally but would become $168,000 if the new line is added, so Mel
The document provides an overview of the company's fourth quarter and full-year 2015 results. Some key points:
- Production for Q4 was 1.33 MMBoe and 5.53 MMBoe for the full year, in line with guidance. No capital expenditures were incurred in Q4 due to low commodity prices.
- Proved reserves increased 14% year-over-year to 166.6 MMBoe with a PV-10 of $504 million. Drilling replaced 603% of production at a drill-bit F&D cost of $4.32/Boe.
- The company has $177 million in liquidity and reduced total debt from $515.6 million to $
Dear connections,
this is a very interesting report of Marks and Spencer financial progress during 2013-15, elaborated by myself and two more peers (Alhassane Diallo and Zahoro Msallam) and I have taken the freedom (with their permission) to share it with you all.
I invite everyone (regardless of your background) to give a read, leave comments, questions and messages.
PepsiCos financial statements are presented in Appendix B .pdfabhishekcctv
On January 1, 2020, ABC Corp. purchased 30,000 shares of the voting common stock of XYZ,
Inc. During 2020, XYZ had the following information: Reported earnings $ 550,000 Paid dividends
$ 380,000 Common stock at $15 par value $1,500,000 Additional paid in capital - common stock $
680,000 ABC assumes that all of XYZ's undistributed earnings will be distributed as
dividends in future periods when the enacted tax rate will be 46% ABC's current enacted
income tax rate is: 40% Prepare a journal entry to reflect the change in deferred tax for ABC as of
12/31/2020. Show work..
1
CHAPTER 3
Analysis of Financial Statements
2
Topics in Chapter
Ratio analysis
Du Pont system
Effects of improving ratios
Limitations of ratio analysis
Qualitative factors
3
Value = + + +
FCF1
FCF2
FCF∞
(1 + WACC)1
(1 + WACC)∞
(1 + WACC)2
Free cash flow
(FCF)
Market interest rates
Firm’s business risk
Market risk aversion
Firm’s debt/equity mix
Cost of debt
Cost of equity
Weighted average
cost of capital
(WACC)
Net operating
profit after taxes
Required investments
in operating capital
−
=
Determinants of Intrinsic Value:
Using Ratio Analysis
...
For value box in Ch 3 ratios FM13.
4
Overview
Ratios facilitate comparison of:
One company over time
One company versus other companies
Ratios are used by:
Lenders to determine creditworthiness
Stockholders to estimate future cash flows and risk
Managers to identify areas of weakness and strength
5
Income Statement20102011ESales$5,834,400 $7,035,600COGS4,980,000 5,800,000Other expenses720,000 612,960Deprec.116,960 120,000 Tot. op. costs5,816,960 6,532,960 EBIT17,440 502,640Int. expense176,000 80,000 EBT(158,560)422,640Taxes (40%)(63,424)169,056Net income($ 95,136)$ 253,584
6
Balance Sheets: Assets20102011ECash$ 7,282 $ 14,000S-T invest.20,000 71,632AR632,160 878,000Inventories1,287,360 1,716,480 Total CA1,946,802 2,680,112 Net FA939,790 836,840Total assets$2,886,592 $3,516,952
7
Balance Sheets: Liabilities & Equity20102011EAccts. payable$ 324,000 $ 359,800Notes payable720,000 300,000Accruals284,960 380,000 Total CL1,328,960 1,039,800Long-term debt1,000,000 500,000Common stock460,000 1,680,936Ret. earnings97,632 296,216 Total equity557,632 1,977,152Total L&E$2,886,592 $3,516,952
8
Other Data20102011EStock price$6.00$12.17# of shares100,000 250,000EPS-$0.95$1.01DPS$0.11$0.22Book val. per sh.$5.58$7.91Lease payments$40,000$40,000Tax rate0.40.4
9
Liquidity Ratios
Can the company meet its short-term obligations using the resources it currently has on hand?
10
Forecasted Current and Quick Ratios for 2011.
CR10 = = = 2.58.
QR10 =
= = 0.93.
CA
CL
$2,680
$1,040
$2,680 - $1,716
$1,040
CA - Inv.
CL
11
Comments on CR and QR2011E20102009Ind.CR2.581.462.32.7QR0.930.50.81.0
Expected to improve but still below the industry average.
Liquidity position is weak.
12
Asset Management Ratios
How efficiently does the firm use its assets?
How much does the firm have tied up in assets for each dollar of sales?
13
Inventory Turnover Ratio vs. Industry Average
Inv. turnover =
= = 4.10.
Sales
Inventories
$7,036
$1,716
2011E 2010 2009 Ind.
Inv. T. 4.1 4.5 4.8 6.1
14
Comments on Inventory Turnover
Inventory turnover is below industry average.
Firm might have old inventory, or its control might be poor.
No improvement is currently forecasted.
.
Hillenbrand provided a Q3 2016 earnings presentation covering consolidated and segment financial results. Key points include:
- Consolidated revenue decreased 7% to $371 million due to lower demand for capital equipment in the Process Equipment Group.
- GAAP EPS was $0.48, while adjusted EPS increased slightly to $0.53.
- Batesville revenue declined 3% but adjusted EBITDA margin improved 250 bps due to cost savings.
- Process Equipment Group revenue fell 9% but adjusted EBITDA margin rose 90 bps on pricing and acquisitions.
- Guidance for FY2016 expects organic revenue to decline 2-5% but adjusted EPS to reach $1.98
Bosch India's financial statements from 2013-2015 were analyzed using various tools. The common size income statement showed that Bosch's revenue, profit after tax, and earnings per share all grew substantially from 2013-2014, unlike its competitors Motherson Sumi and Wabco. The common size balance sheet indicated that while Bosch's equity and assets grew well, liabilities increased at a faster rate. DuPont analysis showed Bosch's return on equity improved to 18% in 2014-2015. Liquidity ratios like the current, acid-test, and cash ratios demonstrated that Bosch maintained a healthy liquidity position. Analysis of solvency and leverage ratios such as debt to equity and debt to assets indicated that Bos
Q2 2016 earnings call presentation final v2Hillenbrand_IR
Hillenbrand provides a Q2 2016 earnings presentation covering their consolidated and segment financial performance. Some key points:
- Consolidated revenue decreased 4% to $387 million due to an 8% decline in Batesville revenue, while adjusted EPS of $0.49 was in line with prior year.
- The Process Equipment Group saw 2% lower revenue but improved adjusted EBITDA margins. Batesville also improved adjusted EBITDA margins despite an 8% revenue decline.
- For fiscal year 2016, Hillenbrand expects total revenue to decline 2-4% on a constant currency basis and adjusted EPS in the range of $2.05 to $2.15.
CFO Message in NTN Report 2021 (English Version)TETSUYA SOGO
1. The document discusses the financial results for the fiscal year ending March 31, 2021 and forecasts for the fiscal year ending March 31, 2022 for NTN Corporation.
2. For fiscal year 2021, net sales decreased due to COVID-19 but the company achieved an operating loss turnaround in the second half through cost reductions. However, an operating loss of 3.1 billion yen and loss attributable to owners of 11.6 billion yen were recorded.
3. For fiscal 2022, net sales are forecast to recover to 660 billion yen level with operating income planned at 15 billion yen through demand recovery and fixed cost control, though uncertainties like semiconductor shortages remain.
Acct 504 final exam solutions 100% correct answersProfessorLance
This document contains the solutions to an accounting exam with multiple choice questions covering various topics such as corporations, dividends, financial statements, inventory cost flow assumptions, bonds, depreciation, cash flows, and financial statement analysis. The solutions provide the correct answer choice for each question along with explanations for some questions.
1393AFE Economics For Decision Making 1.docxsdfghj21
This document analyzes and compares the financial performance and macroeconomic environments of Shell and BP based on ratio analysis and PESTLE/microeconomic frameworks. Ratio analysis shows Shell has better profitability, liquidity, and solvency positions compared to BP based on calculations of net profit ratio, return on assets, current ratio, quick ratio, debt ratio, and debt-equity ratio. A PESTLE analysis finds both companies face political, economic, social, technological, legal, and environmental macroeconomic forces. They also compete in commodity markets and face challenges meeting sustainable energy demand.
Solution To Part 1 Ratio Analysis Details Shell Bp.pdfsdfghj21
The document analyzes and compares the financial performance and macroeconomic environments of Shell and BP based on ratio analysis and PESTLE framework.
Ratio analysis shows Shell has better profitability, liquidity, and solvency ratios, indicating more efficient operations and debt management. PESTLE analysis finds both companies face economic and environmental challenges from the pandemic but are adapting through technology and sustainability efforts. Competition is also intense as they seek resources and differentiate products.
This document analyzes Boeing's performance management and corporate strategy. It discusses Boeing's revenue breakdown between commercial airplanes, defense, space and security. It analyzes Boeing's profitability ratios like gross margin and operating margin compared to industry and competitor Airbus. The document also examines Boeing's efficiency metrics like receivable turnover, inventory turnover and asset turnover. Finally, it evaluates Boeing's macroenvironment, SWOT analysis and concludes with recommendations.
This document provides an overview of financial statement analysis techniques including horizontal analysis, vertical analysis, and calculating various financial ratios. It defines key terms, outlines objectives and limitations of financial statement analysis, and provides formulas and explanations for various liquidity, activity, solvency, profitability, and market-test ratios. Examples and exercises are also included to demonstrate applying these techniques.
The document contains an accounting exam for ACCT1101 with 5 questions. Question 1 has parts (a) and (b) calculating cash paid to suppliers, employees and others as well as net cash from investing activities for Bunney Ltd. Question 2 involves calculating ending inventory under FIFO, LIFO and weighted average for Ben's Bargain. Question 3 analyzes liquidity and profitability ratios for Securitie Ltd over 2 years. Question 4 requires stating whether accounting statements are true or false. Question 5 includes preparing an inventory and purchase budget for Mattress World and calculating budgeted cash payments for Moon Ltd. The exam tests accounting concepts such as financial statements, ratio analysis, inventory valuation and budgeting.
The document provides the solutions to accounting problems from an ACCT 504 final exam. It includes multiple choice questions about corporate advantages, dividend accounting, financial statement elements, inventory cost flow assumptions, bond issuances, and cash flow statements. It also provides instructions for long-form problems involving the preparation of financial statements and calculations of financial ratios for various companies.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It then analyzes the balance sheet, income statement, and key financial ratios of Basket Wonders. The analysis compares Basket Wonders' current ratio, acid-test ratio, debt ratios, coverage ratios, and activity ratios to industry averages. The analysis finds that Basket Wonders has a strong current ratio but weak acid-test ratio, indicating potential issues with inventories. It also finds that Basket Wonders has below average interest coverage and declining earnings compared to industry.
Exhibit 4.16a Key Financial Ratios
Liquidity ratios Formulas
Current ratio Current Assets / Current Liabilities
Quick ratio (Cash + Marketable Securities + Net Receivables) / Current
Liabilities
Acid test ratio (Cash + Marketable Securities) / Current Liabilities
Days in accounts receivable Net Patient Accounts Receivables / (Net Patient Revenues /
365)
Days cash on hand [(Cash + Marketable Securities + Long-Term
Investments/Operating Expenses Depreciation and Amortization Expenses) / 365]
Average payment period, days Current Liabilities / [(Operating Expenses Depreciation and
Amortization Expenses) / 365]
Revenues, expenses, and profitability Formulas
Operating revenues per adjusted discharge Total Operating Revenues / Adjusted
Discharges
Operating expense per adjusted discharge Total Operating Expenses / Adjusted
Discharges
Salary and benefit expense as percentage of operating expense Total Salary and Benefit Expense
/ Total Operating Expenses
Operating margin Operating Income / Total Operating
Revenues
Nonoperating revenue ratio Nonoperating Revenues and Other Income /
Total Operating Revenues
Return on total assets Excess of Revenues over Expenses / Total Assets
Return on net assets Excess of Revenues over Expenses / Net Assets
Activity Ratios Formulas
Total asset turnover ratio Total Operating Revenues / Total Assets
Net fixed assets turnover ratio Total Operating Revenues / Net Plant and
Equipment
Age of plant ratio Accumulated Depreciation / Depreciation Expense
Capital Structure ratios Formulas
Long-term debt to net assets ratio Long-Term Debt / Net Assets
Net assets to total assets ratio Net Assets / Total Assets
Times interest earned ratio (Excess of Revenues over Expenses + Interest
Expense) / Interest Expense
Debt service coverage ratio (Excess of Revenues over Expenses + Interest
Expense + Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments)
a Adjusted Discharges = (Total Gross Patient Revenue / Total Gross Inpatient Revenues) × Total
Discharges. b In for-profit health care organizations, calculated as Net Income / Total Assets.
c Called return on equity in for-profit health care organizations, and calculated as Net Income /
Owners’ Equity. d Called long-term debt to equity in for-profit health care organizations, and
calculated as Long-Term Debt / Owners’ Equity.
e Called equity to total assets in for-profit health care organizations, and calculated as Owners’
Equity / Total Assets.
f In for-profit health care organizations, calculated as (Net Income + Interest Expense) / Interest
Expense.
g In for-profit health care organizations, calculated as (Net Income + Interest Expense +
Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments
Ratio analysis. The statement of operations and balance sheet for Longwood Community
Hospital for the years ended 20X0 and 20X1 are shown in Exhibits 4.19a and 4.19b. Compute
the following ratios for both years: current, acid test, days in account.
This document provides an overview of leverage and different types of leverage from a lecture on financial management. It begins by defining leverage as the relationship between two interrelated variables and how it refers to using fixed costs or assets to increase shareholder returns. It then discusses three main types of leverage - operating, financial, and combined leverage. Operating leverage is the relationship between sales and operating profit, and is affected by fixed costs. Financial leverage is the relationship between operating profit and earnings per share. The document provides examples and formulas for calculating operating and combined leverage.
This document provides an analysis of business operations for a processing plant. It demonstrates analyzing financial performance using a common-sized income statement and horizontal analysis. It also examines market analysis using fuel oil and gasoline margins, internal operational performance using on-stream factor and reasons for shutdowns, commercial performance using sales against plan and market, and production, sales, and inventory levels over time. The analysis is intended to serve as a basis for management discussions and aim for continuous improvement.
- The company reported third quarter 2015 results with record production of 16.6 MBoe/d, up 17% year-over-year.
- Operating costs continued to decrease, with lease operating expenses of $5.04/Boe, a 14% reduction from the prior year.
- The company drilled 4 wells and completed 5 wells in the Wolfcamp B-C zones, with initial production averaging 931 Boe/d.
Operations performance analysis that facilitates an informed decision making ...Bojan Mitrovic, M.A.
I have created the following presentation to demonstrate the contribution of comprehensive analysis and reporting to business performance improvements.
Please contact me if you have any questions. If you are a manager I`d be happy to discuss how analysis and reporting can aid the decision-making process at you organization and lead to continuous operational improvements.
Hillenbrand provides a Q3 2017 earnings presentation covering their financial performance and outlook. Some key points:
- Revenue increased 7% to $396 million driven by strong demand for plastics projects and hydraulic fracturing equipment.
- Net income grew 7% to $33 million and adjusted EBITDA increased 8% to $72 million.
- Process Equipment Group revenue rose 12% while Batesville declined 2% due to higher rates of cremation.
- The company reaffirmed its full year 2017 guidance for 1-3% total revenue growth and adjusted EPS of $2.00-$2.10.
For this assignment, review the articleAbomhara, M., & Koie.docxsleeperharwell
For this assignment, review the article:
Abomhara, M., & Koien, G.M. (2015). Cyber security and the internet of things: Vulnerabilities, threats, intruders, and attacks.
Journal of Cyber Security, 4
, 65-88. Doi: 10.13052/jcsm2245-1439.414
and evaluate it in 3 pages (800 words), in APA format with in-text citation using your own words, by addressing the following:
What did the authors investigate, and in general how did they do so?
Identify the hypothesis or question being tested
Summarize the overall article.
Identify the conclusions of the authors
Indicate whether or not you think the data support their conclusions/hypothesis
Consider alternative explanations for the results
Provide any additional comments pertaining to other approaches to testing their hypothesis (logical follow-up studies to build on, confirm or refute the conclusions)
The relevance or importance of the study
The appropriateness of the experimental design
When you write your evaluation, be brief and concise, this is not meant to be an essay but an objective evaluation that one can read very easily and quickly. Also, you should include a complete reference (title, authors, journal, issue, pages) you turn in your evaluation. This is good practice for your literature review, which you’ll be completing during the dissertation process.
.
For this assignment, provide your perspective about Privacy versus N.docxsleeperharwell
For this assignment, provide your perspective about Privacy versus National Security
. This is a particularly "hot topic" because of recent actions by the federal government taken against Apple. So, please use information from reliable sources to support your perspective.
This assignment should be 1.5 pages in length, using Times New Roman font (size 12), double spaced on a Word documen
.
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The document analyzes and compares the financial performance and macroeconomic environments of Shell and BP based on ratio analysis and PESTLE framework.
Ratio analysis shows Shell has better profitability, liquidity, and solvency ratios, indicating more efficient operations and debt management. PESTLE analysis finds both companies face economic and environmental challenges from the pandemic but are adapting through technology and sustainability efforts. Competition is also intense as they seek resources and differentiate products.
This document analyzes Boeing's performance management and corporate strategy. It discusses Boeing's revenue breakdown between commercial airplanes, defense, space and security. It analyzes Boeing's profitability ratios like gross margin and operating margin compared to industry and competitor Airbus. The document also examines Boeing's efficiency metrics like receivable turnover, inventory turnover and asset turnover. Finally, it evaluates Boeing's macroenvironment, SWOT analysis and concludes with recommendations.
This document provides an overview of financial statement analysis techniques including horizontal analysis, vertical analysis, and calculating various financial ratios. It defines key terms, outlines objectives and limitations of financial statement analysis, and provides formulas and explanations for various liquidity, activity, solvency, profitability, and market-test ratios. Examples and exercises are also included to demonstrate applying these techniques.
The document contains an accounting exam for ACCT1101 with 5 questions. Question 1 has parts (a) and (b) calculating cash paid to suppliers, employees and others as well as net cash from investing activities for Bunney Ltd. Question 2 involves calculating ending inventory under FIFO, LIFO and weighted average for Ben's Bargain. Question 3 analyzes liquidity and profitability ratios for Securitie Ltd over 2 years. Question 4 requires stating whether accounting statements are true or false. Question 5 includes preparing an inventory and purchase budget for Mattress World and calculating budgeted cash payments for Moon Ltd. The exam tests accounting concepts such as financial statements, ratio analysis, inventory valuation and budgeting.
The document provides the solutions to accounting problems from an ACCT 504 final exam. It includes multiple choice questions about corporate advantages, dividend accounting, financial statement elements, inventory cost flow assumptions, bond issuances, and cash flow statements. It also provides instructions for long-form problems involving the preparation of financial statements and calculations of financial ratios for various companies.
This document provides an overview of financial statement analysis. It defines key financial statements like the income statement and balance sheet. It then analyzes the balance sheet, income statement, and key financial ratios of Basket Wonders. The analysis compares Basket Wonders' current ratio, acid-test ratio, debt ratios, coverage ratios, and activity ratios to industry averages. The analysis finds that Basket Wonders has a strong current ratio but weak acid-test ratio, indicating potential issues with inventories. It also finds that Basket Wonders has below average interest coverage and declining earnings compared to industry.
Exhibit 4.16a Key Financial Ratios
Liquidity ratios Formulas
Current ratio Current Assets / Current Liabilities
Quick ratio (Cash + Marketable Securities + Net Receivables) / Current
Liabilities
Acid test ratio (Cash + Marketable Securities) / Current Liabilities
Days in accounts receivable Net Patient Accounts Receivables / (Net Patient Revenues /
365)
Days cash on hand [(Cash + Marketable Securities + Long-Term
Investments/Operating Expenses Depreciation and Amortization Expenses) / 365]
Average payment period, days Current Liabilities / [(Operating Expenses Depreciation and
Amortization Expenses) / 365]
Revenues, expenses, and profitability Formulas
Operating revenues per adjusted discharge Total Operating Revenues / Adjusted
Discharges
Operating expense per adjusted discharge Total Operating Expenses / Adjusted
Discharges
Salary and benefit expense as percentage of operating expense Total Salary and Benefit Expense
/ Total Operating Expenses
Operating margin Operating Income / Total Operating
Revenues
Nonoperating revenue ratio Nonoperating Revenues and Other Income /
Total Operating Revenues
Return on total assets Excess of Revenues over Expenses / Total Assets
Return on net assets Excess of Revenues over Expenses / Net Assets
Activity Ratios Formulas
Total asset turnover ratio Total Operating Revenues / Total Assets
Net fixed assets turnover ratio Total Operating Revenues / Net Plant and
Equipment
Age of plant ratio Accumulated Depreciation / Depreciation Expense
Capital Structure ratios Formulas
Long-term debt to net assets ratio Long-Term Debt / Net Assets
Net assets to total assets ratio Net Assets / Total Assets
Times interest earned ratio (Excess of Revenues over Expenses + Interest
Expense) / Interest Expense
Debt service coverage ratio (Excess of Revenues over Expenses + Interest
Expense + Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments)
a Adjusted Discharges = (Total Gross Patient Revenue / Total Gross Inpatient Revenues) × Total
Discharges. b In for-profit health care organizations, calculated as Net Income / Total Assets.
c Called return on equity in for-profit health care organizations, and calculated as Net Income /
Owners’ Equity. d Called long-term debt to equity in for-profit health care organizations, and
calculated as Long-Term Debt / Owners’ Equity.
e Called equity to total assets in for-profit health care organizations, and calculated as Owners’
Equity / Total Assets.
f In for-profit health care organizations, calculated as (Net Income + Interest Expense) / Interest
Expense.
g In for-profit health care organizations, calculated as (Net Income + Interest Expense +
Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments
Ratio analysis. The statement of operations and balance sheet for Longwood Community
Hospital for the years ended 20X0 and 20X1 are shown in Exhibits 4.19a and 4.19b. Compute
the following ratios for both years: current, acid test, days in account.
This document provides an overview of leverage and different types of leverage from a lecture on financial management. It begins by defining leverage as the relationship between two interrelated variables and how it refers to using fixed costs or assets to increase shareholder returns. It then discusses three main types of leverage - operating, financial, and combined leverage. Operating leverage is the relationship between sales and operating profit, and is affected by fixed costs. Financial leverage is the relationship between operating profit and earnings per share. The document provides examples and formulas for calculating operating and combined leverage.
This document provides an analysis of business operations for a processing plant. It demonstrates analyzing financial performance using a common-sized income statement and horizontal analysis. It also examines market analysis using fuel oil and gasoline margins, internal operational performance using on-stream factor and reasons for shutdowns, commercial performance using sales against plan and market, and production, sales, and inventory levels over time. The analysis is intended to serve as a basis for management discussions and aim for continuous improvement.
- The company reported third quarter 2015 results with record production of 16.6 MBoe/d, up 17% year-over-year.
- Operating costs continued to decrease, with lease operating expenses of $5.04/Boe, a 14% reduction from the prior year.
- The company drilled 4 wells and completed 5 wells in the Wolfcamp B-C zones, with initial production averaging 931 Boe/d.
Operations performance analysis that facilitates an informed decision making ...Bojan Mitrovic, M.A.
I have created the following presentation to demonstrate the contribution of comprehensive analysis and reporting to business performance improvements.
Please contact me if you have any questions. If you are a manager I`d be happy to discuss how analysis and reporting can aid the decision-making process at you organization and lead to continuous operational improvements.
Hillenbrand provides a Q3 2017 earnings presentation covering their financial performance and outlook. Some key points:
- Revenue increased 7% to $396 million driven by strong demand for plastics projects and hydraulic fracturing equipment.
- Net income grew 7% to $33 million and adjusted EBITDA increased 8% to $72 million.
- Process Equipment Group revenue rose 12% while Batesville declined 2% due to higher rates of cremation.
- The company reaffirmed its full year 2017 guidance for 1-3% total revenue growth and adjusted EPS of $2.00-$2.10.
Similar to Ch. 16 Assignment ALLAnalysis of Oil and Gas Companies Financial .docx (20)
For this assignment, review the articleAbomhara, M., & Koie.docxsleeperharwell
For this assignment, review the article:
Abomhara, M., & Koien, G.M. (2015). Cyber security and the internet of things: Vulnerabilities, threats, intruders, and attacks.
Journal of Cyber Security, 4
, 65-88. Doi: 10.13052/jcsm2245-1439.414
and evaluate it in 3 pages (800 words), in APA format with in-text citation using your own words, by addressing the following:
What did the authors investigate, and in general how did they do so?
Identify the hypothesis or question being tested
Summarize the overall article.
Identify the conclusions of the authors
Indicate whether or not you think the data support their conclusions/hypothesis
Consider alternative explanations for the results
Provide any additional comments pertaining to other approaches to testing their hypothesis (logical follow-up studies to build on, confirm or refute the conclusions)
The relevance or importance of the study
The appropriateness of the experimental design
When you write your evaluation, be brief and concise, this is not meant to be an essay but an objective evaluation that one can read very easily and quickly. Also, you should include a complete reference (title, authors, journal, issue, pages) you turn in your evaluation. This is good practice for your literature review, which you’ll be completing during the dissertation process.
.
For this assignment, provide your perspective about Privacy versus N.docxsleeperharwell
For this assignment, provide your perspective about Privacy versus National Security
. This is a particularly "hot topic" because of recent actions by the federal government taken against Apple. So, please use information from reliable sources to support your perspective.
This assignment should be 1.5 pages in length, using Times New Roman font (size 12), double spaced on a Word documen
.
For this assignment, provide your perspective about Privacy vers.docxsleeperharwell
For this assignment, provide your perspective about Privacy versus National Security
. This is a particularly "hot topic" because of recent actions by the federal government taken against Apple. So, please use information from reliable sources to support your perspective.
This assignment should be 1.5 pages in length, using Times New Roman font (size 12), double spaced on a Word document.
.
For this Assignment, read the case study for Claudia and find two to.docxsleeperharwell
For this Assignment, read the case study for Claudia and find two to three scholarly articles on social issues surrounding immigrant families.
In a 2- to 4-page paper, explain how the literature informs you about Claudia and her family when assessing her situation.
Describe two social issues related to the course-specific case study for Claudia that inform a culturally competent social worker.
Describe culturally competent strategies you might use to assess the needs of children.
Describe the types of data you would collect from Claudia and her family in order to best serve them.
Identify other resources that may offer you further information about Claudia’s case.
Create an eco-map to represent Claudia’s situation. Describe how the ecological perspective of assessment influenced how the social worker interacted with Claudia.
Describe how the social worker in the case used a strengths perspective and multiple tools in her assessment of Claudia. Explain how those factors contributed to the therapeutic relationship with Claudia and her family.
.
For this assignment, please start by doing research regarding the se.docxsleeperharwell
For this assignment, please start by doing research regarding the severity of prejudicial aggression/violence from the past. After you do this, research the severity of prejudicial aggression/violence that has gone on in the past decade. Target the same specific groups that have been the aggressor and victim in both your historical group and your present-day group. For instance, if you choose "black vs. white" in the 1950s, you must use the same group for your present-day group. Once you do this, discuss various ways that it is the same, as well as why it is different between the time periods. What influences have changed? Why is it better now, or worse now than in the past? Please discuss how the advancements in media (news, entertainment, and social media) have had on this issue, along with whatever you come up with outside of media influence. Make sure you back your information up with citations from your sources.
.
For this assignment, please discuss the following questionsWh.docxsleeperharwell
For this assignment, please discuss the following questions?
What was the name of the first computer network?
Who created this network
When did this network got established?
Explain one of the major disadvantages of this network at its initial stage
What is TCP?
Who created TCP?
What is IP?
When did it got implemented
How did the implementation of TCP/IP revolutionize communication technology?
Requirements:
You must write a minimum of two paragraphs, with two different citations, and every paragraph should have at least four complete sentences for each question. Every question should have a subtitle (Bold and Centered). You must also respond to at least two of your classmates’ posts with at least 100 words each before the due date. You need to use the discussion board header provided in the getting started folder. Please proofread your work before posting your assignment.
.
For this assignment, locate a news article about an organization.docxsleeperharwell
For this assignment, locate a news article about an organization who experienced an ethical issue related to communication. In 1,200 to 1,550 words, complete the following:
Discuss the circumstances of the incident, the organization’s decision making process, and the public and media reaction to the organization’s decision.
Presume you have been hired by that organization to help strengthen their communication efforts. Outline at least
four strategies
you would recommend the organization follow in the future to enhance the ethics of their communication.
.
For this assignment, it requires you Identifies the historic conte.docxsleeperharwell
For this assignment, it requires you Identifies the historic context of ideas and cultural traditions outside the U.S., and how they have influenced American culture.
Topic for this paper:
The history of ramen (technically started in China, moved and developed in Japan) now a pop culture cuisine in the U.S.
The paper should be in APA format and two full pages with double-spaced. Also, since you are researching and writing about new information, be sure cite your source (website name, address, date you visited it) at the end of the two pages, so I know where you got your information.
.
For this assignment, create a framework from which an international .docxsleeperharwell
For this assignment, create a framework from which an international human resource management function can address cultural challenges. Within your framework, devise a model that includes due diligence steps, merger steps, and post-merger steps that specifically address cultural acclimation and environmental acclimation, as well as bringing two workforces together.
Supported by a minimum of two academic sources.
.
For this assignment, create a 15-20 slide digital presentation in tw.docxsleeperharwell
For this assignment, create a 15-20 slide digital presentation in two parts to educate your colleagues about meeting the needs of specific ELLs and making connections between school and family.
Part 1
In the first part of your presentation, provide your colleagues with useful information about unique factors that affect language acquisition among LTELs, RAELs, and SIFEs.
This part of the presentation should include:
A description of the characteristics of LTELs, RAELs, and SIFEs
An explanation of the cultural, sociocultural, psychological, or political factors that affect the language acquisition of LTELs, RAELs, and SIFEs
A discussion of factors that affect the language acquisition of refugee, migrant, immigrant and Native American ELLs and how each of these ELLs may relate to LTELs, RAEL, or SIFEs
A discussion of additional factors that affect the language acquisition of grades K-12 LTELs, RAEL, and SIFEs
Part 2
In the second part of the presentation, recommend culturally inclusive practices within curriculum and instruction. Provide useful resources that would empower the family members of ELLs.
This part of the presentation should include:
Examples of curriculum and materials, including technology, that promote a culturally inclusive classroom environment.
Examples of strategies that support culturally inclusive practices.
A brief description of how home and school partnerships facilitate learning.
At least two resources for families of ELLs that would empower them to become partners in their child’s academic achievement.
Presenter’s notes, title, and reference slides that contain 3-5 scholarly resources.
.
For this assignment, you are to complete aclinical case - narrat.docxsleeperharwell
For this assignment, you are to complete a
clinical case - narrated PowerPoint report
that will follow the SOAP note example provided below. The case report will be based on the clinical case scenario list below.
You are to approach this clinical scenario as if it is a real patient in the clinical setting.
Instructions:
Step 1
- Read the assigned clinical scenario and using your clinical reasoning skills, decide on the diagnoses. This step informs your next steps.
Step 2
- Document the given information in the case scenario under the appropriate sections, headings, and subheadings of the SOAP note.
Step 3
- Document all the classic symptoms typically associated with the diagnoses in Step 1. This information may NOT be given in the scenario; you are to obtain this information from your textbooks. Include APA citations.
Example of Steps 1 - 3:
You decided on Angina after reading the clinical case scenario (Step 1)
Review of Symptoms (list of classic symptoms):
CV: sweating, squeezing, pressure, heaviness, tightening, burning across the chest starting behind the breastbone
GI: indigestion, heartburn, nausea, cramping
Pain: pain to the neck, jaw, arms, shoulders, throat, back, and teeth
Resp: shortness of breath
Musculo: weakness
Step 4
– Document the abnormal physical exam findings typically associated with the acute and chronic diagnoses decided on in Step 1. Again, this information may NOT be given. Cull this information from the textbooks. Include APA citations.
Example of Step 4:
You determined the patient has Angina in Step 1
Physical Examination (list of classic exam findings):
CV: RRR, murmur grade 1/4
Resp: diminished breath sounds left lower lobe
Step 5
- Document the diagnoses in the appropriate sections, including the ICD-10 codes, from Step 1. Include three differential diagnoses. Define each diagnosis and support each differential diagnosis with pertinent positives and negatives and what makes these choices plausible. This information may come from your textbooks. Remember to cite using APA.
Step 6
- Develop a treatment plan for the diagnoses.
Only
use National Clinical Guidelines to develop your treatment plans. This information will not come from your textbooks. Use your research skills to locate appropriate guidelines. The treatment plan
must
address the following:
a) Medications (include the dosage in mg/kg, frequency, route, and the number of days)
b) Laboratory tests ordered (include why ordered and what the results of the test may indicate)
c) Diagnostic tests ordered (include why ordered and what the results of the test may indicate)
d) Vaccines administered this visit & vaccine administration forms given,
e) Non-pharmacological treatments
f) Patient/Family education including preventive care
g) Anticipatory guidance for the visit (be sure to include exactly what you discussed during the visit; review Bright Futures website for this section)
h) Follow-up appointment with a.
For this assignment, you are to complete aclinical case - narr.docxsleeperharwell
For this assignment, you are to complete a
clinical case - narrated PowerPoint report
that will follow the SOAP note example provided below. The case report will be based on the clinical case scenario list below.
You are to approach this clinical scenario as if it is a real patient in the clinical setting.
Instructions:
Step 1
- Read the assigned clinical scenario and using your clinical reasoning skills, decide on the diagnoses. This step informs your next steps.
Step 2
- Document the given information in the case scenario under the appropriate sections, headings, and subheadings of the SOAP note.
Step 3
- Document all the classic symptoms typically associated with the diagnoses in Step 1. This information may NOT be given in the scenario; you are to obtain this information from your textbooks. Include APA citations.
Example of Steps 1 - 3:
You decided on Angina after reading the clinical case scenario (Step 1)
Review of Symptoms (list of classic symptoms):
CV: sweating, squeezing, pressure, heaviness, tightening, burning across the chest starting behind the breastbone
GI: indigestion, heartburn, nausea, cramping
Pain: pain to the neck, jaw, arms, shoulders, throat, back, and teeth
Resp: shortness of breath
Musculo: weakness
Step 4
– Document the abnormal physical exam findings typically associated with the acute and chronic diagnoses decided on in Step 1. Again, this information may NOT be given. Cull this information from the textbooks. Include APA citations.
Example of Step 4:
You determined the patient has Angina in Step 1
Physical Examination (list of classic exam findings):
CV: RRR, murmur grade 1/4
Resp: diminished breath sounds left lower lobe
Step 5
- Document the diagnoses in the appropriate sections, including the ICD-10 codes, from Step 1. Include three differential diagnoses. Define each diagnosis and support each differential diagnosis with pertinent positives and negatives and what makes these choices plausible. This information may come from your textbooks. Remember to cite using APA.
Step 6
- Develop a treatment plan for the diagnoses.
Only
use National Clinical Guidelines to develop your treatment plans. This information will not come from your textbooks. Use your research skills to locate appropriate guidelines. The treatment plan
must
address the following:
a) Medications (include the dosage in mg/kg, frequency, route, and the number of days)
b) Laboratory tests ordered (include why ordered and what the results of the test may indicate)
c) Diagnostic tests ordered (include why ordered and what the results of the test may indicate)
d) Vaccines administered this visit & vaccine administration forms given,
e) Non-pharmacological treatments
f) Patient/Family education including preventive care
g) Anticipatory guidance for the visit (be sure to include exactly what you discussed during the visit; review Bright Futures website for this section)
h) Follow-up appointment wit.
For this assignment, you are provided with four video case studies (.docxsleeperharwell
For this assignment, you are provided with four video case studies (linked in the Resources). Review the cases of Julio and Kimi, and choose either Reese or Daneer for the third case. Review these two videos: •The Case of Julio: Julio is a 36-year-old single gay male. He is of Cuban descent. He was born and raised in Florida by his parents with his two sisters. He attended community college but did not follow through with his plan to obtain a four-year degree, because his poor test taking skills created barriers. He currently works for a sales promotion company, where he is tasked with creating ads for local businesses. He enjoys the more social aspects of his job, but tracking the details is challenging and has caused him to lose jobs in the past. He has been dating his partner, Justin, for five years. Justin feels it is time for them to commit and build a future. Justin is frustrated that Julio refuses to plan the wedding and tends to blame Julio’s family. While Julio’s parents hold some traditional religious values, they would welcome Justin into the family but are respectfully waiting for Julio to make his plans known. Justin is as overwhelmed by the details at home as he is at work. •The Case of Kimi: Kimi is a 48-year-old female currently separated from her husband, Robert, of 16 years. They have no children, which was consistent with Kimi’s desire to focus on her career as a sales manager. She told Robert a pregnancy would wreck her efforts to maintain her body. His desire to have a family was a goal he decided he needed to pursue with someone else. He left Kimi six months ago for a much younger woman and filed for divorce. Kimi began having issues with food during high school when she was on the dance team and felt self-conscious wearing the form-fitting uniform. During college, she sought treatment because her roommate became alarmed by her issues around eating. She never told her parents about this and felt it was behind her. Her parents are Danish and value privacy. They always expected Kimi to be independent. Her lack of communication about her private life did not concern them. They are troubled by Robert’s behavior and consider his conspicuous infidelity as a poor reflection upon their family. Kimi has moved in with her parents while she and Robert are selling the house, which has upended the balance in their relationship. For a third case, choose one of these videos: •The Case of Reese: -Reese is a 44-year-old married African American female. Her parents live in another state, and she is their only child. Her father is a retired Marine Lieutenant Colonel who was stationed both in the United States and overseas while Reese was growing up. She entered the Air Force as soon as she graduated high school at age 17 and has achieved the rank of Chief Master Sergeant. She has been married 15 years to John, and they recently discovered she is pregnant. The unexpected pregnancy has been quite disorienting for someone who has planned.
For this assignment, you are going to tell a story, but not just.docxsleeperharwell
For this assignment, you are going to tell a story, but not just any story. It will be a First Nations story, and it will be your version of it.
Choose one of the two stories at the end of this unit, either "Why the Flint-Rock Cannot Fight Back"
You can write of yourself telling one of the stories.
In telling your story, here is what you will need to consider:
Clarity of speech
Intonation
Pacing and pauses
You will also have to work out how to make this telling of the story yours. You might want to read it aloud with point form notes for a prompt or to memorize it. Perhaps you want to rewrite it so that it sounds more like your words. Maybe you will change names and place-names to those you are familiar with. If you are making a video or performing this live, you should practice facial and hand gestures as well as stance and body language. The purpose of all of this is to bring your own meaning to the story.
HERE IS THE STORY
Why the Flint-Rock Cannot Fight Back
Sto-Way’-Na—Flint—was rich and powerful. His lodge was toward the sunrise. It was guarded by Squr-hein— Crane. He was the watcher. He watched from the top of a lone tree. When anybody approached, Crane would call out and warn Flint, and Flint would come out of his lodge and meet the visitor.
There was an open flat in front of the lodge. Flint met all his visitors there. Warriors and hunters came and bought flint for arrow-points and spear-heads. They paid Flint big prices for the privilege of chipping off the hard stone. Some who needed flint for their weapons were poor and could not buy. These poor persons Flint turned away.
Coyote heard about Flint and, as he wanted some arrow-points, he asked his squas-tenk’ to help him. Squas-tenk’ refused.
“Hurry, do what I ask, or I will throw you away and let the rain wash you— wash you cold,” said Coyote, and then the power gave him three rocks that were harder than the flint-rock. It also gave him a little dog that had only one ear. But this ear was sharp, like a knife; it was a knife- ear.
Then to his wife, Mole, Coyote said: “Go and make your underground trails in the flat where Sto-way’-na lives. When you have finished and see me talking with him, show yourself so we can see you.”
Then Coyote set out for Flint’s lodge. As he got near it, he had his power make a fog to cover the land, and thick fog spread over everything. Crane, the watcher, up in the lone tree, could not see Coyote. He did not know that Coyote was around.
Coyote climbed the tree and took Crane from his high perch and broke his neck. Crane had no time to cry out. Then Coyote went on to Flint’s lodge. He was almost there when Flint’s dog, Grizzly Bear, jumped out of the lodge and ran toward him.
Coyote was not scared, and he yelled at Flint: “Stop your grizzly bear dog! Stop him, or my dog will kill him.”
That amused Flint, who was looking through the doorway. He saw that Coyote’s one-eared dog was very small, hardly a mouthful for Grizzly Bear. Fli.
For this assignment, you are asked to prepare a Reflection Paper. Af.docxsleeperharwell
For this assignment, you are asked to prepare a Reflection Paper. After you finish the reading assignment, reflect on the concepts and write about it. What do you understand completely? What did not quite make sense? The purpose of this assignment is to provide you with the opportunity to reflect on the material you finished reading and to expand upon those thoughts
A Reflection Paper is an opportunity for you to express your thoughts about the material by writing about them.
The writing you submit must meet the following requirements:
be at least two pages;
include your thoughts about the main topics
APA Stlye
.
For this assignment, you are asked to prepare a Reflection Paper. .docxsleeperharwell
For this assignment, you are asked to prepare a Reflection Paper. After you finish the reading assignment, reflect on the concepts and write about it. What do you understand completely? What did not quite make sense? The purpose of this assignment is to provide you with the opportunity to reflect on the material you finished reading and to expand upon those thoughts. If you are unclear about a concept, either read it again, or ask your professor. Can you apply the concepts toward your career? How?
This is not a summary. A Reflection Paper is an opportunity for you to express your thoughts about the material by writing about them.
The writing you submit must meet the following requirements:
be at least two pages;
include your thoughts about the main topics; and
include financial performance, quality performance, and personnel performance.
Format the Reflection Paper in your own words using APA style, and include citations and references as needed to avoid instances of plagiarism.
The reading assignment that you are to reflect on is Chapter 11, in the text. My written lecture for this Unit is basically a reflection on Chapter 11. Find an interesting part or two of the chapter and tell me what you got out of it. It's not a hard assignment. If you read my lecture, you will see the part of Chapter 11 that intrigued me the most was the subject of codetermination on page 367. Anything that intrigues you in Chapter 11 is fine with me.
Written Lecture
Does the ringisei decision-making process by consensus, which is used by the Japanese, reach the same conclusion as the top-down methods, which are used by American management? Some might label the Japanese decision-making system as simply procrastination. Others appreciate the method and expect productive outcomes. One major challenge is to build an organizational culture to adopt the practice of ringisei. If only half of an organization uses ringisei, it is likely to cause miscommunication and result in frustration.
The ringisei is based on the theory that the employee is an important part of the overall success of an enterprise. It is common to hear a lot about
empowering the employees
. Is creativity and innovation rewarded, ignored, or punished for the lower level employee in America?
Could the Japanese system of decision making have led to the controversy of what Toyota knew about unintended acceleration problems? This may be the best example of the use of silence in the Japanese culture frustrating Americans as a nation. This is not an explicit accusation of Toyota or of Japanese culture. Rather, it is inserted here to demonstrate potential consequences of management methods, processes, systems, and decision making. Read pages 106-108 of Luthans and Doh (2012) concerning this topic. The cause of the unintended acceleration problem announced by the United States government was due to bad floor mats or driver error. Initially, electronic problems were not mentioned.
The March 2011 Fuku.
For this assignment, you are asked to conduct some Internet research.docxsleeperharwell
This document instructs students to research a malware, virus, or DOS attack by summarizing findings from an internet source in 3-4 paragraphs. The summary should include the name of the malware/virus, date of incident, impact/damage caused, how it was detected, and a reference citation.
For this assignment, you are a professor teaching a graduate-level p.docxsleeperharwell
For this assignment, you are a professor teaching a graduate-level public administration administrative law course at a traditional state university. Your task is to develop a formal presentation providing an overview of administrative law—specifically by comparing and contrasting the key defining aspects of administrative law within the American three-branch federal government structure, explaining how these functions are overseen/regulated, and ultimately, interpreting how they serve the common good of the public-at-large.
Your presentation must include the following with specific examples:
Articulate an understanding of how federal agencies enforce their regulations.
Explain the fundamental role that agency rulemaking plays in regulating society-at-large.
Compare both formal rulemaking and informal rulemaking.
Articulate the similarities and differences between rulemaking and adjudication.
Analyze the various methods of oversight exercised by the judicial, legislative, and executive branches of the federal government over administrative agencies.
Articulate how special interest groups (to include the media) can influence and/or shape public opinion about administrative agencies and place a spotlight on individual policies.
Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and should cite material appropriately. Add audio to each slide using the
Media
section of the
Insert
tab in the top menu bar for each slide.
Support your presentation with at least seven scholarly resources
.
In addition to these specified resources, other appropriate scholarly resources may be included.
Length: 15 slides (with a separate reference slide)
Notes Length: 200-350 words for
each slide
Be sure to include citations for quotations and paraphrases with references in APA format and style where appropriate.
.
For this assignment, we will be visiting the PBS website,Race .docxsleeperharwell
For this assignment, we will be visiting the PBS website,
Race: The Power of Illusion
. Click on the "Learn More" link, and proceed to visit these links:
What is Race? (View All)
Sorting People (Complete both "Begin Sorting" and "Explore Traits")
Race Timeline (View All)
Human Diversity (Complete both the Quiz and "Explore Diversity")
Me, My Race & I (View Slideshow Menu)
Where Race Lives (View All)
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Ch. 16 Assignment ALLAnalysis of Oil and Gas Companies Financial .docx
1. Ch. 16 Assignment ALLAnalysis of Oil and Gas Companies'
Financial Statements- Homework#17What is the reserve
replacement ratio? What is the reserve replacement ratio
attempting to measure? How would you interpret it?The reserve
replacement ratio measures a company's success in replacing
production and accordingly measures a company's ability to
continue to operate in the future. It is used to measure the
performance of a company. The most basic form
formula:Reserve replacement ratio=Extensions and discoveries
+ Improved recoveryRevisions in previous estimates +
Purchases of reserves in placeProduction#13The following
reserve table appeared in the financial statements of Lomax
Company.Estimated Quantities of Net Proved Crude Oil and
Natural Gas(Worldwide Totals only)in Thousands of Barrels
and Millions of Cubic FeetYear ended Dec.
31201520162017OilGasOilGasOil GasBeginning of
year171779234783335724Revisions of prevision
estimates10121531(11)22Improved
recovery213025231550Purchases of reserves in
place001212024Sales of reserves in
place(12)(12)(20)(99)(70)(24)Extension &
discoveries697890426150Production(25)(104)(21)(68)(24)(76)E
nd of year totals234783335724251870YearNet WellsGross
Wells201575020102016840191020179002050i.Reserve
replacement ratio=Extensions and discoveries + Improved
recoveryProductionExtensions and discoveries + Improved
recovery+ Revisions in previous estimatesii.Reserve
replacement ratio=ProductionExtensions and discoveries +
Improved recovery + Revisions in previous estimates +
Purchase of reserves in placeiii.Reserve replacement
ratio=Production + Sales of reserves in placeREQUIRED:
Compute the following ratios for all three years:a.The reserves
replacement ratio computed for all three methods and for oil
and gas
2. separately2015OilGasi.=3.6001.038ii.=4.0001.154iii.=2.7031.03
42016OilGasi.=5.4760.956ii.=6.1901.412iii.=3.4630.6472017Oi
lGasi.=0.8752.632ii.=0.4172.921iii.=0.1062.460b.The reserve
life ratio computed for oil and gas separatelyReserve life ratio
=Total proved reserves at beg. of
year2015OilGasProduction6.847.4902016OilGas11.14311.51520
17OilGas13.9589.526c.The net wells to gross wells ratioNet to
gross wells =Net wells2015Gross
wells0.373134328420160.44020170.439d.The average reserves
per well ratio computed using BOE, i.e., combining reserves
based on relative energy contentAverage reserves per well
ratio=Total proved reseves @ beg2015Net
wells0.401BOE/well20160.434BOE/well20170.506BOE/welle.T
he average daily production per well computed using
BOEAverage daily production per well=Annual
production/3652015Net
wells0.155bbl/day/well20160.105bbl/day/well20170.112bbl/day
/well#15Lomax Company reported the following expenses in its
financial statements (in thousands):YearLifting
CostsDD&A2015$211$50020162264502017183525REQUIRED:
Using the reserve disclosure for Lomax Company given in
problem 13 and the data presented in this problem:a.Compute
lifting costs per BOELifting cost/BOE=Total annual lifting
costs2015$ 4.984/BOEAnnual production (BOE)2016$
6.990/BOE2017$ 4.991/BOEb.Compute DD&A per
BOEDD&A/BOE=Total annual DD&A2015$
11.811/BOEAnnual production (BOE)2016$ 13.918/BOE2017$
14.318/BOE
Sheet1vi. Energy Specific Ratios17. Reserves Replacement
RatiosReserve additions / reserve extractions18. Reserve Life
RatioTotal proved reserves beg yr / production19. Net to Gross
Well RatioNet wells / gross wells20. Average Reserves per Well
RatioTotal proved reserves beg yr / net wells21. Average Daily
Production per Well RatioAnnual production / 365 / net
wells22. Finding Cost per BOE RatioG&G costs + exploratory
3. drilling costs / new BOE added23. DD&A per BOE RatioTotal
annual DD&A / total annual BOE production24. Value of
Proved Reserve Additions per BOE RatioValue changes in
extensions, discoveries, and improved recovery / Total
extinsions discoveries, improved recovery
Running head: BHP BILLITON
ACCT 6300 – Oil and Gas Accounting
Semester Year
Dr. Wei-Chih Chiang
Group Project
BHP Billiton
By: Group X:
Student 1
4. Student 2
Student 3
Student 4
BHP BILLITON Group X
2
EXECUTIVE SUMMARY
BHP Billiton is one of the world’s largest producers of major
commodities with substantial
interests in oil and gas. The company is based in Australia but
has an international consumer
base.
5. This report looks at the financial history and current financial
position of BHP Billiton,
constructs an analysis, and then makes recommendations as to
what the company can do to
improve its financial performance.
The financial data presented includes the horizontal and vertical
common sized balance
sheets and income statements for the last three fiscal years
(2010 through 2012), as well as an
analysis of this data. Financial ratios are then calculated for
BHP Billiton, as well as energy-
specific ratios. An analysis is made from this data to evaluate
the current and historical
financial health of the company. Recommendations are made to
improve BHP’s financial
performance, based on the financial data. The main
recommendations are that BHP raise its
cash and cash equivalents and decrease its operating costs. BHP
has shown steady growth
over the last three years and the replacements of reserves have
been greater than production.
However, some financial indicators show that the company is
becoming less efficient and
cutting DD&A costs could help to improve the company’s
7. 2.5 Profitability Ratios
...............................................................................................
.......... 12
2.6 Financial Strength Ratios
...............................................................................................
13
2.7 Dividend Ratios
...............................................................................................
............... 14
2.8 Valuation Ratios
...............................................................................................
.............. 15
3.0 Reserve Ratios
...............................................................................................
............................... 16
3.1 Reserve Replacement Ratios
.......................................................................................... 16
3.2 Reserve Life Ratios
...............................................................................................
......... 16
3.3 Net Wells to Gross Wells Ratio
..................................................................................... 16
3.4 Average Reserves per Wells Ratio
................................................................................. 17
4.0 Reserve Cost Ratios
...............................................................................................
...................... 17
8. 4.1 Finding Cost Ratios
...............................................................................................
......... 17
4.2 Lifting costs per BOE & DD&A per BOE
..................................................................... 18
5.0 Reserve Value Ratios
...............................................................................................
.................... 18
5.1 Value of Proved Reserve Additions per BOE
................................................................ 18
5.2 Value Added Ratio
...............................................................................................
.......... 19
6.0 CONCLUSIONS AND RECOMMENDATIONS
.................................................................. 19
7.0 REFERENCES
...............................................................................................
.............................. 20
8.0 APPENDIX
...............................................................................................
.................................... 20
8.1 Income Statements for Fiscal Years 2010-2012 for BHP
Billiton ................................. 20
8.2 Balance Sheets for Fiscal Years 2010-2012 for BHP Billiton
....................................... 21
9. BHP BILLITON Group X
4
1.0 INTRODUCTION
BHP Billiton Group, headquartered in Melbourne, Australia, is
a leading global resources
company that values sustainability, integrity, respect,
performance, simplicity, and
accountability. The company specializes in discovery,
acquisition, development, and marketing
of natural resources. BHP Billiton Limited is primarily listed
on the Australian Securities
Exchange and London Stock Exchange and secondarily listed on
the Johannesburg Stock
Exchange. They are also listed on the New York Stock
Exchange. As of June 30, 2012, BHP
Billiton Group reported $72,226M of revenue and EBIT of
$27,238M, a total of 310 and 139
gross and net wells respectively, as well as 363.2 million of
barrels and developed petroleum
10. reserves. At a quick glance, the company is very financially
stable with good future growth.
This report will analyze the financial statements for BHP
Billiton over a period of three
years, from 2010 through 2012; including horizontal and
vertical balance sheet and income
statement analyses, financial ratios, and energy specific ratios.
Along with the computation of the
ratios, this report will also provide recommendations on ways to
improve BHP’s financial
position.
2.0 NUMERICAL ANALYSIS – FINANCIAL STATEMENTS
AND RATIOS
This section will look at the financial statements and ratios for
BHP Billiton. The vertical and
horizontal common-size balance sheets and income statements
will be presented for fiscal years
2010 through 2012. Financial ratios and energy-specific ratios
are also calculated for the last
three years, and these will be used as a measure of each
company’s performance in the analysis.
The financial statement information in this section has been
compiled from BHP’s company
11. report for each applicable year.
2.1 Vertical Common-Size Analysis
The vertical common-size income statement and balance sheet
analysis compares each
line item on a single year’s financial statement as a percentage
of one line item; the base
amount. The base amount that we will use in the vertical
common size analysis of BHP
Billiton is total assets for the balance sheets, and total revenues
for the income statements.
By comparing three years of BHP Billiton’s financial
statements, 2010 through 2012, we are
able to analyze the changes in the mixture of assets, liabilities
and equity, and identify
changes in the mix of revenues and in the spending for different
types of expenses.
i) Vertical Common-Size Balance Sheets for Fiscal 2010 – 2012
Below are the common size balance sheets for the fiscal year
ending December 31st from
2010 through 2012. The values shown are as a percentage of
total assets for that year. The
last column shows the average percentage over the three-year
12. period.
BHP BILLITON Group X
5
VERTICAL COMMON-SIZE ANALYSIS
BHP BILLITON GROUP -
BALANCE SHEET
2012 2011 2010
3-Yr
Average
ASSETS
Current assets
Cash and cash equivalents 3.70% 9.80% 14.02% 9.17%
Trade and other receivables 5.96% 7.96% 7.36% 7.10%
Other financial assets 0.22% 0.26% 0.33% 0.27%
Inventories 4.82% 5.98% 6.00% 5.60%
13. Assets held for sale 0.66% 0.00% 0.00% 0.22%
Current tax assets 0.11% 0.27% 0.21% 0.19%
Other 0.36% 0.30% 0.36% 0.34%
Total current assets 15.82% 24.56% 28.29% 22.89%
Non-current assets 0.00% 0.00% 0.00% 0.00%
Trade and other receivables 1.14% 2.03% 1.55% 1.58%
Other financial assets 1.46% 1.56% 1.70% 1.57%
Inventories 0.33% 0.35% 0.39% 0.36%
Property, plant and equipment 73.68% 66.02% 62.55% 67.42%
Intangible assets 3.95% 1.41% 0.77% 2.05%
Deferred tax assets 3.50% 3.88% 4.56% 3.98%
Other 0.12% 0.18% 0.19% 0.16%
Total non-current assets 84.18% 75.44% 71.71% 77.11%
Total assets 100.00% 100.00% 100.00% 100.00%
LIABILITIES
Current liabilities
Trade and other payables 9.30% 9.45% 7.28% 8.68%
Interest bearing liabilities 2.73% 3.42% 2.47% 2.87%
14. Liabilities held for sale 0.33% 0.00% 0.00% 0.11%
Other financial liabilities 0.15% 0.28% 0.58% 0.34%
Current tax payable 2.17% 3.59% 1.90% 2.55%
Provisions 2.15% 2.19% 2.14% 2.16%
Deferred income 0.19% 0.25% 0.33% 0.26%
Total current liabilities 17.04% 19.18% 14.68% 16.97%
Non-current liabilities
Trade and other payables 0.39% 0.54% 0.53% 0.49%
Interest bearing liabilities 19.18% 12.04% 15.28% 15.50%
Other financial liabilities 0.25% 0.08% 0.30% 0.21%
Deferred tax liabilities 4.09% 2.61% 4.86% 3.85%
Provisions 6.90% 9.03% 8.37% 8.10%
Deferred income 0.25% 0.42% 0.47% 0.38%
BHP BILLITON Group X
6
Total non-current liabilities 31.06% 24.71% 29.80% 28.52%
15. Total liabilities 48.11% 43.88% 44.48% 45.49%
Net assets 51.89% 56.12% 55.52% 54.51%
EQUITY
Share capital – BHP Billiton Limited 0.92% 1.15% 1.38%
1.15%
Share capital – BHP Billiton Plc 0.83% 1.04% 1.26% 1.04%
Treasury shares -0.41% -0.61% -0.59% -0.54%
Reserves 1.48% 1.94% 2.15% 1.86%
Retained earnings 48.14% 51.62% 50.42% 50.06%
Total equity attributable to members
of BHP Billiton Group
50.95% 55.15% 54.61% 53.57%
Non-controlling interests 0.94% 0.96% 0.90% 0.94%
Total equity 51.89% 56.12% 55.52% 54.51%
ii) Vertical Common-Size Income Statements for Fiscal 2010 –
2012
Below are the common size income statements for the year
ending December 31
st
from 2010 to 2012. The values are shown as a percentage of the
16. total revenues for that
year. The last column shows the average percentage for the
three-year period.
VERTICAL COMMON-SIZE
ANALYSIS
BHP BILLITON GROUP -
INCOME STATEMENT
2012 2011 2010 3-Yr Average
Revenue
Group production 95.18% 94.65% 91.28% 93.70%
Third party products 4.82% 5.35% 8.72% 6.30%
100.00% 100.00% 100.00% 100.00%
Other income 1.25% 0.74% 1.00% 1.00%
Expenses excluding net finance
costs
-68.37% -56.39% -63.06% -62.61%
Profit from operations 32.89% 44.35% 37.94% 38.39%
Comprising: 0.00% 0.00% 0.00% 0.00%
Group production 32.71% 44.21% 37.73% 38.22%
17. Third party products 0.17% 0.14% 0.21% 0.17%
32.89% 44.35% 37.94% 38.39%
Financial income 0.31% 0.34% 0.41% 0.35%
Financial expenses -1.32% -1.12% -1.28% -1.24%
Net finance costs -1.01% -0.78% -0.87% -0.89%
Profit before taxation 31.87% 43.57% 37.07% 37.50%
Income tax expense -10.02% -9.03% -11.58% -10.21%
Royalty-related taxation (net of
income tax benefit)
-0.35% -1.15% -0.85% -0.79%
BHP BILLITON Group X
7
Total taxation expense -10.37% -10.19% -12.43% -11.00%
Profit after taxation 21.50% 33.38% 24.64% 26.51%
Attributable to non-controlling
interests
0.16% 0.42% 0.54% 0.37%
18. Attributable to members of BHP
Billiton Group
21.35% 32.96% 24.10% 26.14%
Earnings per ordinary share (basic)
(US cents)
0.40% 0.60% 0.43% 0.48%
Earnings per ordinary share (diluted)
(US cents)
0.40% 0.60% 0.43% 0.48%
Dividends per ordinary share – paid
during the period (US cents)
0.15% 0.13% 0.16% 0.15%
Dividends per ordinary share –
declared in respect of the period
(US cents)
0.16% 0.14% 0.16% 0.15%
For BHP Billiton, it can be seen from the common size balance
sheets for fiscal 2010 to
fiscal 2012 that cash and cash equivalents have steadily
decreased, from 14.02% to 3.70% total
assets over the three year period. Inventories have decreased
19. from 6.00% in 2010 to 4.82% in
2012, but looking at the common size income statement shows
that revenues have steadily
increased over the last three years, so the rate of inventory
turnover must be high.
Though total current assets have decreased over the three-year
period, total non-current assets
have increased, especially in PP&E (from 62.55% in 2010 to
73.68% in 2012), and this accounts
for the overall increase in total assets over the years. Total
liabilities decreased from 2010 to
2011, from 44.48% to 43.88%, but then increased to 48.11% in
2012. This increase in liabilities
explains why the company has less cash in their pockets. Total
equity increased in 2011 to
56.12% from 55.52% in 2010, and then decreased in 2012 to
51.89%. The biggest decrease in
equity was seen in the retained earnings.
The vertical common-size income statement shows that though
revenue from third party
products has decreased from 8.72% to 4.82%, revenue from
group production has increased from
91.28% to 95.18%. Since most of the revenue comes from group
production, this proves a
20. significant increase in revenue. That said, even though the
increased revenues from group
production outweigh the decreased revenue from third party
products and other income, the total
profit from operations from 2011 to 2012 decreased by 11.46%
due to the increase in revenue
expenses (excluding net finance costs). The profit after
taxations was only 21.50% as compared
to the three-year average of 26.51%.
BHP BILLITON Group X
8
2.2 Horizontal Common-Size Analysis
The horizontal common-size income statement and balance
sheet analysis compares all
amounts to the same figures of a base year. The analysis
measures each income statement
and balance sheet item as a percentage of the base year. This
makes it easier to compare the
21. income statements and balance sheets for different years and see
how the existing company is
trending over that period of time. In this analysis of BHP
Billiton Petroleum we will be using
2010 as the base year for all analysis.
i) Horizontal Common-Size Balance Sheets for Fiscal 2010 –
2012
Below are the horizontal common size balance sheets for the
fiscal year ending
December 31st from 2010 through 2012. The values shown are
as a percentage of values for
2010. The last column shows the average percentage over the
three-year period.
HORIZONTAL COMMON-SIZE ANALYSIS
BHP BILLITON GROUP - BALANCE SHEET
2012 2011 2010 3-Yr
Average
ASSETS
Current assets
Cash and cash equivalents 38.38% 80.96% 100.00% 73.11%
Trade and other receivables 117.74% 125.28% 100.00%
22. 114.34%
Other financial assets 96.58% 90.41% 100.00% 95.66%
Inventories 116.85% 115.37% 100.00% 110.74%
Assets held for sale
Current tax assets 72.49% 144.44% 100.00% 105.64%
Other 145.63% 96.25% 100.00% 113.96%
Total current assets 81.37% 100.58% 100.00% 93.98%
Non-current assets
Trade and other receivables 106.81% 151.56% 100.00%
119.45%
Other financial assets 124.57% 106.09% 100.00% 110.22%
Inventories 123.62% 105.83% 100.00% 109.82%
Property, plant and equipment 171.38% 122.26% 100.00%
131.21%
Intangible assets 744.10% 211.94% 100.00% 352.01%
Deferred tax assets 111.65% 98.52% 100.00% 103.39%
Other 94.05% 111.90% 100.00% 101.98%
Total non-current assets 170.79% 121.85% 100.00% 130.88%
Total assets 145.49% 115.83% 100.00% 120.44%
23. LIABILITIES
Current liabilities
Trade and other payables 185.93% 150.35% 100.00% 145.43%
Interest bearing liabilities 161.16% 160.61% 100.00% 140.59%
Liabilities held for sale
BHP BILLITON Group X
9
Other financial liabilities 39.14% 56.36% 100.00% 65.17%
Current tax payable 166.82% 219.17% 100.00% 162.00%
Provisions 146.60% 118.80% 100.00% 121.80%
Deferred income 86.85% 89.62% 100.00% 92.16%
Total current liabilities 168.95% 151.34% 100.00% 140.10%
Non-current liabilities
Trade and other payables 108.53% 118.34% 100.00% 108.96%
Interest bearing liabilities 182.71% 91.27% 100.00% 124.66%
Other financial liabilities 119.17% 29.70% 100.00% 82.96%
Deferred tax liabilities 122.38% 62.11% 100.00% 94.83%
24. Provisions 119.92% 125.02% 100.00% 114.98%
Deferred income 78.10% 102.14% 100.00% 93.41%
Total non-current liabilities 151.63% 96.02% 100.00% 115.88%
Total liabilities 157.35% 114.28% 100.00% 123.87%
Net assets 136.00% 117.08% 100.00% 117.69%
EQUITY
Share capital – BHP Billiton Limited 96.66% 96.41% 100.00%
97.69%
Share capital – BHP Billiton Plc 95.79% 95.88% 100.00%
97.22%
Treasury shares 101.52% 118.67% 100.00% 106.73%
Reserves 100.31% 104.98% 100.00% 101.77%
Retained earnings 138.92% 118.59% 100.00% 119.17%
Total equity attributable to members of BHP
Billiton Group 135.74% 116.97% 100.00% 117.57%
Non-controlling interests 151.12% 123.51% 100.00% 124.88%
Total equity 136.00% 117.08% 100.00% 117.69%
BHP Billiton Current Assets has overall decreased over the last
three years by 18.63%.
25. Their cash and cash equivalents was $12,456 million in 2010, in
2011 it was decreased by 20%
to $10,084 and was reduced by more than half in 2012 to only
$4,781 million. While there
inventories has increased by 16.85% over the same period.
Their trade and other receivables
have also increased to $6,233 million dollars or 16.83% over
the last three years.
BHP Billiton Non-Current Assets has increased by more than
70% over the last three
years. The most significant non-current asset class was their
Property, plant and equipment class
which has grown from $ 55,576 million in 2010 to $95,247
million in 2012 an impressive
71.38%. The intangible assets increased more than 7 times since
2010 where it was $687 million
to $5,112 million in 2012. With the continued growth of their
non-current assets has brought a
good total growth of 45.49% to their Assets.
The Total Liabilities for BHP Billiton has also grown overall
for the last three years to
$62,188 million in 2012 from $39,523 million in 2010 which is
a 57.35% increase in the total
26. liabilities. One of the largest growth liability types was the
Trade and other payables which have
grown from $6,467 million in 2010 to $12,024 million in 2012.
They also had an increase in
interest bearing liabilities, current tax liabilities. The Net assets
show a 36% growth from 2010
of $49,329 million to $67,085 million in 2012.
BHP BILLITON Group X
10
The Equity for BHP Billiton has also had a solid growth rate
over the last three years of
36% from $49,329 million in 2010 to an impressive $67,085
million in 2012. The share capital
for BHP Billiton Limited and BHP Billiton PLC has remained
constant along with treasury
shares and reserves. The largest growth on equity was the
retained earnings.
ii) Horizontal Common-Size Income Statements for Fiscal 2010
– 2012
Below are the common size income statements for the year
ending December 31
27. st
from 2010 to 2012. The values are shown as a percentage of the
values for the year 2010.
The last column shows the average percentage for the three-year
period.
HORIZONTAL COMMON-SIZE ANALYSIS
BHP BILLITON GROUP - INCOME
STATEMENT
2012 2011 2010
3-Yr
Average
Revenue
Group production 142.65% 140.90% 100.00% 127.85%
Third party products 75.55% 83.30% 100.00% 86.28%
136.80% 135.87% 100.00% 124.22%
Other income 171.59% 100.57% 100.00% 124.05%
Expenses excluding net finance costs 148.31% 121.50%
100.00% 123.27%
Profit from operations 118.58% 158.83% 100.00% 125.80%
28. Comprising:
Group production 118.60% 159.23% 100.00% 125.94%
Third party products 113.51% 88.29% 100.00% 100.60%
118.58% 158.83% 100.00% 125.80%
Financial income 104.65% 113.95% 100.00% 106.20%
Financial expenses 141.69% 119.58% 100.00% 120.43%
Net finance costs 159.04% 122.22% 100.00% 127.09%
Profit before taxation 117.63% 159.69% 100.00% 125.77%
Income tax expense 118.42% 106.04% 100.00% 108.15%
Royalty-related taxation (net of income
tax benefit)
55.88% 183.59% 100.00% 113.16%
Total taxation expense 114.12% 111.37% 100.00% 108.50%
Profit after taxation 119.39% 184.07% 100.00% 134.49%
Attributable to non-controlling interests 40.07% 103.83%
100.00% 81.30%
Attributable to members of BHP Billiton
Group
121.18% 185.88% 100.00% 135.69%
29. Earnings per ordinary share (basic) (US
cents)
126.68% 187.71% 100.00% 138.13%
Earnings per ordinary share (diluted) (US
cents)
126.60% 187.40% 100.00% 138.00%
BHP BILLITON Group X
11
Dividends per ordinary share – paid
during the period (US cents)
132.53% 109.64% 100.00% 114.06%
Dividends per ordinary share – declared
in respect of the period (US cents)
128.74% 116.09% 100.00% 114.94%
BHP Billiton breaks out their revenues into Three different
groups; the first on is the
Group production and since 2010 they have increased these
revenues by 42.65% from $48,193
million to $68,747 million this is substantial revenue growth in
the last 3 years. However, the
30. second source of revenue from Third party products has
decreased by 24.45% over the last three
years from $4,605 million to $3,479 million even though this is
a considerable decrease it only
reflects less than 5% of all revenues. The third revenue group is
'Other income' and they had
increased this revenue more than 70% over the last three years
from $528 Million to $906
million.
The overall profit from Operations has increased by more than
25% for the last three
years. However the Group production had more than $8 billion
decrease from year 2011 to 2012
it still was able to show an overall increase over the period of
the last three years. The Third
party products showed a $23 million dollar increase over the
same time period. The expenses
excluding net finance costs have also increased by 23.27% the
last three years to $49,380
million.
The profit after taxation for the last three years from 2010,
2011, and 2012 was a respectable
19.39% increase from $13,009 million to $15,532 million in
31. 2012.
2.3 Financial Ratios
There are many tools that may be used to evaluate a company;
however one of the most
valuable tools is a financial ratio. This section will use ratios as
a means to analyze the
financial statements of BHP over a three-year period. The
reason why ratios are used is to
simple give a better understanding of the organizations financial
health. The results of these
ratios will aid in planning, analysis of operation efficiency, goal
setting, potential
investments and the evaluation of management performance.
2.4 Liquidity Ratios
Liquidity ratios analyze the efficiency with which a company is
able to meet its short-
term obligations using assets that are readily converted into
cash. The general rule is the
higher the value of the ratios, the better the company’s ability is
at satisfying immediate
obligations.
32. Table 1: Liquidity Ratios
2012 2011 2010
Liquidity
Working capital (in millions) -1583 5542 12,092
Current ratio 0.93 1.28 1.93
Quick ratio 0.58 0.94 1.48
BHP BILLITON Group X
12
As shown in Table 1, BHP’s working capital has declined rather
drastically over
the last three years, going from 12,092million dollars to minus
1,583million dollars. This
is the equivalent of -54% in 2011 and -129% in 2012, which
shows that BHP is incurring
more current liabilities than current assets. This means there is
a possibility that BHP
may run into trouble paying back creditors in the short term,
33. from further investigation of
the financial statements it appears that in 2012 BHP’s cash and
cash equivalents reduced
by over 50% this may be the area that needs addressing.
Figure 1
Figure 1 shows a picture of how BHP’s current and quick ratios
have declined
over the years. The difference between the current ratio and the
quick ratio is that the
quick ratio is more conservative and omits inventory from the
calculation and focuses on
the liquid assets. It is assumed that a company with a current or
quick ratio that is less
than 1 would be unable to pay liabilities that may arise at that
point. Based on the ratios
BHP seemed to have reached this point in 2011 when
considering the quick ratio and in
2012 when considering the current ratio.
2.5 Profitability Ratios
The profitability ratios will give management and investors an
idea of how
34. profitable BHP has been over the years. These ratios will assess
BHP’s ability to generate
earnings as compared to expenses or costs incurred within a
particular period; a higher
value compared with previous years will suggest the company is
doing well.
Table 2 – Profitability Ratios
Profitability 2012 2011 2010
Return on assets 0.12 0.23 0.14
Return on Equity 0.23 0.41 0.26
Net Income to sales 0.21 0.33 0.24
0.00 0.50 1.00 1.50 2.00 2.50
Current ratio
Quick ratio
A Graph Showing the Quick & Current Ratio.
2010
2011
2012
35. BHP BILLITON Group X
13
Figure 2
Figure 2 indicates that 2011 was a good year for BHP. Its
profitability ratios were
at the highest, indicating there was an improvement is the
earnings compared to expenses
or costs from 2010 however this improve did not last to 2012.
The net income to sales is
the same as profit margin it measures how much of the sales
price the company actually
keeps in earnings. BHP was able to retain 24%, 33% and 21% in
the years 2010, 2011
and 2012 respectively. Ideally there should be a gradual
progression in the values but the
35% drop may be attributed to the fall in revenues. BHP should
seek ways to improve on
sales but at the same time streamlining on it costs. Return on
Equity measures
profitability in light of how effective the company has turned
36. into profit the money
invested by shareholders. BHP has generated profits based on
shareholders’ investment
of 26%, 41% and 23% in years 2010, 2011 and 2012
respectively. These values should be
an improvement on previous years; with these kinds of results
investors may be deterred
or just pull out. Great Northern Iron Ore Properties is currently
the industry’s leader is the
area of ROE, with an impressive 155.27% ROE ratio, this shows
that BHP has work to
do in this area of profitability. Next ratio to consider is Return
on Asset (ROA); this is a
measurement of how effective management is at generating
profit from its assets. BHP’s
results are 14%, 23% and 12% for 2010, 2011 and 2012
respectively. Unfortunately in
2012 BHP preformed worse in generating earnings for assets
than it did in 2010, this is
suggests that BHP can improve on their investments decisions.
2.6 Financial Strength Ratios
Another set of metric to be reviewed are those in Table 3, the
financial strength
37. ratios. The times interest earned measured in units of times per
year, measures how well
the company is able to meet its debt obligations. It the case of
BHP the results are 44.33,
79.36 and 134.06 times per year in 2010, 2011 and 2012
respectively. Although there is a
gradual increase in the values showing that BHP is able to
sustain earnings, it should also
be noted that a high ratio could suggest that BHP has an
undesirable lack of debt; it needs
to use these earnings to reinvest. EBITDA is an acronym for
Earnings Before Interest,
Taxes, Depreciation and Amortization; it indicates the
company’s operational
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45
Return on assets
Return on Equity
Net Income to sales
A Graph showing the Profitability Ratios.
2010
2011
38. 2012
BHP BILLITON Group X
14
profitability performance. In the case of BHP its EBITDA
escalated between the years
2010 to 2011 by about 60%, while in 2012 the ratio declined by
26%.
Table 3
Financial strength ratios 2012 2011 2010
Times interest earned 134.06 79.36 44.33
EBITDA 23022 31255 19572
Long-term debt/equity 0.60 0.44 0.54
Cash flow from operations to sales 0.34 0.42 0.32
Figure 3
Cash flow from operations to sales compares the cash flow to
sales; it gives
investor an indication of the company’s ability to convert sales
39. into cash. BHP did best in
2011 at converting sales into cash (42 cents for every dollar, 10
cents more than 2010), in
2012 BHP was able to convert 34 cents in every sales dollar to
cash flow. In order to
improve the cash flow from operations to sales annually, BHP
will need to improve on
generating cash through change of credit policy, reviewing bad
debts, improving in
special payment plans etc. Long-term debt to equity ratio
indicates a company’s leverage;
a company with a high ratio is seen as risky. BHP’s leverage
was lowest in 2011 at 44%
but highest in 2012 at 60% (shown in Figure 3) a company with
higher ratios suggests
that it has more liabilities than equity.
2.7 Dividend Ratios
The dividend payout ratio indicates the percentage of the
earnings that is paid to
the shareholder in form of dividend. Investors or shareholders
expect that this ratio
increases over the years or remain consistent. BHP’s dividend
payout ratio appears to
40. have increased in 2012 from 2011 by 77% this shows that BHP
is using earnings to
support dividend payments. Although this is good for the
investors, BHP should not have
increased its dividend payout in 2012 because of its current
financial challenges.
Dividend yield is similar to the dividend payout; however this
ratio measures how much
the company pays out in dividend relative to the share price
(Investopedia). Table 4
0.00 0.20 0.40 0.60 0.80
Long-term debt/equity
Cash flow from operations to sales
A Graph Showing Cash Flow/Sales &
Long-term Debt/Equity
2010
2011
2012
BHP BILLITON Group X
41. 15
shows that the dividend yield stayed at 1% for 2010 and 2011
however it increased to 2%
in 2012. This is a good indication for current and prospective
investors it shows that they
are getting more money for what they invested.
Table 4
Dividend ratios 2012 2011 2010
Dividend Payout 0.385 0.218 0.385
Dividend Yield 0.02 0.01 0.01
2.8 Valuation Ratios
Table 5
Valuation ratios 2012 2011 2010
Price to book value 0.0010 0.0016 0.0012
Cash flow per share ratio 9.12 11.24 6.05
Price/earning ratio 21.89 20.86 25.03
Price/cash flow ratio 6.93 7.92 9.43
42. The next set of ratios in Table 5 will give some inclination to
how the company is
valued. The price to book value may be used as a means to
compare the share price to
that of the book value. It is no surprise to see that in the past
three years BHP had the
highest price to book value in 2011with 0.16% and its lowest in
2012 with 0.10%. A low
price to book value may suggest that the stocks are undervalued
or it could also indicate
some problems with the company. In this case the assumption
made is that the shares
may be undervalued, as BHP seems to have struggled in 2012,
also because the
difference between 0.16% and 0.10% is marginal. Cash flow per
share ratio represents a
measure of the financial strength of the company, this measure
is important as it takes
into consideration BHP’s ability to generate cash. Results are
9.12 for year 2012, 11.24
for year 2011 and 6.05 for year 2010. Although the cash flow
per share dropped by 19%
in 2012, it did not fall below year 2010’s ratio. In order to
improve on the cash flow per
43. share BHP should find always to bring in cash through
operations this may mean
reducing credit sales, advertising more to draw new clients and
aggressive sales etc.
Investopedia explains Price to earnings (P/E) ratio as “a
valuation ratio of a company's
current share price compared to its per-share earnings”. In 2010
the P/E ratio was at
25.03, this high value would indicate that investors will be
expecting a higher earnings
growth in the future, in year 2011 the P/E ratio dropped to
20.86 but rose to 21.89 in
2012. It should be noted that a high P/E ratio could also be
viewed as risky compared to a
lower P/E, and some research states that firms with lower P/E
ratio have outperformed
the market. BHP should aim to maintain a more consistent P/E
ratio. Lastly the price to
cash flow (P/CF) ratio, this ratio compares the market value of a
firm with the cash flow.
The general rule is that a smaller value ratio is preferred; it
suggests that a firm is
generating adequate cash flows that are not yet properly
considered in the current share
44. price. Over the last three years BHP has seen a gradual decline
in the P/CF, 9.43, 7.92
and 6.93 in the years 2010, 2011 and 2012 respectively.
BHP BILLITON Group X
16
3.0 Reserve Ratios
Reserve ratios are key performance measurements used to
determine a company’s ability
to replace production and its ability to continue operations.
There are several ratios from
basic reserve replacement ratios to more complex ones.
3.1 Reserve Replacement Ratios
Comparing BHP Billiton’s reserve replacement ratios with and
without revisions,
45. it appears the reserve replacement ratios with revisions are
much more favorable as it is
replenishing its reserves at a rate greater than its rate of
production. In 2010 and 2011,
BHP is replacing its reserves at almost the rate of production
but in 2012, the company is
replenishing its reserves at almost one and a half times its
production rate. The reserve
replacement ratios without revisions are rather low since its
production rate is greater
than the replacement rate.
3.2 Reserve Life Ratios
“The reserve life ratio is used to approximate or measure the
number of years that
production could continue at the current rate if no new reserves
were added” (Wright &
Gallun p.707).
BHP BILLITON GROUP - RESERVE RATIOS 2012 2011 2010
Reserve Life Ratios - Developed Oil, Condensate, Natural Gas
and NGL Reserves
Reserve Life Ratios - Proved Developed 3.99 4.41 4.54
46. Reserve Life Ratios - Proved Undeveloped 4.05 4.34 4.17
The reserve life ratios above indicate that BHP can continue
production for a little
over 4 years at the current rate if the company decides not to
add any new reserves. The
number of years seems to be diminishing little by little every
year for both proved
developed and proved undeveloped reserves.
3.3 Net Wells to Gross Wells Ratio
The text defines gross wells as wells in which the company has
any working interest
while net wells is defined as the net interest in the wells.
BHP BILLITON GROUP 2012 2011 2010
Net Wells to Gross Ratios
Net to Gross Wells
BHP BILLITON GROUP - RESERVE RATIOS 2012 2011 2010
Reserve Replacement Ratios - Proved Developed Oil,
Condensate, Natural Gas and
NGL Reserves
47. Reserve Replacement Ratio 0.311 0.277 0.549
Reserve Replacement Ratio with Revisions 1.445 1.152 1.081
BHP BILLITON Group X
17
Crude Oil Wells 2.11 2.17 2.14
Natural Gas Wells 3.27 4.22 2.57
Total Wells 3.15 3.82 2.27
The above table represents the net to gross wells calculations.
These ratios
represent a gauge of future profitability for the company. These
high ratios indicate that
BHP Billiton owns a large working interest in their wells which
also points to the
likelihood that BHP is an operator who has a greater influence
in operations.
3.4 Average Reserves per Wells Ratio
BHP BILLITON GROUP 2012 2011 2010
48. Average Reserves per Well Ratio
Developed
440,746.12
744,067.80
2,276,265.82
Undeveloped
447,674.42
732,944.92
2,095,253.16
Average Daily Production per well -
Proved Developed Oil, Condensate
302.910
462.619
1,375.1
49. As seen above in BHP’s high averages of developed and
undeveloped reserves
per well, we can conclude that the company can produce their
reserves more efficiently
and profitably. This is also a good indication for the company’s
future profitability. The
average daily production per well ratio shows the company’s
efficiency. Once again,
these calculations result in very high averages indicating BHP is
a very efficient
production company.
4.0 Reserve Cost Ratios
Reserve cost ratios compare costs and reserves. Since BHP is
involved in both oil
and gas reserves, the cost ratios are computed by converting the
reserves to BOE, which
is a common unit of measure based on energy content (Wright &
Gallun p. 711).
4.1 Finding Cost Ratios
BHP BILLITON GROUP - RESERVE
50. COST RATIOS
2012 2011 2010
formula 1
Finding Costs/ BOE without revisions 34.754 32.297 13.012
Finding Costs/ BOE with revisions 4.310 4.208 5.681
formula 2
Finding Costs/ BOE without revisions 57.135 57.711 319.159
Finding Costs/ BOE with revisions 41.039 43.722 139.339
formula 3
BHP BILLITON Group X
18
Finding Costs/ BOE with revisions 23.722 12.784 16.892
The first formula takes the exploration and drilling costs and
divide by reserve
extensions and discoveries excluding and including revisions.
The second formula adds
51. the costs of proved properties to exploration and drilling costs
and divides it by reserve
extensions and discoveries plus purchased reserves in place.
Again one calculation
includes revisions and one does not. The last and final formula
takes all exploration
costs, exploratory and development drilling costs, and proved
and unproved property
acquisition costs and divides it by all reserve additions
including revisions in previous
estimates.
4.2 Lifting costs per BOE & DD&A per BOE
BHP BILLITON GROUP - LIFTING
COSTS PER BOE
2012 2011 2010
Lifting Cost per BOE 10.003 7.366 6.792
DD&A per BOE 26.486 12.385 12.538
Lifting costs per BOE is a performance indicator. To calculate
lifting costs per
BOE, you must divide the total annual lifting costs by the
annual production (BOE). This
52. is a measure used to evaluate the extent to which a company is
controlling its operating
costs and how efficiently the company is getting oil and gas out
of the ground (Wright &
Gallun P. 716). From the table above, it appears that BHP is
becoming less effective at
lifting the oil and gas out of the ground as the years pass.
DD&A refers to historical cost of finding and developing
reserves and can affect current
profitability. To compute, take the total annual depreciation,
depletion, and amortization
cost and divide by annual production in BOE.
5.0 Reserve Value Ratios
5.1 Value of Proved Reserve Additions per BOE
BHP BILLITON GROUP - RESERVE VALUE
RATIOS
2012 2011 2010
Value of proved reserve additions/ BOE (without
revisions)
13.324
53. 19.344
15.786
Value of proved reserve additions/ BOE (with revisions)
(7.229)
20.327
23.854
Value of proved reserve additions/ BOE (without
revisions)
9.513
4.211
15.786
Value of proved reserve additions/ BOE (with revisions) 3.438
8.038 23.854
Value of proved reserve additions per BOE assists in
54. determining the well value.
The first set of measurements was derived from diving changes
due to extensions,
discoveries, and improved recovery by reserve extensions and
discoveries and improved
recovery, one with revisions and one without. The calculations
without revisions had
slight fluctuations from year to year. The calculations with
revisions showed slight
BHP BILLITON Group X
19
change from 2010 to 2011, but 2012 appear to have taken a
nosedive. The second set of
measure take the changes due to extensions, discoveries, and
improved recovery plus
changes due to purchases of reserves in place and divide it by
reserve extensions and
discoveries, improved recovery, and purchases of reserve in
place. When incorporating
revisions to the second formula, you must add changes due to
revisions in estimate to the
55. numerator and the denominator becomes all reserve additions
including revisions in
previous estimates. The trend for both seems very sporadic and
unstable.
5.2 Value Added Ratio
BHP BILLITON GROUP - VALUE
ADDED RATIO
2012 2011 2010
Finding Costs/ BOE
23.722
12.784
16.892
Value added ratio
0.14
0.63
1.41
56. The value added ratio compares the cost of finding reserves
with the value added
by those reserves (Wright & Gallun p. 722). BHP Billiton’s
value added ratios are rather
low signaling the company may not be adding maximum reserve
values with minimum
finding costs. 2010 was the strongest year and 2012 is the
weakest in terms of value
adding.
6.0 CONCLUSIONS AND RECOMMENDATIONS
Our recommendations are based on both the financial ratios and
both of the horizontal
and the vertical analyses of BHP Billiton. BHP’s liquidity ratio
shows a steady decline in
both the current ratio and the quick ratio which helps indicate
the company’s ability to pay
their immediate obligations. Our first recommendation for the
company is to raise its cash
and cash equivalents since it has depleted by 50% since 2010,
while the company actively
reduced their current liabilities. BHP’s Return On Equity (ROE)
has gone done since 2010
57. however, with a 23% return rate, which by industry standards, is
acceptable. The Return On
Assets (ROA) also declined since 2010 to 12% and was below
the industry average. BHP
needs to decrease its operating cost to help improve the ROA.
The financial strength of the
company is indicated by times interest earned EBITDA and
shows that it has had steady
growth over the last three years.
The reserve ratio is a key performance indicator used to
determine a company’s ability to
replace production and its ability to continue operations. Over
the past three years it seems
that BHP’s replacement of reserves have been greater than its
production, so it appears that
the company has more than four years of production of reserves,
which is a positive sign.
BHP’s net wells to gross wells ratio is high and indicates that
the company owns a large
working interest in its wells and who has a greater influence in
operations. The lifting cost
ratio over the last three years indicates that the company is
becoming less efficient and we
58. recommend cutting their DD&A costs while improving their
lifting efficiency.
BHP BILLITON Group X
20
7.0 REFERENCES
Retrieved from
http://www.bhpbilliton.com/home/Pages/default.aspx
ial Analysis Software | Financial Analysis | Financial
Statements | Current Ratio |
Financial Ratio | ReadyRatios.com. (n.d.). Retrieved July 2013,
from
http://www.readyratios.com
- Educating the world about finance. (n.d.).
Retrieved July 2013, from
http://www.investopedia.com
gas accounting. Tulsa,
Okla: PennWell.
59. 8.0 APPENDIX
8.1 Income Statements for Fiscal Years 2010-2012 for BHP
Billiton
BHP BILLITON GROUP - INCOME
STATEMENT
2012 2011 2010
US$M US$M US$M
Revenue
Group production 68,747 67,903 48,193
Third party products 3,479 3,836 4,605
72,226 71,739 52,798
Other income 906 531 528
Expenses excluding net finance costs (49,380) (40,454) (33,295)
Profit from operations 23,752 31,816 20,031
Comprising:
Group production 23,626 31,718 19,920
Third party products 126 98 111
23,752 31,816 20,031
Financial income 225 245 215
60. Financial expenses (955) (806) (674)
Net finance costs (730) (561) (459)
Profit before taxation 23,022 31,255 19,572
Income tax expense (7,238) (6,481) (6,112)
Royalty-related taxation (net of income tax benefit) (252) (828)
(451)
Total taxation expense (7,490) (7,309) (6,563)
Profit after taxation 15,532 23,946 13,009
Attributable to non-controlling interests 115 298 287
Attributable to members of BHP Billiton Group 15,417 23,648
12,722
Earnings per ordinary share (basic) (US cents) 289.6 429.1
228.6
Earnings per ordinary share (diluted) (US cents) 288.4 426.9
227.8
Dividends per ordinary share – paid during the period 110.0
91.0 83.0
http://www.bhpbilliton.com/home/Pages/default.aspx
http://www.readyratios.com/
http://www.investopedia.com/
BHP BILLITON Group X
61. 21
(US cents)
Dividends per ordinary share – declared in respect of
the period (US cents)
112.0 101.0 87.0
8.2 Balance Sheets for Fiscal Years 2010-2012 for BHP Billiton
BHP BILLITON GROUP - BALANCE SHEET 2012 2011 2010
US$M US$M US$M
ASSETS
Current assets
Cash and cash equivalents 4,781 10,084 12,456
Trade and other receivables 7,704 8,197 6,543
Other financial assets 282 264 292
Inventories 6,233 6,154 5,334
Assets held for sale 848 -
Current tax assets 137 273 189
62. Other 466 308 320
Total current assets 20,451 25,280 25,134
Non-current assets
Trade and other receivables 1,475 2,093 1,381
Other financial assets 1,881 1,602 1,510
Inventories 424 363 343
Property, plant and equipment 95,247 67,945 55,576
Intangible assets 5,112 1,456 687
Deferred tax assets 4,525 3,993 4,053
Other 158 188 168
Total non-current assets 108,822 77,640 63,718
Total assets 129,273 102,920 88,852
LIABILITIES
Current liabilities
Trade and other payables 12,024 9,723 6,467
Interest bearing liabilities 3,531 3,519 2,191
Liabilities held for sale 433 -
Other financial liabilities 200 288 511
63. Current tax payable 2,811 3,693 1,685
Provisions 2,784 2,256 1,899
Deferred income 251 259 289
Total current liabilities 22,034 19,738 13,042
Non-current liabilities
Trade and other payables 509 555 469
Interest bearing liabilities 24,799 12,388 13,573
BHP BILLITON Group X
22
Other financial liabilities 317 79 266
Deferred tax liabilities 5,287 2,683 4,320
Provisions 8,914 9,293 7,433
Deferred income 328 429 420
Total non-current liabilities 40,154 25,427 26,481
Total liabilities 62,188 45,165 39,523
Net assets 67,085 57,755 49,329
64. EQUITY
Share capital – BHP Billiton Limited 1,186 1,183 1,227
Share capital – BHP Billiton Plc 1,069 1,070 1,116
Treasury shares (533) (623) (525)
Reserves 1,912 2,001 1,906
Retained earnings 62,236 53,131 44,801
Total equity attributable to members of BHP
Billiton Group
65,870 56,762 48,525
Non-controlling interests 1,215 993 804
Total equity 67,085 57,755 49,329
10-K 1 apa10-k2017.htm 10-K
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
65. FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4300
APACHE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-0747868
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Post Oak Central, 2000 Post Oak Boulevard, Suite 100,
Houston, Texas 77056-4400
(Address of principal executive offices)
Registrant’s telephone number, including area code (713) 296-
6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange
on which registered
Common Stock, $0.625 par value
66. New York Stock Exchange, Chicago Stock Exchange
and NASDAQ Global Select Market
7.75% Notes Due 2029
(assumed by Apache Corporation in 2017
pursuant to notes issued by a subsidiary
and guaranteed by Apache Corporation)
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.625 par value
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [
] No [X]
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and
post such files). Yes [X] No [ ]
67. Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act. Large accelerated filer
[X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller
reporting company [ ] Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act):
Yes [ ] No [X]
Aggregate market value of the voting and non-voting common
equity held by non-affiliates of registrant as of June 30, 2017 $
18,257,879,903
Number of shares of registrant’s common stock outstanding as
of January 31, 2018 381,447,822
Documents Incorporated By Reference
Portions of registrant’s proxy statement relating to registrant’s
2018 annual meeting of stockholders have been incorporated by
68. reference in Part II and Part III of this annual report
on Form 10-K.
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TABLE OF CONTENTS
DESCRIPTION
Item Page
PART I
1. BUSINESS 1
1A. RISK FACTORS 14
1B. UNRESOLVED STAFF COMMENTS 23
2. PROPERTIES 1
3. LEGAL PROCEEDINGS 23
4. MINE SAFETY DISCLOSURES 23
PART II
5.
MARKET FOR THE REGISTRANT’S COMMON EQUITY,
69. RELATED STOCKHOLDER MATTERS, AND ISSUER
PURCHASES
OF EQUITY SECURITIES 24
6. SELECTED FINANCIAL DATA 26
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
27
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 48
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA 49
9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE 49
9A. CONTROLS AND PROCEDURES 49
9B. OTHER INFORMATION 49
PART III
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE 50
11. EXECUTIVE COMPENSATION 50
12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER
MATTERS 50
13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE 50
70. 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 50
PART IV
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 51
16. FORM 10-K SUMMARY 51
i
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FORWARD-LOOKING STATEMENTS AND RISK
This Annual Report on Form 10-K includes “forward-looking
statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical
facts included or incorporated by reference in this
report, including, without limitation, statements regarding our
future financial position, business strategy, budgets, projected
revenues, projected costs and plans,
and objectives of management for future operations, are
forward-looking statements. Such forward-looking statements
are based on our examination of historical
operating trends, the information that was used to prepare our
estimate of proved reserves as of December 31, 2017, and other
71. data in our possession or available
from third parties. In addition, forward-looking statements
generally can be identified by the use of forward-looking
terminology such as “may,” “will,” “could,”
“expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,”
“believe,” or “continue” or similar terminology. Although we
believe that the expectations reflected in
such forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to have been
correct. Important factors that could cause
actual results to differ materially from our expectations include,
but are not limited to, our assumptions about:
• the market prices of oil, natural gas, NGLs, and other products
or services;
• our commodity hedging arrangements;
• the supply and demand for oil, natural gas, NGLs, and other
products or services;
• production and reserve levels;
• drilling risks;
• economic and competitive conditions;
• the availability of capital resources;
• capital expenditure and other contractual obligations;
• currency exchange rates;
• weather conditions;
• inflation rates;
72. • the availability of goods and services;
• legislative, regulatory, or policy changes;
• terrorism or cyber attacks;
• occurrence of property acquisitions or divestitures;
• the integration of acquisitions;
• the securities or capital markets and related risks such as
general credit, liquidity, market, and interest-rate risks; and
• other factors disclosed under Items 1 and 2—Business and
Properties—Estimated Proved Reserves and Future Net Cash
Flows, Item 1A—Risk Factors,
Item 7—Management’s Discussion and Analysis of Financial
Condition and Results of Operations, Item 7A—Quantitative
and Qualitative Disclosures
About Market Risk and elsewhere in this Form 10-K.
All subsequent written and oral forward-looking statements
attributable to the Company, or persons acting on its behalf, are
expressly qualified in their entirety
by the cautionary statements. Except as required by law, we
assume no duty to update or revise our forward-looking
statements based on changes in internal
estimates or expectations or otherwise.
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DEFINITIONS
All defined terms under Rule 4-10(a) of Regulation S-X shall
have their statutorily prescribed meanings when used in this
report. As used in this document:
“3-D” means three-dimensional.
“4-D” means four-dimensional.
“b/d” means barrels of oil or natural gas liquids per day.
“bbl” or “bbls” means barrel or barrels of oil or natural gas
liquids.
“bcf” means billion cubic feet of natural gas.
“boe” means barrel of oil equivalent, determined by using the
ratio of one barrel of oil or NGLs to six Mcf of gas.
“boe/d” means boe per day.
“Btu” means a British thermal unit, a measure of heating value.
“Liquids” means oil and natural gas liquids.
“LNG” means liquefied natural gas.
“Mb/d” means Mbbls per day.
“Mbbls” means thousand barrels of oil or natural gas liquids.
74. “Mboe” means thousand boe.
“Mboe/d” means Mboe per day.
“Mcf” means thousand cubic feet of natural gas.
“Mcf/d” means Mcf per day.
“MMbbls” means million barrels of oil or natural gas liquids.
“MMboe” means million boe.
“MMBtu” means million Btu.
“MMBtu/d” means MMBtu per day.
“MMcf” means million cubic feet of natural gas.
“MMcf/d” means MMcf per day.
“NGL” or “NGLs” means natural gas liquids, which are
expressed in barrels.
“NYMEX” means New York Mercantile Exchange.
“oil” includes crude oil and condensate.
“PUD” means proved undeveloped.
“SEC” means United States Securities and Exchange
Commission.
“Tcf” means trillion cubic feet of natural gas.
“U.K.” means United Kingdom.
75. “U.S.” means United States.
References to “Apache,” the “Company,” “we,” “us,” and “our”
include Apache Corporation and its consolidated subsidiaries
unless otherwise specifically
stated.
With respect to information relating to our working interest in
wells or acreage, “net” oil and gas wells or acreage is
determined by multiplying gross wells or
acreage by our working interest therein. Unless otherwise
specified, all references to wells and acres are gross.
iii
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PART I
ITEMS 1 and 2. BUSINESS AND PROPERTIES
General
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 has exploration
and production operations in three geographic areas: the U.S.,
Egypt, and offshore the U.K. in the North
Sea (North Sea). Apache also has exploration interests in
76. Suriname that may, over time, result in a reportable discovery
and development opportunity.
Our common stock, par value $0.625 per share, has been listed
on the New York Stock Exchange (NYSE) since 1969, on the
Chicago Stock Exchange (CHX)
since 1960, and on the NASDAQ Global Select Market
(NASDAQ) since 2004. On May 18, 2017, we filed
certifications of our compliance with the listing standards of
the NYSE and the NASDAQ, including our principal executive
officer’s certification of compliance with the NYSE standards.
Through our website,
www.apachecorp.com, you can access, free of charge, electronic
copies of the charters of the committees of our Board of
Directors, other documents related to our
corporate governance (including our Code of Business Conduct
and Ethics and Apache’s Corporate Governance Principles), and
documents we file with the SEC,
including our annual reports on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K, as well as any
amendments to these reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934. Included in our annual and quarterly
reports are the certifications of our principal
executive officer and our principal financial officer that are
required by applicable laws and regulations. Access to these
electronic filings is available as soon as
reasonably practicable after we file such material with, or
furnish it to, the SEC. You may also request printed copies of
our corporate charter, bylaws, committee
charters, or other governance documents free of charge by
writing to our corporate secretary at the address on the cover of
this report. Our reports filed with the SEC
are made available to read and copy at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D.C.,
20549. You may obtain information about the Public
77. Reference Room by contacting the SEC at 1-800-SEC-0330.
Reports filed with the SEC are also made available on its
website at www.sec.gov. From time to time, we
also post announcements, updates, and investor information on
our website in addition to copies of all recent press releases.
Information on our website or any other
website is not incorporated by reference into, and does not
constitute a part of, this Annual Report on Form 10-K.
Properties to which we refer in this document may be held by
subsidiaries of Apache Corporation.
Business Strategy
Our VISION is to be a premier exploration and production
company.
Our MISSION is to grow in an innovative, safe,
environmentally responsible, and profitable manner for the
long-term benefit of our shareholders.
Our STRATEGY is to deliver top-tier returns by maximizing
recovery and minimizing costs through continuous
improvement. Apache’s long-term perspective is
centered on the following core strategic components:
• optimization of returns
• disciplined financial structure
• rigorous portfolio management
Over the past several years, Apache entered into a series of
transactions that upgraded its portfolio of assets, enhanced its
capital allocation process to further
optimize returns and long-term shareholder value, and
successfully completed a strategic shift from its historical
acquisition and exploitation focus to one of
78. internally generated exploration with full-cycle, returns-focused
growth.
Rigorous management of the Company’s asset portfolio plays a
key role in optimizing shareholder value over the long term.
Specifically, we reduced capital
investment in 2015 and 2016 to align with cash flow in a lower
commodity price environment and allowed production to decline
rather than pursue growth in an
unfavorable service cost environment. Additionally, the
Company monetized certain capital-intensive investments that
were not accretive to earnings in the near term
and other non-strategic assets. These divestitures included all of
Apache’s operations in Australia and Canada, including LNG
facility investments, its interest in the
Scottish Area Gas Evacuation system (SAGE) and pipeline in
the North Sea, and various non-core leasehold positions in
North America. The Company made
strategic decisions to allocate the proceeds of these asset
divestitures to more impactful development opportunities,
including development of our Alpine High
discovery in the Delaware Basin. These actions have enabled us
to focus
1
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our investments on improving long-term returns, maintain our
dividend, and reduce debt without diluting shareholders through
79. issuing equity.
We now have a diversified portfolio that features strong free
cash flow generating assets in Egypt and the North Sea, which
benefit from premium Brent crude
oil pricing, and top-tier assets in the Permian Basin, the
combination of which are the Company’s foundation for returns-
focused growth.
For a more in-depth discussion of the Company’s 2017 results,
divestitures, strategy, and its capital resources and liquidity,
please see Part II, Item 7—
Management’s Discussion and Analysis of Financial Condition
and Results of Operations of this Form 10-K.
Geographic Area Overviews
Apache has exploration and production operations in three
geographic areas: the U.S., Egypt, and the North Sea. Apache
also has exploration interests in
Suriname that may, over time, result in a reportable discovery
and development opportunity.
The following table sets out a brief comparative summary of
certain key 2017 data for each of Apache’s operating areas.
Additional data and discussion is
provided in Part II, Item 7—Management’s Discussion and
Analysis of Financial Condition and Results of Operations of
this Form 10-K.
Production
Percentage
of Total
81. Other International — — — — — 1 —
Total International 80.3 48 3,385 364 31 109 88
Total 166.9 100% $ 5,887 1,175 100% 353 323
(1) During the third quarter of 2017, Apache completed the sale
of its Canadian operations.
(2) Apache’s operations in Egypt, excluding a one-third
noncontrolling interest, contributed 27 percent of 2017
production and accounted for 15 percent of year-end estimated
proved
reserves.
(3) Sales volumes from the North Sea for 2017 were 21.2
MMboe. Sales volumes may vary from production volumes as a
result of the timing of liftings in the Beryl field.
North America
I n 2017, Apache’s North American operations contributed
approximately 52 percent of production and 69 percent of
estimated year-end proved reserves.
Apache has access to significant liquid hydrocarbons across its
6.7 million gross acres in North America, 71 percent of which
are undeveloped.
In North America, Apache has two onshore regions:
• The Permian region located in west Texas and New Mexico
includes the Permian sub-basins, the Midland Basin, Central
Basin Platform/Northwest Shelf,
and Delaware Basin. Examples of shale plays within this region
include the Woodford, Barnett, Pennsylvanian, Cline,
Wolfcamp, Bone Spring, and
Spraberry.
82. • The Midcontinent/Gulf Coast region includes the Granite
Wash, Tonkawa, Marmaton, Cleveland, and other formations of
the West Anadarko Basin, the
Canyon Lime formation in the Texas panhandle, the Woodford-
SCOOP and Stack plays located in central Oklahoma, and the
Eagle Ford shale in east Texas.
Apache also has one offshore region in North America, the Gulf
of Mexico region, which consists of both shallow and deep
water exploration and production
activities. Apache exited its Canadian operations in August
2017.
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Permian Region The Permian region is one of Apache’s core
growth areas. Highlights of the Company’s operations in the
region include:
• Over 2.8 million gross acres with exposure to numerous plays
focused primarily in the Midland Basin, the Central Basin
Platform/Northwest Shelf, and the
Delaware Basin.
• Estimated proved reserves of 681 MMboe at year-end 2017,
representing 58 percent of the Company’s worldwide proved
reserves.
83. • Annual production of 157.8 Mboe/d declined only 2 percent
from 2016. Fourth-quarter 2017 production increased 10 percent
from the prior sequential
quarter, a reflection of the success of the Midland Basin drilling
program and the continued production ramp up at Alpine High,
which first came online in
May 2017.
• In 2017, the Permian region averaged 16 rigs and drilled or
participated in 215 wells, 158 of which were horizontal, with a
97 percent success rate.
In September 2016, Apache announced the discovery of a
significant new resource play, “Alpine High.” Apache’s Alpine
High acreage lies in the southern
portion of the Delaware Basin, primarily in Reeves County,
Texas. The Company has an acreage position in the play of
approximately 340,000 net acres. Alpine High
contains a vertical column up to 6,000 feet encompassing five
geologic formations, with multiple target zones spanning the
hydrocarbon phase window from dry gas
to wet gas to oil. Apache has identified over 3,500 economic
drilling locations in a wet gas play and over 1,000 locations in a
dry gas play at Alpine High. The
Company is also working to delineate an emerging oil play at
Alpine High, with at least 500 locations already identified.
During 2017, Apache drilled 45 wells at Alpine
High with a 91 percent success rate, including many concept
test wells drilled to verify our understanding of the play. Using
data collected from strategic testing and
delineation drilling, the Company is now optimizing wells
drilled in Alpine High using customized targeting, larger fracs,
and longer laterals. Combined with multi-well
pad drilling and revenue uplift expected from oil and NGLs
present in the wet gas play, Alpine High is anticipated to
84. generate strong cash margins and a competitive
recycle ratio when compared to other Permian operations.
Apache began construction of infrastructure for Alpine High in
November 2016 and delivered first gas
sales from the field in May 2017. Through year-end 2017, the
Company had invested $706 million on construction of these
midstream assets. The Company will
continue to expand gas processing capacity with new
installations, including cryogenic processing units, and
expansions at existing installations throughout 2018
and 2019. Apache continues to evaluate midstream monetization
strategically, and multiple options are being considered.
In addition to activity in Alpine High, the Permian region
drilled or participated in 170 wells in 2017, with a 99 percent
success rate.
Apache plans to continue this elevated level of activity in the
Permian region during 2018, while continuing to balance capital
investments between its larger
development project at Alpine High and focused exploration and
development programs on other core assets in its Permian
region. During 2018, the Company
expects to average approximately 14 drilling rigs, which
includes six to seven rigs at Alpine High focused on a
combination of retention, development, and delineation
drilling. Approximately $1.6 billion, or roughly two-thirds, of
the Company’s 2018 capital upstream budget will be allocated
to the Permian region. The Company
anticipates investment of $500 million in the midstream
development of Alpine High in 2018.
Midcontinent/Gulf Coast Region Apache’s Midcontinent/Gulf
Coast region includes 1.8 million gross acres and over 3,100
producing wells primarily in
western Oklahoma, the Texas Panhandle and the Eagle Ford
85. shale in east Texas. In 2017, the region accounted for 9 percent
of the Company’s production and
approximately 10 percent of the Company’s year-end estimated
proved reserves.
In 2017, Apache reduced capital activity in the region and
drilled only three operated wells during the year, which were all
productive. The Company began
allocating additional capital to the region in the fourth quarter,
focusing on retaining acreage. In 2018, Apache plans to run a
targeted program, drilling additional
wells in the Woodford-SCOOP play. In addition, the region will
continue its focus on high grading acreage and building its
inventory of future drilling locations.
Gulf of Mexico Region The Gulf of Mexico region comprises
assets in the offshore waters of the Gulf of Mexico and onshore
Louisiana. In addition to its
interest in several deepwater exploration and development
offshore leases, when the Company sold in 2013 substantially
all of its offshore assets in water depths less
than 1,000 feet, it retained a 50 percent ownership interest in all
exploration blocks and in horizons below production in
development blocks, and access to existing
infrastructure. Apache’s offshore technical teams continue to
focus on evaluating subsalt and other deeper exploration
opportunities in water depths less than 1,000
feet, which have been relatively untested by the industry, where
high-potential deep hydrocarbon plays may exist. During 2017,
Apache’s Gulf of Mexico region
contributed 6.1 Mboe/d to the Company’s total production.
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Canada Region On June 30, 2017, Apache completed the sale of
its Canadian assets at Midale and House Mountain for cash
proceeds of approximately $228
million. In August 2017, Apache completed the sale of its
remaining Canadian operations for cash proceeds of
approximately $478 million. The sale of Apache’s
Canadian operations further streamlines its portfolio, enabling
the Company to allocate a higher percentage of capital to the
Permian Basin. In 2017, the region
accounted for 7 percent of the Company’s production.
North America Mark eting In general, most of the Company’s
North American gas is sold at either monthly or daily index
based prices. The tenor of the
Company’s sales contracts span from daily to multi-year
transactions. Natural gas is sold to a variety of customers that
include local distribution, utility, and
midstream companies as well as end-users, marketers, and
integrated major oil companies. Apache strives to maintain a
diverse client portfolio, which is intended to
reduce the concentration of credit risk. In 2017, Apache began
selling gas that was consumed in Mexico and to the only
operational LNG export facility in the US.
In December 2017, Apache announced it had secured 500
MMcf/d of natural gas transport capacity via the Gulf Coast
Express Pipeline Project (GCX Project).
The GCX Project will connect the Waha Hub near Coyanosa,
Texas in the Permian Basin to Agua Dulce, Texas near the
Texas Gulf Coast and will provide Apache
87. access to domestic industrial and utility users as well as
incremental demand for LNG exports and Mexico markets. As a
significant shipper on the GCX line, Apache
has also secured an option for up to a 15 percent equity stake in
the pipeline. This takeaway capacity will allow greater
flexibility and market optionality for Apache’s
Permian production, including increasing volumes from Alpine
High. The GCX pipeline is a joint project of Kinder Morgan
Texas Pipeline LLC, a subsidiary of Kinder
Morgan, Inc., DCP Midstream, LP, and an affiliate of Targa
Resources Corp. The project is expected to be in service in
October 2019, pending the receipt of necessary
regulatory approvals.
Apache primarily markets its North American crude oil to
integrated major oil companies, marketing and transportation
companies, and refiners based on a
West Texas Intermediate (WTI) price, adjusted for quality,
transportation, and a market-reflective differential.
In the U.S., Apache’s objective is to maximize the value of
crude oil sold by identifying the best markets and most
economical transportation routes available to
move the product. Sales contracts are generally 30-day
evergreen contracts that renew automatically until canceled by
either party. These contracts provide for sales
that are priced daily at prevailing market prices. Also, from
time to time, the Company will enter into physical term sales
contracts for durations up to five years. These
term contracts typically have a firm transportation commitment
and often provide for the higher of prevailing market prices
from multiple market hubs.
Apache’s NGL production is sold under contracts with prices
based on local supply and demand conditions, less the costs for
transportation and fractionation,
88. or on a weighted-average sales price received by the purchaser.
International
In 2017, international assets contributed 48 percent of Apache’s
production and 57 percent of oil and gas revenues.
Approximately 31 percent of estimated
proved reserves at year-end were located outside North
America.
Apache has two international regions:
• The Egypt region includes onshore conventional assets in
Egypt’s Western Desert.
• The North Sea region includes offshore assets based in the
United Kingdom.
The Company also has an offshore exploration program in
Suriname.
Egypt Apache’s Egypt operations are conducted pursuant to
production sharing contracts (PSCs). Under the terms of the
Company’s PSCs, the contractor
partner (Contractor) bears the risk and cost of exploration,
development, and production activities. In return, if exploration
is successful, the Contractor receives
entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a stipulated
share of production after cost recovery.
Additionally, the Contractor’s income taxes, which remain the
liability of the Contractor under domestic law, are paid by
Egyptian General Petroleum Corporation
(EGPC) on behalf of the Contractor out of EGPC’s production
entitlement. Income taxes paid to the Arab Republic of Egypt on
behalf of the Contractor are recognized
89. as oil and gas sales revenue and income tax expense and
reflected as production and estimated reserves. Because
Contractor cost recovery entitlement and income
taxes paid on its behalf are determined as a monetary amount,
the quantities of production entitlement and estimated reserves
attributable to these monetary amounts
will fluctuate with commodity prices. In addition, because the
Contractor income taxes are paid by EGPC, the amount of the
income tax has no economic impact on
Apache’s Egypt operations despite impacting Apache’s
production and reserves.
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Apache has 22 years of exploration, development and operations
experience in Egypt and is one of the largest acreage holders in
Egypt’s Western Desert. At
year-end 2017, the Company held 5.6 million gross acres in 25
separate concessions. Development leases within concessions
currently have expiration dates ranging
from 4 to 20 years, with extensions possible for additional
commercial discoveries or on a negotiated basis. Approximately
69 percent of the Company’s gross acreage
in Egypt is undeveloped, providing us with considerable
exploration and development opportunities for the future.
During 2017, Apache received final approval of
the NW Razzak and South Alam El Shawish concession blocks.
Combined, the two concessions added approximately 1.6 million
90. net undeveloped acres in Egypt.
The Company’s estimated proved reserves in Egypt are reported
under the economic interest method and exclude the host
country’s share of reserves. In
addition, Sinopec International Petroleum Exploration and
Production Corporation (Sinopec) holds a one-third minority
participation interest in Apache’s oil and gas
operations in Egypt. The Egypt region, including the one-third
noncontrolling interest, contributed 35 percent of 2017
production, 20 percent of year-end estimated
proved reserves, and 33 percent of estimated discounted future
net cash flows. Excluding the noncontrolling interest, Egypt
contributed 27 percent of 2017
production, 15 percent of year-end estimated proved reserves,
and 25 percent of estimated discounted future net cash flows.
In 2017, the region drilled 67 development and 27 exploration
wells. Approximately 52 percent of the exploration wells were
successful, further expanding
Apache’s presence in the westernmost concessions and
unlocking additional opportunities in existing plays. A key
component of the region’s success has been the
ability to acquire and evaluate 3-D seismic surveys that enable
Apache’s technical teams to consistently high-grade existing
prospects and identify new targets
across multiple pay horizons in the Cretaceous, Jurassic, and
deeper Paleozoic formations. In September 2017, Apache began
shooting high-resolution 3-D seismic
surveys in the West Kalabsha concession, the first of its kind in
the Western Desert. The Company will ultimately expand the
shoot to cover the majority of its
acreage in Egypt. The program will provide newer vintage,
higher resolution imaging of the substrata across Apache’s
Western Desert position, allowing the
Company to build and high-grade its drilling inventory.
91. Egypt Mark eting Apache’s gas production in Egypt is sold to
EGPC primarily under an industry-pricing formula, a sliding
scale based on Dated Brent crude oil
with a minimum of $1.50 per MMBtu and a maximum of $2.65
per MMBtu, plus an upward adjustment for liquids content. The
region averaged $2.80 per Mcf in 2017.
Oil production is sold to third parties in the export market or to
EGPC when called upon to supply domestic demand. Oil
production sold to third parties is
exported from or sold at one of two terminals on the northern
coast of Egypt. Oil production sold to EGPC is sold at prices
equivalent to the export market.
North Sea Apache has interests in approximately 362,000 gross
acres in the U.K. North Sea. The region contributed 13 percent
of Apache’s 2017 production
and approximately 11 percent of year-end estimated proved
reserves.
Apache entered the North Sea in 2003 after acquiring an
approximate 97 percent working interest in the Forties field
(Forties). Since acquiring Forties, Apache
has actively invested in the region and has established a large
inventory of drilling prospects through successful exploration
programs and the interpretation of
acquired 3-D and 4-D seismic data. Building upon its success in
Forties, in 2011 Apache acquired Mobil North Sea Limited,
providing the region with additional
exploration and development opportunities across numerous
fields, including operated interests in the Beryl, Nevis, Nevis
South, Skene, and Buckland fields and a
non-operated interest in the Maclure field. Apache also has a
non-operated interest in the Nelson field. The Beryl field, which
is a geologically complex area with
92. multiple fields and stacked pay potential, provides for
significant exploration opportunity. The North Sea region plays
a strategic role in Apache’s portfolio by
providing competitive investment opportunities and potential
reserve upside with high-impact exploration potential.
During 2017, the region drilled 10 development wells with a 90
percent success rate: four at Forties, four at Beryl, and two at
Callater. In addition, it drilled or
participated in four exploration wells with a 25 percent success
rate. Exploration success over the past three years has averaged
50 percent.
Apache progressed on the 2015 Callater exploration discovery
in the Beryl area, with first production commencing in the
second half of 2017. Apache currently
has two highly productive wells at Callater, with a current oil
cut of approximately 70 percent. Apache holds a 55 percent
working interest in Callater and operates the
field. Appraisal and development plans continue to be finalized
on the Seagull and Corona discoveries, while the more recent
Storr discovery continues to be
evaluated. Apache holds a 35, 100, and 55 percent interest in
the Seagull, Corona and Storr discoveries, respectively.
The Company plans to average three rigs in the North Sea for
2018, with two platform rigs (one at Forties and one at Beryl)
and a semi-submersible rig.
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North Sea Mark eting Apache has traditionally sold its North
Sea crude oil under term contracts, with a market-based index
price plus a premium, which reflects
the higher market value for term arrangements.
Natural gas from the Beryl field is processed through the SAGE
gas plant. The gas is sold to a third party at the St. Fergus entry
point of the national grid on a
National Balancing Point index price basis. The condensate mix
from the SAGE plant is processed further downstream. The split
streams of propane and butane are
sold on a monthly entitlement basis, and condensate is sold on a
spot basis at the Braefoot Bay terminal using index pricing less
transportation. As a result of the
recent SAGE divestiture, Apache expects to incur additional
tariffs in its North Sea region ranging from $7 million to $10
million annually.
Australia During the second quarter of 2015, Apache completed
the sale of its Australian LNG business and oil and gas assets.
Results of operations and
consolidated cash flows for the divested Australia assets are
reflected as discontinued operations in the Company’s financial
statements for all periods presented in
this Annual Report on Form 10-K.
Other Exploration
New Ventures Apache’s global New Ventures team provides
exposure to new growth opportunities by looking outside of the
Company’s traditional core areas
and targeting higher-risk, higher-reward exploration
opportunities located in frontier basins as well as new plays in
94. more mature basins. Apache drilled an exploration
well in the first half of 2017 in offshore Suriname, which was
unsuccessful. Plans for 2018 include continued analysis and
review of the Company’s deepwater
prospects offshore Suriname.
Delivery Commitments
Apache has certain long-term contracts with fixed minimum
sales volume commitments for natural gas in the Permian Basin.
These contracts require Apache to
deliver approximately 144 bcf for the period from 2018 through
2020.
We expect to fulfill the majority of these delivery commitments
with production from our proved reserves. Any remaining
commitments may be fulfilled with
production from continued development and/or spot market
purchases as necessary. We have not experienced any
significant constraints in satisfying the
committed quantities required by our sales commitments.
Major Customers
For the years ended 2017, 2016, and 2015, the customers,
including their subsidiaries, that represented more than 10
percent of the Company’s worldwide oil
and gas production revenues were as follows:
For the Year Ended December 31,
2017 2016 2015
BP plc 12% 9% 8%
China Petroleum & Chemical Corporation 16% 21% 12%
Egyptian General Petroleum Corporation 11% 12% 11%
Royal Dutch Shell plc 6% 5% 11%
95. 6
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Drilling Statistics
Worldwide in 2017, Apache participated in drilling 353 gross
wells, with 323 (92 percent) completed as producers.
Historically, Apache’s drilling activities in the
U.S. have generally concentrated on exploitation and extension
of existing producing fields rather than exploration. As a
general matter, Apache’s operations outside
of North America focus on a mix of exploration and
development wells. In addition to Apache’s completed wells, at
year-end a number of wells had not yet reached
completion: 126 gross (95.8 net) in the U.S., 18 gross (15.7 net)
in Egypt, and 1 gross (0.5 net) in the North Sea.
The following table shows the results of the oil and gas wells
drilled and completed for each of the last three fiscal years:
Net Exploratory Net Development Total Net Wells
Productive Dry Total Productive Dry Total Productive
Dry Total
2017
United States 42.9 4.3 47.2 101.5 1.0 102.5 144.4 5.3
149.7
Canada — 1.0 1.0 0.2 — 0.2 0.2 1.0 1.2
Egypt 13.7 12.0 25.7 59.3 3.0 62.3 73.0 15.0 88.0
96. North Sea 0.6 1.9 2.5 6.4 1.0 7.4 7.0 2.9 9.9
Other International — 0.5 0.5 — — — — 0.5 0.5
Total 57.2 19.7 76.9 167.4 5.0 172.4 224.6 24.7 249.3
2016
United States 18.9 5.0 23.9 79.5 1.9 81.4 98.4 6.9 105.3
Canada — 2.0 2.0 10.2 — 10.2 10.2 2.0 12.2
Egypt 7.3 5.1 12.4 40.5 1.0 41.5 47.8 6.1 53.9
North Sea — 0.9 0.9 8.2 1.6 9.8 8.2 2.5 10.7
Total 26.2 13.0 39.2 138.4 4.5 142.9 164.6 17.5 182.1
2015
United States 14.7 8.0 22.7 289.0 5.3 294.3 303.7 13.3
317.0
Canada 4.0 — 4.0 16.7 — 16.7 20.7 — 20.7
Egypt 13.4 8.6 22.0 82.3 3.0 85.3 95.7 11.6 107.3
North Sea 1.6 0.7 2.3 15.9 3.5 19.4 17.5 4.2 21.7
Other International — 0.5 0.5 — — — — 0.5 0.5
Total 33.7 17.8 51.5 403.9 11.8 415.7 437.6 29.6 467.2
Productive Oil and Gas Wells
The number of productive oil and gas wells, operated and non-
operated, in which the Company had an interest as of December
31, 2017, is set forth below:
Oil Gas Total
Gross Net Gross Net Gross Net
United States 13,260 8,600 3,090 1,555 16,350 10,155
Egypt 1,145 1,075 130 120 1,275 1,195
North Sea 165 123 20 12 185 135
Total 14,570 9,798 3,240 1,687 17,810 11,485
97. Domestic 13,260 8,600 3,090 1,555 16,350 10,155
Foreign 1,310 1,198 150 132 1,460 1,330
Total 14,570 9,798 3,240 1,687 17,810 11,485
Gross natural gas and crude oil wells include 570 wells with
multiple completions.
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Production, Pricing, and Lease Operating Cost Data
The following table describes, for each of the last three fiscal
years, oil, NGL, and gas production volumes, average lease
operating costs per boe (including
transportation costs but excluding severance and other taxes),
and average sales prices for each of the countries where the
Company has operations:
Production
Average Lease
Operating
Cost per Boe
Average Sales Price
Oil NGL Gas Oil NGL Gas
98. Year Ended December 31, (MMbbls) (MMbbls) (Bcf) (Per
bbl) (Per bbl) (Per Mcf)
2017
United States 33.4 17.8 143.9 $ 8.92 $ 48.40 $ 16.14 $ 2.56
Canada(1) 2.4 1.0 48.0 12.01 45.25 16.39 2.17
Egypt(2) 35.5 0.3 141.0 6.85 53.57 36.79 2.80
North Sea(3) 17.9 0.4 16.6 17.21 53.81 36.22 5.54
Total 89.2 19.5 349.5 9.45 51.46 16.90 2.74
2016
United States 38.0 19.8 145.0 $ 7.72 $ 39.43 $ 9.28 $ 2.17
Canada 4.8 2.1 88.8 11.52 37.62 8.15 1.64
Egypt(2) 37.9 0.4 143.4 7.86 43.66 28.68 2.71
North Sea(3) 20.0 0.6 26.3 13.14 42.93 24.20 4.51
Total 100.7 22.9 403.5 8.90 41.63 9.92 2.40
2015
United States 45.1 19.7 160.6 $ 8.81 $ 45.71 $ 9.72 $ 2.38
Canada 5.8 2.2 100.3 13.46 42.33 5.52 2.41
Egypt(2) 33.1 0.4 134.8 10.11 50.97 30.97 2.91
North Sea 21.7 0.4 23.7 13.74 51.26 26.53 6.73
Total 105.7 22.7 419.4 10.40 48.31 9.98 2.80
(1) During the third quarter of 2017, Apache completed the sale
of its Canadian operations.
(2) Includes production volumes attributable to a one-third
noncontrolling interest in Egypt.
(3) Sales volumes from the North Sea for 2017 and 2016 were
21.2 MMboe and 24.5 MMboe, respectively. Sales volumes may
vary from production volumes as a result of the timing of
liftings in the Beryl field.
99. Gross and Net Undeveloped and Developed Acreage
The following table sets out Apache’s gross and net acreage
position as of December 31, 2017, in each country where the
Company has operations:
Undeveloped Acreage Developed Acreage
Gross Acres Net Acres Gross Acres Net Acres
(in thousands)
United States 4,734 2,341 1,935 1,095
Egypt 3,842 3,450 1,756 1,655
North Sea 209 118 153 117
Other International 2,308 1,831 — —
Total 11,093 7,740 3,844 2,867
As of December 31, 2017, 39 percent of U.S. net undeveloped
acreage was held by production.
As of December 31, 2017, Apache had 608,000 net undeveloped
acres scheduled to expire by year-end 2018 if production is not
established or Apache takes no
other action to extend the terms. Additionally, Apache has
806,000 and 2.1 million net undeveloped acres set to expire in
2019 and 2020, respectively. The Company
strives to extend the terms of many of these licenses
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100. and concession areas through operational or administrative
actions, but cannot assure that such extensions can be achieved
on an economic basis or otherwise on
terms agreeable to both the Company and third parties,
including governments.
Exploration concessions in Apache’s Egypt region comprise a
significant portion of Apache’s net undeveloped acreage
expiring over the next three years.
Apache has 354,000 net undeveloped acres expiring in Egypt
during 2018. Approximately 615,000 and 118,000 net
undeveloped acres are set to expire in 2019 and
2020, respectively. There were no reserves recorded on this
undeveloped acreage. Apache will continue to pursue acreage
extensions and access to new concessions
in areas in which it believes exploration opportunities exist.
During 2017, Apache received final approval of the NW Razzak
and South Alam El Shawish concession
blocks. Combined, the two concessions added approximately 1.6
million net undeveloped acres in Egypt.
Additionally, Apache has exploration interests in Suriname
consisting of 1.8 million net undeveloped acres in two offshore
blocks. Apache has acquired 3-D
seismic surveys over all the acreage. No reserves have been
booked on this undeveloped acreage.
Estimated Proved Reserves and Future Net Cash Flows
Proved oil and gas reserves are those quantities of natural gas,
crude oil, condensate, and NGLs, which by analysis of
geoscience and engineering data, can be
estimated with reasonable certainty to be economically
producible from a given date forward, from known reservoirs,
101. and under existing economic conditions,
operating methods, and government regulations. Estimated
proved developed oil and gas reserves can be expected to be
recovered through existing wells with
existing equipment and operating methods. The Company
reports all estimated proved reserves held under production-
sharing arrangements utilizing the “economic
interest” method, which excludes the host country’s share of
reserves.
Estimated reserves that can be produced economically through
application of improved recovery techniques are included in the
“proved” classification when
successful testing by a pilot project or the operation of an
active, improved recovery program using reliable technology
establishes the reasonable certainty for the
engineering analysis on which the project or program is based.
Economically producible means a resource that generates
revenue that exceeds, or is reasonably
expected to exceed, the costs of the operation. Reasonable
certainty means a high degree of confidence that the quantities
will be recovered. Reliable technology is a
grouping of one or more technologies (including computational
methods) that has been field-tested and has been demonstrated
to provide reasonably certain results
with consistency and repeatability in the formation being
evaluated or in an analogous formation. In estimating its proved
reserves, Apache uses several different
traditional methods that can be classified in three general
categories: (1) performance-based methods; (2) volumetric-
based methods; and (3) analogy with similar
properties. Apache will, at times, utilize additional technical
analysis, such as computer reservoir models, petrophysical
techniques, and proprietary 3-D seismic
interpretation methods, to provide additional support for more
complex reservoirs. Information from this additional analysis is
102. combined with traditional methods
outlined above to enhance the certainty of the Company’s
reserve estimates.
Proved undeveloped reserves include those reserves that are
expected to be recovered from new wells on undrilled acreage,
or from existing wells where a
relatively major expenditure is required for recompletion.
Undeveloped reserves may be classified as proved reserves on
undrilled acreage directly offsetting
development areas that are reasonably certain of production
when drilled, or where reliable technology provides reasonable
certainty of economic producibility.
Undrilled locations may be classified as having undeveloped
reserves only if a development plan has been adopted indicating
that they are scheduled to be drilled
within five years, unless specific circumstances justify a longer
time period.
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The following table shows proved oil, NGL, and gas reserves as
of December 31, 2017, based on average commodity prices in
effect on the first day of each
month in 2017, held flat for the life of the production, except
where future oil and gas sales are covered by physical contract
terms. This table shows reserves on a boe
basis in which natural gas is converted to an equivalent barrel