Assignment 6 - EF, Energy Finance Exam 2, Energy Finance exam 2, FIN 4363 Energy FIN (FINAL), Energy Finance Final Exam, Energy Ratios exam 2, Energy Finance Exam 2, Energy Finance Exam 2 Part 1, Energy Finance exam 2, Energy Finance Exam 1 Joe Byers...

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Which of the following reasons is NOT a reason as to why sensitivity analysis is useful?

Gives probabilities of various possible outcomes

Which of the following reasons is not a reason as to why sensitivity analysis is useful?

Gives probabilities of various possible outcomes

Which of the following reasons is not a reason as to why sensitivity analysis is useful? -Gives some idea of stand-alone risk. -Helps identify dangerous variables. -Gives some breakeven information -Gives probabilities of various possible outcomes -All of the above are advantages of sensitivity analysis.

Gives probabilities of various possible outcomes

You just purchased food at WalMart and they gave you a plastic bag with your goods. This plastic bag is most likely made from which of the following plastics? (Hint: This question is from the Petrochemicals lecture.) Polyvinyl chloride (PVC) Low-density polyethylene (LDPE) High-density polyethylene (HDPE) Polyethylene terephthalate (PETE) SAP

High-density polyethylene (HDPE)

Compared to flow batteries, which of the following properties are advantages of the lithium-ion chemicals? Note: This question is from the reading, " Heir to the Throne: Will Lithium Seize the Storage Crown?", NextEra Energyinsight, Oct. 02, 2019. Larger grid-connected scale. Higher efficiency and lower capital costs. A longer useful life More cost-effective on the overall level. Degrade more slowly than flow batteries.

Higher efficiency and lower capital costs. More cost-effective on the overall level.

The current oil price collapse is comparable to the collapses in 2008-09 and in 1997-98 financial crises. What are the two reasons that make the current collapse worse than the previous two?

Higher than expected supply growth and no help from OPEC as a defender of oil price

The current oil price collapse is comparable to the collapses in 2008-09 and in 1997-98 financial crises. What are the two reasons that make the current collapse worse than the previous two?

Higher than expected supply growth and no help from OPEC as a defender of oil price.

19,000

Using the image provided about U.S. Energy Consumption in 2018, answer the following question: What percentage of total U.S. energy consumption is provided from the following renewable energy sources - solar and wind?

3.4%

According to the article "Bernstein Energy & Power: The EVs are coming! The EVs are coming!," under the bullish case, how much new natural gas demand is projected to be needed in 2040 to generate additional electrical power versus today?

4 bcfd

Calculate ConocoPhillips 2013 Finding Cost Ratio for Total Consolidated Operations using the provided 10K report.

4.65/BOE

According to the article "Bernstein Energy & Power: The EVs are coming! The EVs are coming!," by 2040, what percentage of U.S. electricity will be generated by natural gas?

40%

According to the article "Bernstein Energy & Power: The EVs are coming! The EVs are coming!," by 2040, what percentage of U.S. electricity will be generated by natural gas? 40% 34% 50% 25% 10%

40%

1 barrel of oil equivalent (BOE) equals how many thousand cubic feet of natural gas (mcf)?

What are the total DD&A expenses during 2015 for a company using full cost accounting

6,069,767

According to the U.S. Wind Industry Annual Market Report 2017, published by the American Wind Energy Association (AWEA), wind energy generated approximately ___ of U.S. electricity in 2017. 6.3% <1% 10.2% 8.5% No of these are correct.

6.3%

Williams Companies Inc is considering a natural gas project which has the following cash flows. The cost of capital is 10%. What is the NPV of the project?

$260

Williams Companies Inc is considering a natural gas project which has the following cash flows. The cost of capital is 10%. What is the NPV of the project? Year Project Cash Flows 0 -$1,000 1 400 2 300 3 500 4 400

$260

Calculate the NYMEX 3-2-1 Crackspread using the following information. WTI crude oil is trading for $98.50 per barrel. Gasoline is trading for $2.98 per gallon. Heating oil is trading for $3.10 per gallon. The NYMEX 3-2-1 crackspread is, on a per barrel basis:

$28.34 per barrel

WTI crude oil is trading for $98.50 per barrel. Gasoline is trading for $2.98 per gallon. Heating oil is trading for $3.10 per gallon. The NYMEX 3-2-1 crackspread is, on a per barrel basis

$28.34 per barrel

(a) Calculate the Reserve Replacement Cost Ratio for COP in 2014. Exclude equity affiliates. List the answer in $ per barrel and show to two decimal places (i.e., $15.46 per barrel). (b) Based on the peer firm ratios (XOM = $14.51, CVX = $29.02, BP = $28.48, and RDS = $14.81), this value for COP is considered good, average, or below average?

$38.00 per barrel; this ratio is below average. Ideally the ratio should be as low as possible.

What value per share do you obtain for Burlington Resources

$38.80 per share

How much gas did Bowker believe was in each square mile of the Barnett shale?

185 billion cubic feet of gas

Date of first artificial frack

1857

Date of first commercial oil well drilled

1859

What year did Colonel Edwin L. Drake drill the first productive oil well in the U.S.

1859

What year did Colonel Edwin L. Drake drill the first productive oil well in the U.S. (also considered the first in the world).

1859

What year did J.D. Rockefeller form Standard Oil?

1877

Important dates in history...

1825- first natural gas well drilled in the US (Fredonia, NY) 1857- first staged artificial fracturing 1859- first commercial oil well drilled in the US in Titusville, PA.

According to the lecture when did coal overtake wood as the primary fuel source in the United States?

1880

According to the lecture, when did coal overtake wood as the primary fuel source in the United States?

1880

What is the name of the pattern we observe in the natural gas forward curve? (Hint: I describe this in my Powerpoint lecture on Introduction to Risk Management.)

Head and shoulders pattern

T/F: What part of the value chain performed best from the spin-offs by ConocoPhillips, Williams, and Marathon?

False

The Us can now export crude oil as of January 2016, the first time in the last 40 years...

False

The cost of reserves acquisition for the entire period of 2010-2014 was higher than the cost to find and develop reserves.

False

The higher the rock permeability, the more difficult for reservoir fluids to flow.

False

The nuclei of certain light elements can split, releasing a lot of energy.

False

The nuclei of certain light elements can split, releasing a lot of energy. True or False

False

The water used in their old formula had gummed up fractures in the rock, preventing natural gas from flowing.

False

True/False In OECD countries, consumption has recovered to a level equal to that prior to the recession in 2008. (From Ch. 3 Energy Economics and updated class lecture)

False

Under Success Effort accounting system, the development drilling cost of a dry well will be expensed , not capitalized.

False

Under Successful Effort accounting system, the cost of drilling a dry exploration well will be capitalized

False

We are traveling faster cheaper and safer than before, but air quality has declined.

False

We are traveling faster cheaper and safer than before, but air quality has declined. Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper".

False

Growth in world oil consumption is expected to be concentrated in OECD countries.

False (The growth is in ***non-OECD countries such as China, India, and the Middle East, etc)

Standard cost-of-carry models do a good job of characterizing energy forward curves. True or False?

False - on test

You just purchased food at WalMart and they gave you a plastic bag with your goods. This plastic bag is most likely made from which of the following plastics?

High-density polyethylene (HDPE)

_____ relates the value of an asset to the present value of expected future cashflows on that asset.

Fundamental valuation

From the API reading. Between 1990 and 2015, natural gas systems' methane emissions have ____ by ____ even though natural gas production rose by more than 50%.

fallen; 16.3%

A market is said to be "liquid" when it has a low level of trading activity and open interest

false

Which contract is most successful - natural gas futures or electricity futures?

natural gas futures

Which contract is the most successful -- natural gas futures or electricity futures?

natural gas futures

What does wet gas refer to?

natural gas with a high natural gas liquid content.

Which of the followings is not correct about Intel?

Intel was able to produce 2,300 billion transistors in 2011

How is refining doing...?

Less refineries, more capacity because the less efficient refineries are being shut down/replaced.

In the 12th century, sellers at medieval trade fairs signed contracts promising future delivery of the item sold - what is the name of these contracts?

Lettres de faire

Which type of accounting method (between SE and FC) is considered more conservative?

successful efforts

Petroleum derivatives include contracts on crude oil, with ____ crude by far being the most dominant.

sweet

Price Risk

the risk of loss from changes in market price

Calculate the 2014 Reserve Life Index (for crude oil only, EQUITY AFFILIATES)

Not 12.12 (find right answer)

For ConocoPhillips (COP): Calculate the 2014 Production Ratio (for TOTAL PROVED RESERVES, Consolidated operations)

Not 8.25% (find right answer)

What are Mercaptans?

Odorous material added to natural gas

What are Mercaptans? Methane composites added to natural gas Odorous material added to natural gas Mercury capsules Mermaid captains

Odorous material added to natural gas

In the ConocoPhillips Natural Gas Project, which of the following best summarizes the risks of the project?

Overall, the two greatest risks in this business area are first - price, and second - quantity.

P90

Fill in the bank: How do you get the SPCIQ Template Guides (in Excel)? Fill in the following series: Templates > ______________ > SPCIQ Template Guides

SPCIQ Excel Plug-In Tools

The landman profession is uniquely American. That's because the United States is among the few countries in which citizens, rather than the government, own the mineral rights under their own properties.

TRUE

Who caused the downturn of the oil industry that lasted almost ten years?

The Saudi oil minister

Why would a company NOT choose the MLP structure?

The company is unable to provide steady cash flows.

In the Energy Value Chain lecture videos, what was said about Hurricane Harvey as to its impact on the markets?

The crack spread increased rapidly

Oil Drilling, Inc was the name of the company Mitchell brothers opened with the third partner in downtown Houston in 1946. (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46.)

True

One of the disadvantages of the payback period is that it ignores cash flows occurring after the payback period.

True

Other things held constant, an increase in the cost of capital discount rate will result in a decrease in a project's NPV.

True

Patrick Moore, the Co-founder of Greenpeace, and many other believed that nuclear generation is the best and most readily available choice for preventing rapid and possibly catastrophic global warming. This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. True or False

True

Rapid urbanization coupled with population growth has led to rising energy demand at the municipal level. Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. True False

True

Risk analysis in capital budgeting is usually based on subjective judgments.

True

Risk analysis in capital budgeting is usually based on subjective judgments. (Hint: This question is from the Capital Budgeting and Risk Analysis in the Oil and Gas Industry lecture.)

True

Scientists predict the sun will turn into a red giant in approximately 5-6 billion years. True False

True

Sugar cane yield of ethanol is much more than corn derived ethanol This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" True False

True

Sweet crude has less than 1% sulfur content and sour crudes have greater than 1% sulfur

True

Sweet crude has less than 1% sulfur content and sour crudes have greater than 1% sulfur. This statement is:

True

In the syllabus lecture and about me, Dr. Simkins explained why she is referred to as an "Ex Con". What is the reason?

This is a name given to people who worked for Conoco in the past. She worked for them too.

T/F: Based on historical data, natural gas prices are more volatile than crude oil prices. This is, natural gas prices have a higher standard deviation than crude oil prices

True

T/F: In competitive energy markets, mean reversion is a useful model in which prices are expected to revert towards the long term mean (also used in interest rate modeling).

True

T/F: The two major futures exchanges in the world are the NYMEX and ICE Futures

True

T/F:Risk analysis in capital budgeting is usually based on subjective judgements?

True

The MIRR is similar to the IRR, but is theoretically superior in that it overcomes two weaknesses of the IRR. The MIRR correctly assumes reinvestment at the project's cost of capital and avoids the problem of multiple IRRs.

True

The NPV method's assumption that cash inflows are reinvested at the cost of capital is more reasonable than the IRR's assumption that cash flows are reinvested at the IRR. This makes the NPV method preferable to the IRR method.

True

The US can now export crude oil as of January 2016, the first time in the last 40 years. This statement is:

True

What is the overall and primary goal of the Energy Value Chain?

To make money

What is the primary goal of the conversion process in Refining?

To produce gasoline

The US can now export crude oil as of January 2016, the first time in the last 40 years. This statement is: True False

True

The US can now export crude oil as of January 2016, the first time in the last 40 years. This statement is: True False

True

The law in Oklahoma was such that a land owner could either lease his land to those wishing to produce oil or gas on it, or drill acreage himself

True

The quintupling of world oil prices in 1973-1974 had a decidedly negative effect on nuclear fortunes. This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. True or False

True

The refining industry and petrochemical industry are cyclical industries.

True

The two major futures exchanges in the world are the NYMEX and ICE Futures (Formerly, IPE)

True

The two major futures exchanges in the world are the NYMEX and ICE Futures (formerly IPE). True or False?

True

The two major futures exchanges in the world are the NYMEX and ICE Futures (formerly, IPE

True

The two major futures exchanges in the world are the NYMEX and ICE Futures (formerly, IPE).

True

Three Gorges Dam is the world's largest power station in terms of installed capacity (22,500 MW)

True

A valuation in Relative Valuation, we realize that all valuations will have a bias. So relative valution is not an objective search for the "true" value. (Note: From the relative valuation lecture.)

True

According to the lecture video/notes, the introduction of leaded gasoline was one of the events that made crop-derived ethanol uneconomical. True False

True

According to the result from the Recoverability Test, currently there is NO impairment for Field B

True

According to the video lecture/notes, ethanol-powered transportation requires more nitrogen fertilizers and generates higher emissions of nitrous oxide, which is a more powerful greenhouse gas than carbon dioxide. True False

True

An important disadvantage of solar power is that batteries to store electricity generated by solar cells are expensive. True False

True

Based on historical data, natural gas prices are more volatile than crude oil prices. This is, natural gas prices have a higher standard deviation than crude oil prices. This statement is:

True

Cities mean density. Density means prosperity and innovation.

True

Cities mean density. Density means prosperity and innovation. True False

True

Commodity chemical prices are more cyclical than specialty chemical prices.

True

Denser means Lighter. Lighter means Faster.

True

Denser means Lighter. Lighter means Faster. Note: This question comes from pages 67-170 of the book, "Smaller Faster Lighter Denser Cheaper". True False

True

Deregulation of natgas during the 1980s laid the foundation for natural gas futures trading. T/F?

True

Deregulation of natgas during the 1980s laid the foundation for natural gas futures trading. True or False

True

Deregulation of natgas during the 1980s laid the foundation for natural gas futures trading. True or False?

True

George Mitchell knew all about the gloomy history of various regions of the country, and about how disappointing shale and other unconventional rock had been. (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

True

In 1973, crude oil prices quadruple in just four months (from $2.90 to $11.65 per barrel).

True

In 1973, crude oil prices quadruple in just four months (from $2.90 to $11.65 per barrel). T/F

True

In competitive energy markets, mean reversion is a usefule model in which prices are expected to revert towards the long term mean

True

In competitive energy markets, mean reversion is a usefule model in which prices are expected to revert towards the long term mean (also used in interest rate modeling).

True

In conventional oil reservoir, oil is stored in the porous space inside the reservoir rock

True

In petroleum industry, a cap or seal rock is known as an impermeable layer of rock that had prevented the hydrocarbons from escaping to the surface

True

LPG is the abbreviation of Liquefied Petroleum Gas

True

Laundry detergent is a petroleum product.

True

Laundry detergent is a petroleum product. This question comes from the lecture on Energy Economics. True False

True

More oil wells have been drilled in the United States than anywhere else in the world. Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". True False

True

NGLs is called Natural Gas Liquids

True

Now Norway is Europe's biggest producer of hydropower, and number six in the world

True

In evaluating project risks in the energy industry, which of the risks listed below is considered an "intangible risk", and is not a "tangible risk"?

Weather

In evaluating project risks, which of the risks listed below is considered an "intangible risk", and is not a "tangible risk"?

Weather

Which of the risks listen below is considered an "intangible risk"? -Commodity Price Risk -Reservoir risk -Credit risk -Inflation -Weather

Weather

What are intangible Risks?

Weather Acts of God Legal Political Engineering/Project Risk

Name Intangible risks:

Weather Engineering/Project risk Acts of God Legal Political

What is Steinsberger referring to when he said" They started slowly, but they kept on going".

Wells that relied on his new watery fracking fluid

Benchmark crude oil in the US and location...

West Texas Intermediate

What are the two leading global benchmark crude oils, including the location of the crude oil.

West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK)

What are the two leading global benchmark crude oils, including the location of the crude oil?

West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK)

What are the two dominant crude oil futures contracts?

West Texas Intermediate traded on NYMEX and Brent traded on ICE Futures

There are two dominant crude oil futures contract: _______ and _______

West Texas Intermediate traded on the NYMEX and Brent traded on ICE Futures

There are two dominant crude oil futures contract: _________________ and _______________.

West Texas Intermediate traded on the NYMEX and Brent traded on ICE Futures

There are two dominant crude oil futures contracts: ___________ and ____________.

West Texas Intermediate traded on the NYMEX and Brent traded on ICE Futures - on test

There are two dominant crude oil futures contract: _________________ and _______________.

West Texas Light traded on the NYMEX and Brent traded on ICE Futures

What provided most of the US energy needs in the early 1800s? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. Petroleum Coal Wood None of these Natural gas

Wood

If a wind turbine has been able to generate 2.6 MW of power for 9.5 hours a day, it would have produced energy of a)______MWh, which is equal to b) _____Megajoules

a) 24.7; b) 88,290

Which of the following types of costs must be disclosed annually, regardless of whether the costs are capitalized or charged to expense when incurred.

all of above

Why has propane usage remained strong in the residential sector while heating oil usage has declined?

all of the above

Consumption amongst non-OECD countries can be described how over the recent 15 years?

an almost linear trend upward

Consumption amongst non-OECD countries can be described how over the recent 15 years? (From Ch. 3 Energy Economics)

an almost linear trend upward

Consumption amongst non-OECD countries can be described how over the recent 17 years?

an almost linear trend upward

Consumption in non-OECD countries has changed in what way over the past 15 years? (From Ch. 3 Energy Economics)

an almost linear trend upward

Which of the following is NOT true about Cushing Oklahoma At any one time it holds 5-10% of the US oil inventory Produces around 400,000 barrels of oil a day The Japanese wanted to bomb it during WWII It has around 1,000 prison inmates

b. Produces around 400,000 barrels of oil a day

_______ is a market situation where prices are progressively lower in distance delivery months

backwardation

Who is Michael Rothman? What is Rothman's opinion on the global oil market and why?

Michael Rothman, commodities analyst, is optimistic about the oil market future, because he believes that the oil demand will grow and causes Brent crude benchmark to hit higher by year's end.

Who is Michael Rothman? What is Rothman's opinion on the global oil market and why? This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

Michael Rothman, commodities analyst, is optimistic about the oil market future, because he believes that the oil demand will grow and causes Brent crude benchmark to hit higher by year's end.

the quadrillion btus

15 zeros

By the 1930s, there were __________ commercial makers of electric automobiles in the U.S.

According to the API reading (Powering Past Impossible), since 2010 a 1% rise in global GDP has typically generated a ____ % increase in energy demand. Choose the best answer.

0.6%

6 mcf of gas = how many barrel of oil equivalent (BOE)?

Solar power accounts for approximately _____ percent of global electrical generation. 1 5 10 20 None of these are correct.

Quadrillion is...

15 zeros. 35 quadrillion=35,000,000,000,000,000

Oil prices reached how many $ per barrel as the highest ever, in 2008? Do not include $ in your answer.

150

Calculate ConocoPhillips 2013 Finding and Development Reserve Replacement Ratio for Total Consolidated Operations.

152.6%

Aaron McIntire Inc., a large alternative energy firm operating out of Valdez, Alaska, has a new energy project it is considering. The project has a cost of $275,000 and is expected to provide after-tax annual cash flows of $73,306 for eight years. The firm's management is uncomfortable with the IRR reinvestment assumption and prefers the modified IRR approach. You have calculated a cost of capital for the firm of 12 percent. What is the project's MIRR?

16.0%

What was the power density of French and Shreve's high-pressure steam engine powered boat in 1816?

16.4 watts per kilogram

What was the power density of French and Shreve's high-pressure steam engine powered boat in 1816? 16.4 watts per kilogram 16.7 watts per kilogram 9.8 watts per kilogram 6.7 watts per kilogram 19.8 watts per kilogram

16.4 watts per kilogram

In what year was the NYMEX Henry Hub natural gas futures contract launched?

1990

In what year was the NYMEX Henry Hub natural gas futures contract launched?

1990 - on test

Cowboy Oil Company (COC): The company has purchased $4,500,000 worth of equipment that required $500,000 in shipping and installation costs. In addition, the firm's accounts receivable and inventories increased by $1,000,000 and its spontaneous liabilities increased by $600,000. COC's net annual sales revenue is expected to be $8,500,000 at the end of each of the next four years, and total operating costs (fixed and variable costs excluding depreciation) will be $5,300,000. Assume that the firm uses the straight-line depreciation method to depreciate the equipment and the firm's tax rate is 40%. The equipment is expected to have a salvage value of $800,000 at the end of the project's life in four years, and the firm expects all of its investment in net working capital (NWC) to be returned. If its required rate of return is 12%, what is the project's net present value (NPV)?

2,509,641

If its required rate of return is 12%, what is the project's net present value (NPV)?

2,509,641

If Cowboy Energy Company had a total of 17,600,000 mcf (thousand cubic feet) of proven natural gas in 2011, how much is this in BOE?

2,933,333 BOE

What will be the area required to supply 9 PWh of electricity by wind turbines with an average power density 2 W/m2 ?(This question can be answered by reading Chapter 7: Electricity from Wind and listening to the lecture over the chapter.) 1 million Km2 1.5 million Km2 1.7 million Km2 2.0 million Km2 2.2 million Km2

2.0 million Km2

If we have 3 one-hundred watt light bulbs and they run for 8 hours, how much energy do they use in kWh?

2.4

Calculate the frac spread and explain how it is an important profitability measure for firms operating in midstream (such as MLPs that operate in fractionation of NGLs). [Hint: This is from my lecture in Unit 6 about MLPs. I also have a worksheet on calculating this that has more details.] Step 1: Calc NGL value Prices ($/Gal) Conversion Factor (mmBtu/Gal) $/mmBtu Composition (note 1) Value of NGL ($/mmbtu) Ethane (C2) $ 0.1832 0.0664 40.0% Propane (C3) $ 0.4680 0.0916 35.0% Isobutane (C4) $ 0.5572 0.0997 5.0% Normal butane (NC4) $ 0.5392 0.1037 8.0% Natural Gasoline (C5+) $ 0.8602 0.1122 12.0% Total NGL Step 2: HH natgas price $ 1.90 Step 3: Frac Spread

2.61

What are the three principal feedstocks for the chemical industry. (I do not mean the base petrochemicals. I am asking about the feedstocks into the chemical industry

Naptha, natural gas, and natural gas liquids

What are the three principal feedstocks for the chemical industry. (I do not mean the base petrochemicals. I am asking about the feedstocks into the chemical industry.)

Naptha, natural gas, and natural gas liquids

What are the three principal feedstocks for the chemical industry. (I do not mean the base petrochemicals. I am asking about the feedstocks into the chemical industry.) Naptha, natural gas, and natural gas liquids Heating oil, ethylene, and naptha olefins and aromatics. Propylene, natural gas liquids, and coal None of these are correct.

Naptha, natural gas, and natural gas liquids

Who owns the majority of hydrocarbon assets in the world? This is from the API reading.

National Governments

Who owns the majority of hydrocarbon assets in the world? This question is from the Unit 1 lectures.

National Governments

"This is the fuel of the future, it will be in demand. Everything will change." What was the fuel Aubrey McClendon was referring to in this statement?

Natural Gas

Because of globalization in markets, which energy market could more than double by 2040? Wind Solar energy Hydroelectric Natural Gas Geothermal

Natural Gas

From the API reading: Because of globalization in markets, which energy market could more than double by 2040?

Natural Gas

Which commodity has the highest volatility that is described in Chapter 15

Natural Gas

Which commodity has the highest volatility that is described in Chapter 15 (and I also mentioned in class)?

Natural gas

Which commodity has the highest volatility?

Natural gas

Which energy product is costly to transport relative to value?

Natural gas

Which commodity has the highest volatility that is described in Chapter 15 (and I also mentioned in class)?

Natural gas - on test

Which contract is the most successful - natural gas futures or electricity futures?

Natural gas futures

Which contract is the most successful -- natural gas futures or electricity futures?

Natural gas futures

What is used to measure the complexity of a refinery?

Nelson complexity index

What is the foremost consideration for any energy source? This question is from Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Energy Gain Net Energy Output Energy Balance Energy Productivity Net Energy Return

Net Energy Return

Risk Analysis in capital budgeting is based on what?

Subjective Judgements

Which of the followings is not true about cities and countries?

Suburban areas are green because each suburban resident generally requires less concrete, steel, glass, gasoline than their city counterparts.

Which of the followings is not true about cities and countries? Suburban areas are green because each suburban resident generally requires less concrete, steel, glass, gasoline than their city counterparts. A city with 50 times the population of a small town is 130 times more innovative. World Bank data shows that highly urbanized countries are, on average, richer than their less urbanized counterparts. Cities offer higher incomes, better restaurants and more culture. Cities are targets for terrorism.

Suburban areas are green because each suburban resident generally requires less concrete, steel, glass, gasoline than their city counterparts.

Which type of accounting method (between SE and FC) is considered more conservative?

Successful Efforts

Which type of accounting method (between Successful Efforts and Full Cost) is considered more conservative?

Successful efforts

Suncor

Which one of the companies operate large excavators in sprawling, opencast mines in Alberta oil sands and use the world's largest off-road trucks to take the sand to extraction plants, after which the liquid goes to upgrading facilities that convert it to light, low-sulfer crude oil. This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. Chesapeake Energy Suncor ExxonMobil Devon Energy ConocoPhilips

Suncor

Sweet/sour & API gravity...

Sweet less than 1% sulfur Sour more than 1% sulfur Light greater than 30 API Intermediate 22-30 Heavy less than 22

Where is the Australian Securities Exchange?

Sydney, AU

Finding and Development (F&D) Reserve Replacement Ratio =

(Extensions and Discoveries + Improved Recovery + Reserve Revisions)/Production

Production Replacement Ratio =

(Increase in Reserves + Production)/Production

Name tangible risks:

Commodity risk Construction Risk Credit Risk Financial and Insurance Inflation Reservoir

If MCC has earnings of $250 million, what total equity value do you estimate for the MCC, using the average for the comparables?

$ 3.57 billion

What will be the DD&A rate per barrel for a company that uses full cost accounting

$26.98/BOE

Lewis Strauss statement on electrical energy should obviously not be taken literally, as even "free" electricity would have to be transformed, transmitted, and distributed to users, requiring the construction and maintenance of an extensive and costly infrastructure? This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. "Too cheap to meter" "Too low volt to meter" "Too high volt to meter" "Too cheap to generate" "Too expensive to meter"

"Too cheap to meter"

The following comprises the results of exploration efforts for an accounting year. These calculations help us understand why it is important to know the difference between successful efforts and full cost accounting. Exploration Wells Drilled Drilling Costs ($000) Results 5 $10,000 10 MM Barrel discovery 2 $5,000 8 MM Barrel discovery 4 $7,000 Plugged and Abandoned 3 $6,000 7 MM Barrel discovery 7 $12,000 Plugged and Abandoned Total = 21 wells Total = $40,000 Under full cost accounting, how much of the exploratory wells cost will be expensed?

$0. All of the costs are capitalized.

What is the minimum price fluctuation per contract?

$10

The following comprises the results of exploration efforts for an accounting year. These calculations help us understand why it is important to know the difference between successful efforts and full cost accounting. Exploration Wells Drilled Drilling Costs ($000) Results 5 $10,000 10 MM Barrel discovery 2 $5,000 8 MM Barrel discovery 4 $7,000 Plugged and Abandoned 3 $6,000 7 MM Barrel discovery 7 $12,000 Plugged and Abandoned Total = 21 wells Total = $40,000 How much will the SE company's assets increase from the drilling program above?

$10,000 + $5,000 + $6,000 = $21,000 (the successful wells)

(a) Calculate the Finding Cost Ratio for COP in 2014. Exclude equity affiliates. List the answer in $ per barrel and show to two decimal places (i.e., $15.46 per barrel). (b) Based on the peer firm ratios (XOM=$3.45, CVX=$7.88, RDS=$7.60), this value for COP is considered good, average, or below average?

$10.57 per barrel; this ratio is below average compared to the comps in Ch. 9 given with this problem.

Gaylen Howe Oil Financing has a proposed project that has an initial investment of $277,000. The required rate of return is 8 percent. Cash flows at the end of years 1, 2, & 3 are $100,000, $200,000, and $150,000, respectively. What is the NPV of this project?

$106,136

Calculate the NYMEX 3-2-1 Crackspread using the following information. Suppose WTI crude oil is trading for $40.00 per barrel. Gasoline is trading for $1.28 per gallon. Heating oil is trading for $1.16 per gallon. The Crack Spread of processing this crude oil is

$12.08 per barrel

(a) Calculate the Lifting Cost Ratio for COP in 2013. Exclude equity affiliates. List the answer in $ per barrel and show to two decimal places (i.e., $15.46 per barrel). Remember -- this is for 2013. (b) Based on the industry average of $9.50 per barrel, this value for COP is considered good, average, or below average?

$13.39 per barrel; this ratio is below average because COP is higher than the industry average (and costs are desired to be lower).

What is the highest price crude oil futures have ever reached?

$145.29

Calculate the value of proven reserve additions for COP in 2014. Exclude equity affiliates. List the answer in $ per barrel and show to two decimal places (i.e., $15.46 per barrel).

$19.27 per BOE

If Devon's finding cost is $3.45 per mcf, how much is the finding cost in $ per BOE? (Recall that 6mce = BOE)

$20.70 per BOE

What is the 2015 DD&A rate per boe for the woodford field if the company uses successful efforts accounting

$20/BOE

If Chesapeake's finding cost is $3.50 per mcf, what is this in $ per barrel?

$21.00 per BOE

This question requires you to use CapitalIQ. Once you are logged into CapitalIQ, you will need to select ConocoPhillips as the company by entering it in the Search box at the top. Then using the left hand menu, select "Industry Specific" under the category "Financials/Valuation". Here you will see ConocoPhillips disclosures for oil, natural gas, etc. Use the year 12/31/2017 and answer the following questions: What is the "Avg. Price/mcf, Gas (Hedged)" as shown in Capital IQ? This is shown under "Prices and Production"? This is the average price that ConocoPhillips receives for their natural gas including any hedges in $/mcf ($/thousand cubic feet).

$4.07

What is the "Avg. Price/mcf, Gas (Hedged)" as shown in Capital IQ? This is shown under "Prices and Production"?

$4.07

The following comprises the results of exploration efforts for an accounting year. These calculations help us understand why it is important to know the difference between successful efforts and full cost accounting. Exploration Wells Drilled Drilling Costs ($000) Results 5 $10,000 10 MM Barrel discovery 2 $5,000 8 MM Barrel discovery 4 $7,000 Plugged and Abandoned 3 $6,000 7 MM Barrel discovery 7 $12,000 Plugged and Abandoned Total = 21 wells Total = $40,000 How much will the FC company's assets increase from the drilling program above?

$40,000. All of the drilling costs because all are capitalized.

What value per share do you obtain for Burlington Resources?

$40.40 per share

WHAT ARE THE TOTAL EXPENSES DURING 2015 FOR A COMPANY USING FULL COST ACCOUNTING? ASSUME THAT PRODUCTION IS 225,000 BOE FOR THE YEAR. The DDA rate per BOE for the full cost accounting company is $25.116 per barrell. Multiply by the 225,000 production and this results in this answer.

$5,651,163 in total DDA charges for the barrels produced.

What is the Frac Spread for the calculation at the end of the Frac Spread Tutorial handout? See the frac spread tutorial as part of the Midstream lecture in week 4. The problem is on page 2 and this is for the Pop Quiz calculation at the VERY END of this file).

$5.58

According to the lecture note, the world's first operational deep-water large capacity floating wind turbine is installed in the North Sea off Norway. It costs______________ to build and deploy.

$62 million

The following comprises the results of exploration efforts for an accounting year. These calculations help us understand why it is important to know the difference between successful efforts and full cost accounting. Exploration Wells Drilled Drilling Costs ($000) Results 5 $10,000 10 MM Barrel discovery 2 $5,000 8 MM Barrel discovery 4 $7,000 Plugged and Abandoned 3 $6,000 7 MM Barrel discovery 7 $12,000 Plugged and Abandoned Total = 21 wells Total = $40,000 Under successful efforts accounting, how much of the exploratory wells cost will be expensed?

$7,000 + $12,000 = $19,000

What was the net worth of George Mitchell when the shares of Mitchell Energy hit twenty-seven dollars? (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

$700 million

Calculate the NYMEX 3-2-1 spread. Suppose the nearby NYMEX crude futures settled at $43.00 per Bbl, gasoline settled at $1.28/gal and heating oil settled at $1.16/ gal. The crack spread is per barrel

$9.08

Calculate the NYMEX 3-2-1 spread. Suppose the nearby NYMEX crude futures settled at $43.00 per Bbl, gasoline settled at $1.28/gal and heating oil settled at $1.16/ gal. The crack spread is per barrel

$9.08 per barrel

Calculate the NYMEX 3-2-1 spread. Suppose the nearby NYMEX crude futures settled at $43.00 per Bbl, gasoline settled at $1.28/gal and heating oil settled at $1.16/ gal. The crack spread is per barrel:

$9.08 per barrel

Can you calculate the frac spread..?

(Price)/(Conversion Factor)= $/mmBtu (mmBtu)*(Composition)= Value of NGL Add all Values of NGL's to get Total. (Total)-(HH natgas price)= FRAC SPREAD

(Assignment 2) Under successful efforts accounting, how much of the exploratory wells cost will be expensed?

(Q16 *Look at chart ) The drilling costs of $7,000 and $12,000 will be expensed since they were unsuccessful. This totals to $19,000

Can you calculate the refining margin...?

(Value of Products)-(Cost of Crude)-(Cost of Refining)= REFINING MARGIN Revenues - Expenses Yield% * Value$ = (Refined values) Ex. 10%*$45=$4.50 Add all (Refined Values) and subtract the (Cost of Crude) and (Refining Cost)... Ex. $55.25-$50.00-$4= $1.25 =Profit per barrel/Refining Margin

Which of the following are advantages of MLPs?

- Due to lack of corporate level income tax, MLPs generally have a lower cost of capital than corporations, which makes MLPs more competitive in the acquisition marketplace. - The sponsor often can defer significant amounts of taxation upon formation of the MLP. - An MLP is a way for the sponsoring entity to "monetize" its investment in a group of assets while retaining control over those assets (by owning the general partner). - Incentive distribution rights entitle sponsor to increasing distributions. on test

What are the 3 general properties of reservoirs?

- Porosity-void space - Permeability-rocks abilitys to allow oil/gas/water to flow - Reservoir homogeneity-vary both vertically and horizontally

Cruide is considered:

- Sweet if bellow .5% sulfur - Sour if above .5% sulfur

Benchmark crude leading production

- There are three primary benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude

Refining processes

- is the process of converting crude oil into useable finished products - processes are generally optimized for the production of transportation fuels - utilizes the differences in boiling temperature to separate things into various components

What are the three approaches to valuation that the speaker, Walt Simkins, mentioned in the video? Hint: One of them is the "cost approach"

-income approach -market approach -cost approach

Characteristics of gas

- wet: Hydrocarbons other than methane are present - Dry: it is almost pure methane - Sour: contains significant amounts of hydrogen sulphide

Compute the EBIT multiple for all 3 comparison firms and show above in the table. What is the average multiple?

-4.628 -694.2 million -770.15 million -7.702 per share -Undervalued

Go to the SEC website and download ConocoPhillips 2015 10-K report. Remember that I showed how to do this in the Chapter 9 lecture. Refer back to the PowerPoint slides if you need help. What was COP's production replacement ratio in 2015 for Total Proven Reserves? Exclude Equity Affiliates. Hint: Go to page 149 of the 10-K report.

-87.3%

VaR is:

-An educated estimate of market risk -A risk management tool

On the Capital IQ webpage, for Gulfport Energy (GPOR) as the company you are researching, who are the comparable companies that Capital IQ identifies? Hint: This would be one of the selections on the left side of the screen. Walt Simkins shows how to find comparable companies in his presentation.

-Cabot Oil & Gas Corporation -Oasis Petroleum Inc. -Parsley Energy, Inc.

Which of the internal strategies have energy firms used in an industry downturn?

-Capital expenditure cuts - Reduce SG&A

Why do firms hedge?

-Prevent financial distress -Prevent under investment -Tax savings -Lower the cost of capital -Increase the value of the firm

What are the advantages of simulation analysis?

-Reflects the probability distributions of each input. -Shows range of NPVs, the expected NPV, sNPV, and CVNPV. -Gives an intuitive graph of the risk situation.

What are the two leading global benchmark crude oils, including the location?

-West Texas Intermediate at Cushing, OK. -Brent in the North Sea (UK)

Rejected energy encompasses which of the following?

-energy lost to inefficiency -heat loss in machine usage -energy lost to the resistance in wiring

What are the 5 basic rules of thumb in choosing probability distribution?

1) Use relevant data, then utilize distribution fitting capability of @Risk. 2) Do the modeling values assume discrete values? If so use discrete Distribution 3) Select distributions that fit the wisdom of experts from whom you get parameter estimates 4)If there is a theoretical reason for selecting a particular distribution, then do so 5) Use the Kiss Principle! (Keep It Simple Stupid)

How many barrels of crude oil does 1 NYMEX call or put contract cover?

1,000

The WTI futures contract traded on the NYMEX is for _______ barrels of crude oil

1,000

The WTI futures contract traded on the NYMEX is for ________ barrels of crude oil.

1,000 - on test

Mcf stands for...

1,000 cubic feet of natural gas

In oil and gas industry, MM or mm means

1,000,000

The total power used by humans worldwide is commonly measured in terawatts. The average lightning strike peaks at 1 terawatt, 1 Terawatt is equal to _______watts

1,000,000,000,000

Wildcat Energy Company has 5,000 mmcf of natural gas reserves and 300 mbbls of crude oil reserves. How many total reserves does the company have on a BOE (barrel of oil equivalent) basis? (Hint: 1 BOE = 6 mcfe ) Question options:

1,133 mBOE

At the end of 2007, Chesapeake Energy reported 6,941,626 mmcfe of total reserves. In BOE (barrel of oil equivalent), this is

1,156,938 m BOE

Bewcastle Oil Service Technologies is evaluating a new project that requires $1,200,000 in new equipment. Bewcastle estimates that the new project will generate $1,400,000 in annual sales at the end of each of the next four years and that total operating costs (variable and fixed costs excluding depreciation) will equal $600,000. Suppose that the firm depreciates the equipment using the straight-line method over four years and the firm's tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life? REMEMBER THAT THIS IS ASKING FOR THE ANNUAL OPERATING CASH FLOWS, NOT NPV.

1,861,467

If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life?

1,861,467

Bewcastle Oil Service Technologies is evaluating a new project that requires $1,200,000 in new equipment. Bewcastle estimates that the new project will generate $1,400,000 in annual sales at the end of each of the next four years and that total operating costs (variable and fixed costs excluding depreciation) will equal $600,000. Suppose that Bewcastle uses Modified Accelerated Cost Recovery System (MACRS) depreciation rates. The applicable rates are 33%, 45%, 15%, and 7%, respectively. The tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life? REMEMBER THAT THIS IS ASKING FOR THE ANNUAL OPERATING CASH FLOWS, NOT NPV.

1,881,966

The tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life?

1,881,966

A trap requires what 3 things?

1. A porous reservoir 2. An overlying impermeable rock 3. A source for oil and gas

7 Sisters New

1. China 2. Gazprom (Russia) 3. Iran 4. Petrobras (Brazil) 5. Petronas (Malaysia) 6. PDVSA (Venezuela) 7. Saudi

3 basic steps of refining

1. Distillation 2. Conversion 3. Treatment and Blending

Describe the major types of drawbacks of Solar Energy so far:

1. Efficiency - low efficiency 2. Cost - the initial cost of purchasing a power a solar system is fairly high 3. Storage - high cost and availability

1. Energy is neither created or destroyed. 2. In a closed system, heat energy tends toward randomness.

Robert Bryce brings up how the public is ignorant on basic science (yet the public can cite names of Shakespeare plays). His point here is that it is crucial that the public is knowledgeable on basic energy to help us make realistic decisions for our future. In his words, what are the two basic laws of thermodynamics?

1. Energy is neither created or destroyed. 2. In a closed system, heat energy tends toward randomness.

3 Characteristics of a good reservoir

1. Porosity 2. Permeability 3. Homogeneity

Which of the following are points that Robert Bryce makes in the video?

1. Scale 2.The Big Fib - We cannot run the world on renewable energy. 3.Density is Green -- It allows us to do more with less. 4.Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover. 5.N2N - Natural gas to nuclear -- Natural gas and Nuclear are the way of the future.

From the Robert Bryce video. Which of the following are points that Robert Bryce makes in the video?

1. Scale 2. The Big Fib - We cannot run the world on renewable energy. 3. Density is Green - It allows us to do more with less. 4. Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover 5. N2N - Natural gas to nuclear - Natural gas and Nuclear are the way of the Future

From the Robert Bryce video. Which of the following are points that Robert Bryce makes in the video?

1. Scale 2. The Big Fib - We cannot run the world on renewable energy. 3. Density is Green -- It allows us to do more with less. 4. Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover. 5. N2N - Natural gas to nuclear -- Natural gas and Nuclear are the way of the future.

From the Robert Bryce video. Which of the following are points that Robert Bryce makes in the video?

1. Scale 2. The Big Fib - We cannot run the world on renewable energy. 3. Density is Green -- It allows us to do more with less. 4. Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover. 5. N2N - Natural gas to nuclear -- Natural gas and Nuclear are the way of the future. on test (part 2)

Calculate the frac spread and explain how it is an important profitability measure for firms operating in midstream (such as MLPs that operate in fractionation of NGLs). [Hint: This is from the lecture on Midstream and there is the Frac Spread Tutorial lecture in Midstream -- Part 2 lecture.] Step 1: Calc NGL value Prices ($/Gal) Conversion Factor (mmBtu/Gal) $/mmBtu Composition (note 1) Value of NGL ($/mmbtu) Ethane (C2) $ 0.0822 0.0664 40.0% Propane (C3) $ 0.4612 0.0916 35.0% Isobutane (C4) $ 0.5555 0.0997 5.0% Normal butane (NC4) $ 0.5426 0.1037 8.0% Natural Gasoline (C5+) $ 0.9508 0.1122 12.0% Total NGL Step 2: HH natgas price $ 2.85 Step 3: Frac Spread

1.12

Calculate the frac spread with the given data in the table:

1.12

What is ConocoPhillips Current Ratio in 2014 and is this a good current ratio?

1.31, no because it should be less than 1

What is ConocoPhillips Current Ratio in 2014 and is this a good current ratio?

1.31, yes because it should be greater than 1

What are the 5 basic rules of thumb in choosing probability distributions when conducting Monte Carlo Simulation?

1.If you have relevant data, then use it! Then utilize distribution fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate. 2.Does the variable you are modeling only assume discrete values? If so, use discrete distributions (see custom category in CB). 3.Select distributions that fit the wisdom of experts from whom you get parameter estimates. 4.If there is a theoretical reason for selecting a particular distribution, then certainly do so. (Energy prices are mean reverting within given time periods.) 5.Use the KISS principle! (Keep it Simple, Stupid!)

Watch Robert Bryce video - What are his five main points?

1.Scale 2.The Big Fib - We cannot run the world on renewable energy. 3.Density is Green -- It allows us to do more with less. 4.Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover. 5. N2N - Natural gas to nuclear -- Natural gas and Nuclear are the way of the future.

In 1986, oil prices crashed to this level. Enter in the number of dollars. do not show cents.

The NYMEX natural gas futures contract is settled by delivery of _______ million British Thermal Units of natural gas

10,000

The NYMEX natural gas futures contract is settled by delivery of ________ million British Thermal Units of natural gas.

10,000

The NYMEX natural gas futures contract is settled by delivery of _________ million British Thermal Units of natural gas.

10,000 - on test

Go to the SEC website and download ConocoPhillips 2015 10-K report. Remember that I showed how to do this in the Chapter 9 lecture. Refer back to the PowerPoint slides if you need help. What was COP's reserve life index in 2015 for Total Proven Reserves? Exclude Equity Affiliates. Hint: Go to page 149 of the 10-K report. (5,453/510)

10.7 years

How many barrels of crude oil does 1 NYMEX call or put contract cover?

1000

In oil and gas industry, M or m means

1000

The WTI futures contract traded on the NYMEX is for __________ barrels of crude oil.

1000

The WTI futures contract traded on the NYMEX is for __________ barrels of crude oil. (Do not use any commas)

1000

What is the trading unit of a NYMEX Light Sweet Crude Oil (WTI) Future?

1000 U.S barrels

Calculate ConocoPhillips 2013 Lifting Cost Ratio for Total Consolidated Operations.

11.75 per BOE

Calculate ConocoPhillips 2013 Production Replacement Ratio for Total Consolidated Operations.

116.4%

Your company, Aaron McIntire Energy Enterprises, is considering the following project. The cost & cash flows are listed below. Use a 10% cost of capital. What is the MIRR of the project? Year Cash Flow 0 -$2,000 1 200 2 600 3 800 4 1,400

13.10%

Calculate the Lifting Cost Ratio for ConocoPhillips in 2013 in $ per BOE. Exclude equity affiliates. Remember -- this is for 2013. Based on the industry average of $9.50 per barrel, this value for COP is considered good, average, or below average? _________________ Lifting Costs Ratio = Total lifting costs / annual production = 6949 / 519 = $13.39 per BOE

13.39; below average

How long, on average, did it take for oil prices to recover to pre-collapse levels in the 1997 and 2008 selloffs?

17 Months

How much oil flows through the Strait of Hormuz each day?

17 million barrels

How much oil flows through the Strait of Hormuz each day? This is a Unit 1 question but you need to look it up.

17 million barrels

How long, on average, did it take for oil prices to recover to pre-collapse levels in the 1997 and 2008 selloffs?

17 months

How long, on average, did it take for oil prices to recover to pre-collapsee levels in the 1997 and 2008 selloffs?

17 months

The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBtus). Calculate the energy of a barrel of oil in kWh.

1700

When did Alessandro Volta invent the battery? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". 1800 1900 1809 1909 1919

1800

Date of first natural gas well drilled in the U.S

1825

Calculate the value of proven reserve additions for COP in 2014. Exclude equity affiliates. List the answer in $ per barrel. Reserve Value Ratio = (improved recovery + changes due to revisions + changes due to purchases) / ( Reserve extensions & Discoveries + improved recovery + revisions + purchases of reserves in place) = (7033 + 1348 + 0) / (154 + 13 + 268 +0) = $19.27 per BOE

19.27

What year was the world's first true gusher oil well. This was in Texas and is know as Spindletop.

1901

U.S. oil production is greater than the rest of the world combined in what year?

1909

Gasoline surpasses kerosene as leader of American Petroleum Industry in this year.

1919

During the late _______, in the aftermath of the Manhattan Project and the bombing of Hiroshima and Nagasaki, there was no demand for nuclear electricity generation and no economically compelling reason to develop it rapidly. This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. 1980's 1960's 1940's 2000's 1920's

1940's

In what year is OPEC formed?

1960

When were energy derivatives first introduced as a financial product?

1970's

The first modern exchange traded energy contract on propane was introduce in what year?

1971

What year was the OPEC oil embargo against the US?

1973

The first oil price shock was in ____, with the Arab oil embargo which caused an ______ in oil prices and shattered the consuming countries' complacency about supply security and price

1973, rise

The first oil price shock was in ____, with the Arab oil embargo which caused an ______ in oil prices and shattered the consuming countries' complacency about supply security and prices.

1973, rise

The first oil price shock was in ____, with the arab oil embargo which caused an ___ in oil prices and shattered the consuming countries complacency about supply security and prices...

1973, rise

Jeff Patterson has a solar panel energy savings project which has the following cash flows: Year Cash Flow 0 -$245,454 1 100,000 2 100,000 3 150,000 4 40,000 5 25,000 The cost of capital is 10 percent. What is the project's discounted payback period?

2.64 years

The cost of capital is 10 percent. What is the project's discounted payback period?

2.64 years

A core sample rock was taken out from an oil reservoir. It is measured that the total bulk volume of the sample rock is 0.5 cubic feet and the pore volume of this sample rock is 0.1 cubic feet. The porosity of this sample rock is

20%

As stated in the video lecture/notes, if all of America's gasoline demand were to be replaced by corn-derived ethanol, it would require an area of arable land roughly __________ larger than the country's total arable land. 30% 20% 40% 10%

20%

Williams is considering the following project and is computing the IRR. The firm has a cost of capital of 10%. What is the IRR for this project?

21.22%

Williams is considering the following project and is computing the IRR. The firm has a cost of capital of 10%. What is the IRR for this project? Year Project Cash Flows 0 -$1,000 1 400 2 300 3 500 4 400

21.22%

Calculate ConocoPhillips 2013 Reserve Replacement Cost Ratio for Total Consolidated Operations.

21.34 per BOE

WHAT WILL BE THE DD&A RATE PER BARREL FOR THE WOODFORD FIELD FOR A COMPANY THAT USES SUCCESSFUL EFFORTS ACCOUNTING?

21.67

WHAT WILL BE THE DD&A RATE PER BARREL FOR THE WOODFORD FIELD FOR A COMPANY THAT USES SUCCESSFUL EFFORTS ACCOUNTING? This is calculated by dividing the costs subject to amortization ($10 million + 3 million) by the reserves which are 600,000 BOE. Remember that this is for the Woodford and the $3 million spent on the successful exploratory well is capitalized.

21.67

A core sample rock was taken out from an oil reservoir. It is measured that the total bulk volume of the sample rock is 0.5 cubic feet and the pore volume of this sample rock is 0.12 cubic feet. The porosity of this sample rock is

24%

According to the author of the book Energy Myths and Realities, a switch to an all electric automobile fleet in the U.S. would require an increase in electrical power generation equal to _____ of all U.S. electrical generation in 2008.

At what wind speeds, the wind turbines machine is shut down to protect the blades and the tower in stormy weather? This question is from the lecture over Chapter 7 Wind Energy. 25 m/s 27 m/s 22 m/s 20 m/s 18 m/s

25 m/s

25 percent

WHAT WILL BE THE DD&A RATE PER BARREL FOR A COMPANY THAT USES FULL COST ACCOUNTING?

25.12

WHAT WILL BE THE DD&A RATE PER BARREL FOR A COMPANY THAT USES FULL COST ACCOUNTING? = $54 million / $2.15 million BOE Note: This is the total expenses ($35 + 19 million) divided by the total reserves. Remember that Full Cost Accounting companies capitalize all expenses associated with drilling.

25.12

What was the NYMEX crude oil average daily volume of contracts in 1998?

254,162

Cowboy Energy has 90 million barrels of proven reserves and 1000 million cubic feet of natural gas proven reserves. How much are the total reserves in BOE (barrel of oil equivalent)? Remember that mcf is thousand cubic feet of natural gas and the conversion factor is 1 BOE = 6 mcfe.

256.7 mm BOE

Using the image provided about U.S. Energy Consumption in 2018, answer the following question: What percentage of total U.S. energy consumption is used in the transportation sector?

28.0%

WTI crude oil is trading for $98.50 per barrel. Gasoline is trading for $2.98 per gallon. Heating oil is trading for $3.10 per gallon. The NYMEX 3-2-1 crackspread is, on a per barrel basis

28.34 per barrel

The Cowboy petroleum company held a proved natural gas reserve in Field C. Following was the result of the two-step Impairment Test for Field C after gas price dropped dramatically. According to the following table, what was the impairment loss due to the gas price drop?

2mm

You are considering an investment with the following cash flows. If your required return (i.e., cost of capital) is 12%, what is the discounted payback period? Year Cash Flow 0 -$55,000 1 25,000 2 20,000 3 15,000 4 10,000 5 5,000

3.95

What percentage of total capacity could be contributed by wind turbines in Europe without resorting to any excessive buildup of reserve capacity?(This question can be answered by reading Chapter 7: Electricity from Wind) 10% 25% 30% 40% 50%

30%

31.6

If its required rate of return is 12%, what is the project's IRR?

31.6

An oil and gas company has the following exploration results for an accounting year. If the company is using the full cost accounting system, how much would be capitalized from the company's exploration activities shown below?

33,000

Calculate ConocoPhillips 2013 Reserve Life Index (RLI) for the Natural Gas Consolidated Operations in Alaska area. The data are in the provided handout.

33.31 years

35,000,000,000,000,000

The amount of solar energy absorbed by the Earth's atmosphere, land, and oceans every year is approximately equal to __________ times the total energy consumption in the United States. 40,000 5,000 100,000 1 million None of these are correct.

40,000

In oil industry, one barrel is equal to

42 gallons

If you had a home with nine 60 watt light bulbs burning, how much energy is being used? Hint: This question is from the lecture over the Electric Power Industry. I also revisit the topic in the Wind Energy Lecture. 540 watts 480 watts 540 kW 600 watts none of the answers is correct

540 watts

Energy Conversion: 90,000 barrels of oil is approximately equal to what amount of mcf

540,000 mcfe

Energy Conversion: 90,000 barrels of oil is approximately equal to what amount of mcf (thousand cubic feet of natural gas): Hint: 1 bbl = 6 mcfe

540,000 mcfe

Energy Conversion: 90,000 barrels of oil is approximately equal to what amount of mcf (thousand cubic feet of natural gas): Hint: 1 bbl = 6 mcfe 540 mcfe 540,000 mcfe 5,400 mcfe 15,000 mcfe 540,000 cfe

540,000 mcfe

Energy conversion: 90,000 barrels of oil is approximately equal to: (Hint:1bbl = 6mcfe)

540,000 mcfe

WHAT ARE THE TOTAL EXPENSES DURING 2015 FOR A COMPANY USING FULL COST ACCOUNTING? ASSUME THAT PRODUCTION IS 225,000 BOE FOR THE YEAR.

5,651,163 in total DDA charges for the barrels producted

A refinery is processing Crude X with the refining data shown on the table below. If you are also given the price and refining cost of crude X, what is the refining margin for Crude X

5.0

What is the Frac Spread for the calculation at the end of the Frac Spread Tutorial (see Unit 1 folder and the "Unit 1-Midstream - Frac Spreads Tutorial"). This is for the Pop Quiz calculation at the VERY END of this file (PAGE 2).

5.58

An energy firm has a $600 million market value of equity, $300 million interest bearing debt, $50 million in cash and equivalents and an EBITDA of $100 million. Exploration expenses paid that year were $50 million. What is the enterprise to EBITDAX multiple?

5.7 x

According to the article "Bernstein Energy & Power: The EVs are coming! The EVs are coming!," the Tesla analyst's base case projects what percentage of all automobile sales to be electric vehicles by 2040?

50%

Approximately, how much debt financing is used for a typical wind project? 50% - 70% None of these are correct. 10% - 20% 30% - 50% > 80%

50% - 70%

What is the total construction cost ($/kW) of natural gas, wind, and solar in 2017 according to Figure 3 of the reading? Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. 5800 5000 4000 500 800

5000

A dam in a river has been built for power generation. The dam is 15 feet high, that is, the water fall is 15 feet. The average amount of water flowing in the river which is available for power generation is 700 cubic feet per second. The efficiency of turbine and generator is 70%. Then the power generated in this river through this dam is

623 kilowatts

Since 1983, the oil sector has had ___ shocks in which oil prices have dropped by 40% or more

Since 1983, the oil sector has had ___ shocks in which oil prices have dropped by 40% or more.

Costs are capitalized under the full cost method without regard to future benefits. Consequently the capitalized costs of a full cost company could well exceed its future net revenues and its underlying value. Therefore a full cost accounting company is subject to the ceiling test requirements. Now assume that during current quarter's ceiling test, a full cost company's net capitalized costs are $85 million dollars and the calculated ceiling is $78 million dollars. How much asset value should this company be written down (expensed) as a result of this quarter's ceiling test?

7 million dollars

If you had a home with nine 100 watt light bulbs burning and you had them on for eight hours, how much energy is being used? 7.2 kW hours (kWh) 7200 kW hours (kWh) 1.2 kWh 9.0 kWh none of the answers is correct

7.2 kW hours (kWh)

According to the information shown in Figure 5, what is the current estimated total electricity consumption TWh/year for bitcoin? Note: This question is from the reading, " Heir to the Throne: Will Lithium Seize the Storage Crown?", NextEra Energyinsight, Oct. 02, 2019. 65.2 70.3 61.2 73.1

73.1

Read Chapter 16, Question 10 on page 407. What is the net purchase price of jet fuel in cents per gallon, when the transactions are completely closed out in August?

73.68 cents per gallon

What is the net purchase price of jet fuel in cents per gallon, when the transactions are completely closed out in August?

73.68 cents per gallon

Calculate the Production Replacement Ratio for COP in 2014 for CRUDE OIL. List the answer in % and show to one decimal place (i.e., 8.5%). Exclude equity affiliates.

74.9%; the ratio is below average. Ideally, COP would like this ratio to be 100% higher.

Future US energy demand -- Most will still come from oil, gas, and coal between now and 2040. The EIA estimates that ___ percent of total energy needs will be met by these three fossil fuels in 2040 as compared to ____ actually used in 2011. Renewable energy is forecast to increase from about ___ in 2011 to ___ % of total demand in 2040

78, 82. Renewables: 9, 13

How many days does the country of South Africa need to consume 100 kilowatt-hours of electricity? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". 8 5 28 106 235

To date, how many states in the U.S. have authorized CCA policies? Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. 8 3 1 2 5

Calculate the Production to Reserves Ratio for COP in 2014, using Total Proved Reserves. List the answer in % and show to one decimal place (i.e., 8.5%). Exclude equity affiliates. SHOW WORK! You have the reserve disclosures as a handout for ConocoPhillips on D2L in the Unit 3 folder.

8.0%

Calculate the Production to Reserves Ratio for COP in 2014, for crude oil only (see pages for just crude oil proved reserves, page 138 of the 10-K COP handout that goes with this assignment). List the answer in % and show to one decimal place (i.e., 4.5%). Exclude equity affiliates.

8.3%

According to the API reading, approximately what percentage of world energy is forecasted to come from oil, coal, and natural gas (combined) in the year 2035?

80%

Which option has the greatest liquidity?

8200 Put

Which option has the greatest liquidity?

8200 put (highest volume)

Calculate the F&D Reserve Replacement Ratio for COP in 2014 FOR TOTAL PROVED RESERVES. Exclude equity affiliates. List the answer in % and show to one decimal place (i.e., 108.5%).

84.5%; this ratio is below average because it is ideally would be 100% or higher.

As discussed in the lecture video, from 2008 to 2015, what was the percentage change in U.S. production of crude oil and liquids?

88 percent

From 2008 to 2015, what was the percentage change in U.S. production of crude oil and liquids?

88 percent

According to 2016 API Report, it is estimated that in 2040, about _______ of world total energy demand will be from fossil fuel

88%

What are the outlooks for our energy needs for the US and the world by 2040...? (Renewables?)

9% more and 56% more

Calculate ConocoPhillips 2013 Production to Reserve Ratio for the Crude Oil Consolidated Operations in the Lower 48 area. The data are in the provided handout

9.24%

In the figure below, if X represents the amount of Proved Reserve, Y refers to the amount of Probable Reserve, Z is the amount of Possible Reserves. Then there is ____probability (1P) that at least X amount of hydrocarbon will be recovered; there is _____probability (2P) that at least (X+Y) amount of hydrocarbon will be recovered; and there is ______probability (3P) that at least (X+Y+Z) amount of hydrocarbon will be recovered

90%;50%;10%

Energy Conversion: 90,000 barrels of oil is approximately equal to what amount of mcf (thousand cubic feet of natural gas): Hint: 1 bbl = 6 mcfe

90,000*6mcf= 540,00

Problem -- Energy calculation to sum different energy units to be in BOE units: Cowboy Energy has 90 million barrels of proven reserves and 1000 million cubic feet of natural gas proven reserves. How much are the total reserves in BOE (barrel of oil equivalent)? Remember that mcf is thousand cubic feet of natural gas and the conversion factor is 1 BOE = 6 mcfe. Hint: million = mm

90.17 mmBOE

According to the lecture notes for Chapter 8: The Pace of Energy Transitions, biomass and renewables are expected to account for _____ % of energy consumption in 2040. 20% < 10% 30% >40%

< 10%

Sweet Crudes have what sulfur content?

<1%

Extra Heavy Crude has what API? <10 Between 22&30 >30 <22

<10

Heavy Crude has what API? <10 Between 22&30 >30 <22

<22

Sour Crudes have what sulfur content?

>1%

Light Crude has what API? <10 Between 22&30 >30 <22

>30

Based on historical data, natural gas prices are more volatile than crude oil prices. This is, natural gas prices have a higher standard deviation than crude oil prices. This statement is: a) True b) False

Bewcastle Oil Service Technologies is evaluating a new project that requires $1,200,000 in new equipment. Bewcastle estimates that the new project will generate $1,400,000 in annual sales at the end of each of the next four years and that total operating costs (variable and fixed costs excluding depreciation) will equal $600,000. Suppose that the firm depreciates the equipment using the straight-line method over four years and the firm's tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life? a) $1,861,467 b) $1,841,467 c) $1,851,467 d) $1,821,467

In competitive energy markets, mean reversion is a useful model in which prices are expected to revert towards the long-term mean (also used in interest rate modeling). a) True b) False

One of the disadvantages of the payback period is that it ignores cash flows occurring after the payback period. a) True b) False

Risk analysis in capital budgeting is usually based on subjective judgments. (Hint: This question is from the Capital Budgeting and Risk Analysis in the Oil and Gas Industry lecture.) a) True b) False

Which of the following statements is correct. The three most common distributions used in Monte Carlo Simulation are: a) Triangular, uniform, and lognormal b) Triangular, uniform, and normal c) Triangular, uniform, and Gaussian d) Triangular, normal, and lognormal e) None of the above are correct.

Which of the following statements is correct? a) Mean reversion in energy prices is a way to model in which prices are expected to revert to a mean vale over time. b) Mean reversion in energy prices is a way to model in which prices are expected to move further away from the mean value over time. c) Mean reversion in energy prices is a way to model in which prices are expected to move towards zero over time. d) Mean reversion in energy prices means that the mean value is constantly changing over time.

Which of the following statements is most correct? a) The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the IRR. b) The NPV method assumes that cash flows will be reinvested at the risk free rate while the IRR method assumes reinvestment at the IRR. c) The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the risk-free rate. d) The NPV method does not consider the inflation premium. e) The IRR method does not consider all relevant cash flows, and particularly cash flows beyond the payback period.

__________ shows how changes in only one variable at a time, such as volume or price, affects the NPV or IRR. a) Sensitivity Analysis b) Scenario Analysis c) Monte Carlo Simulation d) Mean Reversion e) None of the above

_________________ is described as follows: •Shows how changes in a variable such as unit sales affect NPV or IRR. •Each variable is fixed except one. Change this one variable to see the effect on NPV or IRR. •Answers "what if" questions, e.g. "What if sales decline by 30%?" a) Sensitivity analysis b) Scenario analysis c) Monte Carlo simulation d) Capital budgeting e) None of the above

What is Monte Carlo Simulation?

A computerized version of scenario analysis which uses continuous probability distribution. Using this technique, the computer selects values for each variable based on given probability distributions.

How did Aristotle describe an option in Book 1 of Politics?

A financial device which involves a principle of universal application

False

A good valuation provides a precise estimate of value. (Note: From the relative valuation lecture.)

Which of these is an advantage of horizontal (directional) drilling?

A greater portion of the reservoir is exposed to drilling horizontally versus vertically.

Why is the midstream industry considered stable?

A large part of revenues come from fixed rate contracts such as transportation or storage fees

Why is the midstream industry considered stable? Future markets eliminate commodity risk The MLP business model eliminates tax risk A large part of revenues come from fixed rate contracts such as transportation or storage fees The Midstream industry is a volatile industry subject to changing commodity prices

A large part of revenues come from fixed rate contracts such as transportation or storage fees

Liquidity

A market is said to be "liquid" when it has a high level of trading activity and open interest

What is a subsidy miner?

A person, group, or firm that actively seeking money from government subsidies.

Which of the following explain the functionality of call and put options?

A put option sets the floor price for the commodity. A call option sets the ceiling price for the commodity.

_____ is one who has sold futures contracts and has not yet offset that position

A short

A farmer with wheat in the fields and who uses the futures market to protect a profit is an example of:

A short hedge Selling futures to guard against a potential loss

Rejected energy encompasses which of the following? select all that apply. This question comes from the lecture on Energy Economics A) Energy lost to the resistance in wiring B) Heat loss in machine usage C) Energy that was not produced to the regulation standard and cannot be used D) Energy lost to ineffeciency

A) Energy lost to the resistance in wiring B) Heat loss in machine usage D) Energy lost to ineffeciency

Cowboy Energy is an oil and gas company that began operation in2014. Below is the drilling program late that year that will not begin production until 2015. At the beginning of 2015, Cowboy Energy has the following net investment by field, all located in the U.S. QUESTION: WHAT ARE THE TOTAL EXPENSES DURING 2015 FOR A COMPANY USING FULL COST ACCOUNTING? ASSUME THAT PRODUCTION IS 225,000 BOE FOR THE YEAR. Remember that DD&A stands for depreciation, depletion and amortization. HINT: THIS QUESTION IS FROM CHAPTER 8 AND EXHIBIT 8.2 HAS AN EXAMPLE OF THIS TYPE OF ANALYSIS. A) $5,651,163 in total DDA charges for the barrels producted. B) $6,000,000 C) $6,452,696 D) $8,111,111 E) $0

A) $5,651,163 in total DDA charges for the barrels producted.

True

A valuation in Relative Valuation, we realize that all valuations will have a bias. So relative valution is not an objective search for the "true" value. (Note: From the relative valuation lecture.)

False

A valuation is an objective search for "true" value. Hint: From the lecture on Relative Valuation.

Men who search for oil or natural gas in areas that can be miles from the closest producing well are known as? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46.)

A wildcatter

Robert Bryce (listen to video!) brings up how the public is ignorant on basic science (yet the public can cite names of Shakespeare plays). His point here is that it is crucial that the public is knowledgeable on basic energy to help us make realistic decisions for our future. In his words, what are the two basic laws of thermodynamics (basic Physics 101 stuff)? A) 1. Energy is neither created or destroyed. 2. In a closed system, heat energy tends toward randomness. B) 1. Energy is neither created or destroyed. 2. Energy = mc2. C) 1. Energy is either created or destroyed. 2. Wind energy tends towards randomness. D) 1. A body in motion stays in motion. 2. In a closed system, heat energy tends toward randomness.

A) 1. Energy is neither created or destroyed. 2. In a closed system, heat energy tends toward randomness.

How many discussion posts do you need to make this semester and how many points in total are they worth? Note: See the syllabus for details on what types of discussion posts count, how much they are worth, and other requirements. A) 7, 35 points B) 10, 35 points C) 1000, a million points D) 5, 25 points E) 8, 40 points

A) 7, 35 points

What are the 3 forms of fossil fuels? A) Coal, natural gas, and petroleum. B) Tyrannosaurus Rex, Ankylosaurus, and Velociraptor. C) Coal, natural gas, and bitumens. D) Coal, peat, and petroleum. E) coal, natural gas, and gasoline

A) Coal, natural gas, and petroleum.

What type of fuel has the highest BTU per volume? Hint: From the Ch. 3 Energy Economics lecture. A)Diesel B) Wood C) Kerosene D) Gasoline E) Natural gas

A) Diesel

Rejected energy encompasses which of the following? select all that apply.

A) Heat loss in machine usage B) Energy lost to ineffeciency D) Energy lost to the resistance in wiring

Go to Robert Bryce's website at the link below and read the article, "Stop Subsidizing the Big Wind Bullies". Then answer the question. Here is the link: http://robertbryce.com/stop-subsidizing-big-wind-bullies/. Which US firm is the biggest recipient of subsidies based on ACENY's roster? A) NextEra Energy B) Subsidy Tracker C) Alliance for Clean Energy New York D) None of the choices are correct. E) Reynold's Group

A) NextEra Energy

What was Col. Drake's oil company? This question comes from the lecture on Energy Economics. A) Rock oil company B) Northwestern oil C) Standard oil D) ExxonMobil

A) Rock oil company

Which country consumes the most oil? This question comes from the lecture on Energy Economics. A) U.S.A B) China C) Mexico D) India

A) U.S.A

This question is from the readings about accounting standards in oil and gas. Under the successful efforts method, all exploratory dry holes are __________ . A) expensed B) capitalized C) hidden from everyone because it is so embarassing! D) none of the above

A) expensed

Why were the 1980's an awful time in the oil business? (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

A) Growing supply from the North sea B) Oil fields in California hit historic peaks C) Some members of OPEC ramped up production Correct Response D) All of the above

Refining and marketing is known collectively as ___________.

A) Upstream B) Midstream C) Petrochemicals Correct Response D) No choice is correct

Using the image provided about U.S. Energy Consumption in 2018, answer the following question: What percentage of total U.S. energy consumption is used in the transportation sector? A) 28.0% B) 28.8% C) 31.1% D) 24.3% E) 37.1% 26.5%

A) 28.0%

This question is from Dana Murphy's presentation on Feb. 22, 2016 (guest speaker that was recorded and video & slides posted to D2L). Two to five million gallons are needed to frac a shale well, with an average of 4.5 million gallons. Which of the following also uses at least 4.5 million gallons?

A) 6.75 acres of corn in one season B) None of the choices given are correct C) New York City in 6.3 minutes (All of the choices listed are correct) = Answer E) A golf course in 22.5 days

Which of the internal strategies have energy firms used in an industry downturn?

A) Capital expenditure cuts B) Seek debt covenant relief C) Reduce SG&A (salaries, general, and administrative) costs D) M&A (A and C are correct)

What type of fuel has the highest BTU per volume? Hint: From the Ch. 3 Energy Economics lecture. A) Diesel B) Gasoline C) Kerosene D) Natural gas Wood

A) Diesel

Which of the following are advantages of MLPs?

A) Due to lack of corporate level income tax, MLPs generally have a lower cost of capital than corporations, which makes MLPs more competitive in the acquisition marketplace. B) The sponsor often can defer significant amounts of taxation upon formation of the MLP. C) An MLP is a way for the sponsoring entity to "monetize" its investment in a group of assets while retaining control over those assets (by owning the general partner). D) Incentive distribution rights entitle sponsor to increasing distributions. (All of the answers are correct.)

In the lecture on Chapter 3, what was discussed as one of the most important characteristics of a fuel source? This question comes from the lecture on Energy Economics. A) Energy Density B) Environmental impact C) Sulfur content D) Carbon content

A) Energy Density

Rejected energy encompasses which of the following? select all that apply. This question comes from the lecture on Energy Economics. A) Energy lost to ineffeciency B) Energy that was not produced to the regulation standard and cannot be used C) Energy lost to the resistance in wiring D) Heat loss in machine usage

A) Energy lost to ineffeciency B) Energy that was not produced to the regulation standard and cannot be used C) Energy lost to the resistance in wiring

Rejected energy encompasses which of the following? select all that apply. This question comes from the lecture on Energy Economics. A) Energy lost to ineffeciency B) Energy lost to the resistance in wiring C) Heat loss in machine usage D) Energy that was not produced to the regulation standard and cannot be used

A) Energy lost to ineffeciency B) Energy lost to the resistance in wiring C) Heat loss in machine usage

In 1978, who wrote in Scientific American that "the supply of oil will fail to meet increasing demand before the year 2000"?

Andrew Flower

What was the reason behind the energy consumption growth in the commercial sector in the 1950's? This question comes from the lecture on Energy Economics. A) Introduction of air conditioning B) The baby boom C) Women entering the workforce after WWII D) People worked later hours

A) Introduction of air conditioning

Benchmarking is important when

A) Investing B) Doing an internal company analysis C) Considering employment D) All of the above (CORRECT)

What would happen if the U.S. banned fracking? This question comes from the Wall Street Journal titled: "Big Issues: Energy (A Special Report) — What Would Happen if the U.S. Banned Fracking?", Nov. 20,2019 A) Ms. Siegel thinks concerns about oil prices dramatically increasing is a "red herring." B) Mr. Ori believes carbon dioxide emissions will be drastically reduced. C) Mr. Ori believes the U.S. would quickly switch to renewable energy sources. D) Ms. Siegel believes it would cost tens of thousands of job. E) All of the answers are correct.

A) Ms. Siegel thinks concerns about oil prices dramatically increasing is a "red herring."

One of the most well-known crack spreads is the: Asphalt to bitumen spread A) NYMEX 3:2:1 B) Frac Spread C) Gulf Coast 3:2:1 D) Singapore 3:2:1

A) NYMEX 3:2:1

Which of the following types of costs must be disclosed annually, regardless of whether the costs are capitalized or charged to expense when incurred.

A) Property Acquisition Costs B) Exploration Costs C) Development Costs ****all of the above

What are the advantages of simulation analysis?

A) Reflects the probability distributions of each input. B) Shows range of NPVs, the expected NPV, sNPV, and CVNPV. C) Gives an intuitive graph of the risk situation. (A, B, and C)

Who caused the downturn of the oil industry that lasted almost ten years? This question comes from the lecture on Energy Economics. A) The Saudi oil minister B) Donald Trump C) The executive of OPEC D) Jimmy Carter

A) The Saudi oil minister

It is always very, very, very important to read the NEWS postings for this class on the "Course Home" page so that I am aware of what is happening that week and important assignments and due dates in the class. I should check the NEWS postings at least twice per week because I want to do well in the course! :-) A) True B) False

A) True

Laundry detergent is a petroleum product. This question comes from the lecture on Energy Economics. A) True B) False

A) True

This question is from the readings about accounting standards in oil and gas. Under the successful efforts method, all exploratory dry holes are __________ . A) expensed B) capitalized C) none of the above D) hidden from everyone because it is so embarassing!

A) expensed

Congratulations - You have just landed a new job in the finance department at a chemical company in Texas (yes - I've had students get jobs in this industry and work in the finance department!) Your new boss asks you to hedge natural gas price risk for their power generation needs. [Yikes! You now wish you had paid more attention to Dr. Simkins when she covered this topic in class!] Your firm has not hedged in the past and last year, the board of directors became concerned and told management to start hedging at least 25% of commodity price risk for natural gas. Your boss wants you to hedge using 1000 natural gas futures contracts (which is at least 25% of your natural gas needs) for July. It is now February 15th and the cash (spot) price for natural gas is $3.00 per mmbtu. The July futures contract for natural gas is $2.90 per mmbtu. Use the July contract to hedge. Go long or short the required number of futures contracts. On July 15th, you close out the futures position at $3.47 per mmbtu (i.e., the futures price to offset your position) and purchase the natural gas in the spot market. Natural gas cash prices are $3.32 per mmbtu on July 15th. Answer the following questions: A. WHAT IS THE BASIS ON FEB. 15TH? B. WHAT IS THE BASIS ON JULY 15TH? C. DID THE CHANGE IN THE BASIS BENEFIT THE HEDGER OR HARM THE HEDGER? Hint: This question is similar to Question 10 in Chapter 16. Also, refer to Exhibit 16.4

A. $0.10; B. $-0.15; C. BENEFIT

WHAT IS THE BASIS ON FEB. 15TH?

A. $0.10; B. $-0.15; C. BENEFIT

If crude oil prices rise to $135, how much will they make or lose on the collar strategy above, on a per barrel basis (and state whether profit or loss)?

A. $17.00 per barrel profit; B. $27.00 per barrel loss; C. $97.00 effective cost of crude oil.

Read Question 12 in Chapter 16. For Part D, answer the question in the last bullet, based on part D. These questions in the last bullet of part D are: A. If crude oil prices rise to $135, how much will they make or lose on the collar strategy above, on a per barrel basis (and state whether profit or loss)? B. If crude oil prices fall to $70, how much will they make or pay out on the option collar on a per barrel basis? C. If they buy the crude oil in the cash market, how much will be the net amount they pay for crude oil (assume it is a perfect hedge) on a per barrel basis? Hint: I show how to work this problem in one of the videos over Chapter 16.

A. $17.00 per barrel profit; B. $27.00 per barrel loss; C. $97.00 effective cost of crude oil.

In the first two weeks of lectures, we discussed how energy consumption is measured quadrillion btus. We mentioned how we consume about 35 quadrillion btus in oil currently. Which if the following is the correct way to write this number? 35,000,000,000,000,000 35,000,000 35,000,000,000 35,000,000,000,000 No choice is correct

A. 35,000,000,000,000,000

If COP hedged 25% of "Total Production, Oil (MMbbls)" as shown in Capital IQ, what would be the millions of barrels hedged?

A. 65.8 million barrels; B. 65,800 contracts

This question requires you to use CapitalIQ. Once you are logged into CapitalIQ, you will need to select ConocoPhillips as the company by entering it in the Search box at the top. Then using the left hand menu, select "Industry Specific" under the category "Financials/Valuation". Here you will see ConocoPhillips disclosures for oil, natural gas, etc. Use the year 12/31/2017 and answer the following questions: A. If COP hedged 25% of "Total Production, Oil (MMbbls)" as shown in Capital IQ, what would be the millions of barrels hedged? B. How many futures contracts would they need if they hedged using futures?

A. 65.8 million barrels; B. 65,800 contracts

Over time, electricity has been responsible for most of the energy consumption growth in the commercial sector due to the use of what? Hint: From Chapter 3 Energy Economics lecture. air conditioning cooking natural gas cars electric vehicles heating systems

A. Air conditioning

What were the forecasts of peak-oil theorists, especially the doomsday scenarios, in the coming decades? This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. All of the choices are correct Near-stone age conditions None of the choices are correct Mass unemployment Starvation

A. All of the choices are correct

What type of fuel has the highest BTU per volume? Hint: From the Ch. 3 Energy Economics lecture. Diesel Wood Kerosene Natural gas Gasoline

A. Diesel

Who was the first person to drill oil in the USA in 1859? Edwin L. Drake Boone Pickens Charles Goodyear Thaddeus Fairbanks Sir William Robert Grove

A. Edwin L Drake

In the late 19th Century, three technologies competed to power the automobiles of the future. The three technologies were: (This question is from the video lecture and chapter about electric cars.) Electric, steam, and gasoline None of these are correct. Steam, gasoline, and biofuel Electric, biofuel, and gasoline Gasoline, electric, and solar

A. Electric, steam, and gasoline

Which petrochemical feedstock (hint: think of a natural gas liquid) is the most important, #1, to the petrochemical industry. Which is #2? None of the answers are correct Methane and propane Butane and iso-butane Propane and butane Ethane and butane

A. None of the answers are correct (Ethane & Propane)

__________ was an early proponent of electric-powered automobiles. Thomas Edison Henry Ford Francis Stanley Leon Serpollet None of these are correct.

A. Thomas Edison

In 1985/86, Saudi Arabia's jettisoning of the swing producer role and adoption of netback pricing triggered _____ in oil prices. a sharp decrease no change a sharp increase a small increase

A. a sharp decrease

What is the primary goal of the conversion process in Refining? To produce gasoline To produce ethanol To produce ethane To produce methane

A. to produce gasoline

Which of the following is a light sweet crude oil?

API 30, 0.5% Sulfur

Which of the following is a light sweet crude oil?

API of 30 and 0.5% sulfur

According to the notes and lecture, which valuation method is preferred for investment in wind projects? Adjusted Present Value (APV) NPV using static WACC NPV using dynamic WACC None of these are correct. Profitability Index

Adjusted Present Value (APV)

16.0%

Who received the Nobel Prize in Physics for his theory of the photoelectric effect> Albert Einstein Charles Fritts Max Planck None of these are correct. Prof. David Carter

Albert Einstein

Select a best solution among the following statements

All of above statements are correct.

What are the secondary matters that have undoubtedly been restraining the diffusion of wind turbines and that may, in the future, combine to impose significant limits on the ultimate development of wind-powered electricity generation?(This question can be answered by reading Chapter 7: Electricity from Wind) Aesthetic impact of wind farm Wind turbine noise Threat to birds and bats All of the above

All of the Above

What were some of the factors that halted, and then reversed, the nuclear expansions? This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. Shortage of skilled labor Major delays in construction cumbersome regulations Drop in electricity demand All of the choices

All of the Choices

What does "risk" mean in capital budgeting?

All of the above

Which of the following about refining is true?

All of the above

World oil chokepoints are critically important locations to world oil trade because so much oil passes through them. Strait of Hormuz is the most important one. Which of the following statement about Strait of Hormuz is true ( choose the best answer please!)

All of the above

Why Souki had clear advantages over his rivals when he was hired by an investment banking firm?

All of the above (His father remained well-known in the region; petroluem potentates trekked to Souki's home to seek advice; petroleum potentates were eager to meet Charif; Souki was not intimidated by wealthy men"

Which of the following are advantages of MLPs?

All of the answers are correct.

Dana Murphy: Two to five million gallons are needed to frac a shale well, with an average of 4.5 million gallons. Which of the following also uses at least 4.5 million gallons? A) 6.75 acres of corn in one season B) A gold course in 22.5 days C) New York City in 6.3 minutes D) None of the choices given are correct E) All of the choices listed are correct

All of the choices

What were the forecasts of peak-oil theorists, especially the doomsday scenarios, in the coming decades?

All of the choices are correct

Which one of the following does not belong as one of the five Basic Rules of Thumb in choosing probability distributions?

All of the choices listed are one of the basic rules of thumb -- so none of them are incorrect.

According to the lecture note, the key constraints of Wind Power are _______

All of these

Which of the following is not an advantage of solar power? Solar power is sustainable. Solar power is geographically widely available. Solar power does not contribute to climate change because it does not generate CO2. All of these are advantages of solar power.

All of these are advantages of solar power.

What does "risk" mean in capital budgeting? -Uncertainty about a project's future profitability -Measured by standard deviation of NPV, IRR, and beta -Will taking on the project increase the firm's/stockholder's risk? -All the above

All the above

What factors makes the cultivation of sugarcane and the subsequent ethanol fermentation a clearly energy - rewarding enterprise? This question is from Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Its average global yield is about 65 ton/hectare All the choices are correct Sugarcane photosynthesizes year around Do not need any nitrogen fertilizers Ethanol production does not require any external fuel

All the choices are correct

What was the reason behind the ethanol drive in the USA? This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities". Middle Eastern instability Powerful agribusiness Renewed concerns about high crude oil prices All the choices are correct Enormous and effective Washington Lobby

All the choices are correct

Which of the following is not one of the 5 Basic Rules of Thumb in choosing probability distributions? -If you have relevant data, then use it! Then utilize distribution fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate -Does the variable you are modeling only assume discrete values? If so, use discrete distributions. -Select distributions that fit the wisdom of experts from whom you get parameter estimates. -If there is a theoretical reason for selecting a particular distribution, then certainly do so. -Use the KISS principle! (Keep it Simple, Stupid!) -All of the choices listed are correct.

All the choices are correct

As discussed in the lecture video, the change in the U.S. production of crude oil and liquids, during the 2008-2015 period, represented what percentage of the entire world's increase in production?

Almost 70 percent

As discussed in the lecture video, the change in the U.S. production of crude oil and liquids, during the 2008-2015 period, represented what percentage of the entire world's increase in production? Almost 70 percent Nearly 25 percent Between 40 and 45 percent None of these. Less than 10 percent

Almost 70 percent

The change in the U.S. production of crude oil and liquids, during the 2008-2015 period, represented what percentage of the entire world's increase in production?

Almost 70 percent

What hedge fund lost $6 billion on speculative natural gas trades, in particular the March-April spread trade known as the "widow maker" and then went out of business

Amaranth Advisors

What hedge fund lost $6 billion on speculative natural gas trades, in particular the March-April spread trade known as the "widow maker" and then went out of business?

Amaranth Advisors

What hedge fund lost $6 billion on speculative natural gas trades, in particular the March-April spread trade known as the "widow maker" and then went out of business? (Hint: This is from the reading "10 biggest energy risk management disasters of the past 20 years".)

Amaranth Advisors

An electric starter that eliminated hand cranking to start gasoline-powered automobiles.

Inventor Charles F. Kettering held a total of 186 patents. Many of his inventions were very influential in the automotive industry, including the development of Freon refrigerant for air conditioning systems, leaded gasoline to reduce knocks (with Thomas Midgley), and __________. An electric starter that eliminated hand cranking to start gasoline-powered automobiles. Improved sparkplugs, making gasoline-powered automobiles more efficient. An advanced carburetor allowing early gasoline-powered automobiles to travel over 100 miles on a tank of gasoline. Halogen headlights. None of these are correct.

An electric starter that eliminated hand cranking to start gasoline-powered automobiles.

5.7 x

8.5 x

An energy firm has a $600 million market value of equity, $300 million interest bearing debt, $50 million in cash and equivalents and an EBITDA of $100 million. What is the enterprise to EBITDA multiple?

_______ is the liquidation of a purchase of futures through the sale of an equal number of contracts of the same delivery month, or the covering of a sale of futures contracts through the purchase of an equal number of contracts of the same delivery month.

An offset

What are Hydrocarbons?

Any organic compound consisting only of carbon and hydrogen

What are hydrocarbons?

Any organic compound consisting only of carbon and hydrogen

What are hydrocarbons?

Any organic compound consisting only of carbon and hydrogen,

What are hydrocarbons?

Any organic compound consisting only of carbon and hydrogen.

When valuing a private company acquisition, which of the following is important when conducting step 4 analysis (refining the estimate)?

Apply a discount to the Step 3 estimate because the calculation is for acquiring a private company

When valuing a private company acquisition, which of the following is important when conducting step 4 analysis (refining the estimate)? Pick the best answer.

Apply a discount to the Step 3 estimate because the calculation is for acquiring a private company

Dana Murphy: Which formation is of the most concern for earthquakes from oil and gas drilling in Oklahoma?

Arbuckle

This question is from Dana Murphy's presentation on Feb. 22, 2016 (guest speaker that was recorded and video & slides posted to D2L). Which formation is of the most concern for earthquakes from oil and gas drilling in Oklahoma?

Arbuckle

You just ate an entire Bloomin' Onion at Outback Steakhouse. It had 3080 calories. Yes -- This is true! How many hours could the amount of energy contained in the Bloomin' Onion power a 100 watt light-bulb?Hint: This question is from the lecture over the Electric Power Industry. I also revisit the topic in the Wind Energy Lecture. Around 35 hours Around 6 hours Around 40 hours Around 12 hours Around 18 hours Around 4 hours

Around 35 hours

What percentage of the entire world's supply of oil comes from fracked U.S. shale formations? This question comes from the Wall Street Journal titled: "Big Issues: Energy (A Special Report) — What Would Happen if the U.S. Banned Fracking?", Nov. 20,2019 An insignificant amount (<1%) Around 2% Around 8% Around 5% Greater than 10%

Around 8%

From the diagram below, we can estimate what percentage of the observations (simulation results) occur with a NPV >0?

Around 90% or higher

Which of the followings illustrates a damage to the surface of the Earth? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". Ash ponds at power plants Air pollution Dead miners Over consumption Over exploitation

Ash ponds at power plants

Until 2018, which of the following cities had met 100% renewable energy targets? Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. Aspen,CO Burlington, VT Georgetown, TX Kodiak Island, AK Stuttgart, AR Greensburg, KS

Aspen,CO Burlington, VT Georgetown, TX Kodiak Island, AK Greensburg, KS

Increase the required rate of return

The Bloomberg illustration shows ConocoPhillips and industry peers. Which of the companies shown has the best Lifting Cost ratio (5 year average)? a) ConocoPhillips b) Noble Energy c) Anadarko d) Marathon Oil e) Murphy Oil f) Occidental Petroleum

The Finding Cost Ratio measures a company's ability to continue to operate in the future by measuring the extent to which a company is replacing the reserves it is producing. a) True b) False

The number of protons an atom has tells us the __________.

Atomic Number

Who said " Some people are born with art or science influence; I've always liked places and geography"?

Aubrey McClendon

How do you check the source of data in the templates?

Audit Data

Which one of the following is one of Tesla's competitors?

Auro Robotics

Which of the following countries was the second largest user of coal (in % of sources) in 2014 for electric power generation?(Note : This question is from the lecture over the Electric Power Industry.) China U.S. Germany Norway France Vietnam Australia Canada Saudi Arabia

Australia

The project has an up-front cost of $100,000. The project's WACC is 12% and its NPV is $10,000. Which of the following statements is most correct? a) The project should be rejected since its return is less than the WACC b) The project's IRR is greater than 12% c) The project's MIRR is less than 12% d) All of the above e) None of the above

Cowboy Oil Company (COC): The company has purchased $4,500,000 worth of equipment that required $500,000 in shipping and installation costs. In addition, the firm's accounts receivable and inventories increased by $1,000,000 and its spontaneous liabilities increased by $600,000. COC's net annual sales revenue is expected to be $8,500,000 at the end of each of the next four years, and total-operating costs (fixed and variable costs excluding depreciation) will be $5,300,000. Assume that the firm uses the straight-line depreciation method to depreciate the equipment and the firm's tax rate is 40%. The equipment is expected to have a salvage value of $800,000 at the end of the project's life in four years, and the firm expects all of its investment in net working capital (NWC) to be returned. If its required rate of return is 12%, what is the project's net present value (NPV)? a) $2,009,501 b) $2,509,641 c) $3,546,721 d) -$1,821,467

Equipment and Service companies are often measures by equity per employee. a) True b) False

Exploration products O and B are being considered by ConocoPhillips. Both projects require an initial investment of $5,000,000 for two different oil fields. Both projects have a 10-year life and their NPV profiles are illustrated in the figure. Which of the projects is expected to have the largest cash flow in later years? a) Project B b) Project O c) Project B or O - they both give the same profile d) Flip a coin e) Get your palm read

In the ConocoPhillips Natural Gas Project, which of the following best summarizes the risks of the project? a) Overall, the two greatest risks in this business area are first - quantity, and second - risk. b) Overall, the two greatest risks in this business area are first - price, and second - quantity. c) Overall, the two greatest risks in this business area are first - price, and second - reputation. d) "In this business, we live and die on investment!"

Other things held constant, an increase in the cost of capital discount rate will result in a decrease in a project's IRR. a) True b) False

What are not directly reflected on an oil and gas company balance sheet? a) Assets b) Reserve Values c) Liabilities d) Stockholder's equity e) Net property, plant and equipment

What does this picture show us? a) Flatter distribution, smaller standard deviation, larger stand-alone risk. b) Flatter distribution, larger standard deviation, larger stand-alone risk. c) Flatter distribution, larger standard deviation, smaller stand-alone risk. d) None of the Above.

When analyzing drilling companies and that sector of the energy industry, rig count and utilization are not considered important to this sector. a) True b) False

Williams Companies Inc. is considering a natural gas project, which has the following cash flows. The cost of capital is 10%. What is the NPV of the project? Year Cash Flow 0 -$1,000 1 $400 2 $300 3 $500 4 $400 a) $600 b) $260 c) $300 d) $280 e) $240

______________ examines several possible situations, usually worst case, most likely case, and best case and also provides a range of possible outcomes. a) Sensitivity analysis b) Scenario analysis c) Monte Carlo Simulation d) Tornado diagrams e) None of the above

The following comprises the results of exploration efforts for an accounting year. These calculations help us understand why it is important to know the difference between successful efforts and full cost accounting. Under successful efforts accounting, how much of the exploratory wells cost will be expensed? A) $21,000 B) $19,000 C) $40,000 D) $0 E) None of the above

B) $19,000

Cowboy Energy is an oil and gas company that began operation in2014. Below is the drilling program late that year that will not begin production until 2015. At the beginning of 2015, Cowboy Energy has the following net investment by field, all located in the U.S. QUESTION: WHAT WILL BE THE DD&A RATE PER BARREL FOR THE WOODFORD FIELD FOR A COMPANY THAT USES SUCCESSFUL EFFORTS ACCOUNTING? Remember that DD&A stands for depreciation, depletion and amortization. HINT: THIS QUESTION IS FROM CHAPTER 8 AND EXHIBIT 8.2 HAS AN EXAMPLE OF THIS TYPE OF ANALYSIS. A) $15.71 B) $21.67 C) $22.35 D) $25.12 E) $28.33

B) $21.67

In the lecture, what does Dr. Simkins consider one the most important characteristics of a fuel source? This question comes from the lecture on Energy Economics. A) Environmental impact B) Energy Density C) Carbon content D) Sulfur content

B) Energy Density

This question is from the lectures over Unit 2 on Energy Economics (Chapter 3 of the textbook). Growth in world oil consumption is expected to be concentrated in OECD countries. This statement is: A) True B) False

B) False

Please complete the following statement with the best available answer. Income statements prepared with the _______ accounting method tend to be LESS conservative because certain costs are _________ rather than ________. A) Successful efforts/capitalized/expensed B) Full cost/capitalized/expensed C) Successful efforts/expensed/capitalized D) Full cost/expensed/capitalized

B) Full cost/capitalized/expensed

Refining and marketing is known collectively as ___________. A) Midstream B) No choice is correct C) Petrochemicals D) Upstream

B) No choice is correct

What is the name of the hydrocarbon that is C3H8? A) Pentane B) Propane C) I don't know! D) Methane E) Ethane F) Butane

B) Propane

What are not directly reflected on an oil and gas company balance sheet? A) Assets B) Reserve Values C) Liabilities D) Stockholder's equity E) Net property, plant, and equipment.

B) Reserve Values

Which type of accounting method (between SE and FC) is considered more conservative? A) Fair Cost B) Successful Efforts C) Full Cost D) Stockholder's Equity

B) Successful Efforts

Who caused the downturn of the oil industry that lasted almost ten years? This question comes from the lecture on Energy Economics. A) Donald Trump B) The Saudi oil minister C) The executive of OPEC D) Jimmy Carter

B) The Saudi oil minister

Students are required to introduce themselves on Brightspace in Discussions and this is worth 15 points. This needs to be done by the same time that Assignment 1 is due. True or false? A) False B) True C) We don't need to do this. (Do not choose this answer!)

B) True

Over time, electricity has been responsible for most of the energy consumption growth in the commercial sector due to the use of what? Hint: From Chapter 3 Energy Economics lecture. A) heating systems B) air conditioning C) natural gas cars D) electric vehicles E) cooking

B) air conditioning

Go to Robert Bryce's website at the link below and read the article, "Stop Subsidizing the Big Wind Bullies". Then answer the question. Here is the link: http://robertbryce.com/stop-subsidizing-big-wind-bullies/ (Links to an external site.). What is a subsidy miner? A) All of the choices are correct. B) A person, group, or firm that actively seeking money from government subsidies. C) A person, group, or firm that actively tries to remove government subsidies to make energy projects more competitive. D) None of the choices are correct. E) A person, group, or firm that actively seeking money from government subsidies from energy mining businesses.

B) A person, group, or firm that actively seeking money from government subsidies

Energy Dense fuels are not ideal for transportation fuel because they are too heavy to be carried in a standard vehicle. This question comes from the lecture on Energy Economics. A) True B) False

B) False

The ____ method provides for more stable earnings in periods of high exploration costs and unsuccessful exploratory drilling. From Chapter 8: Oil and Gas Accounting A) Full Cost and Successful Efforts B) Full Cost C) Successful Efforts D) Unsuccessful Efforts

B) Full Cost

How would you characterize Mr. Ori's position on climate change? This question comes from the Wall Street Journal titled: "Big Issues: Energy (A Special Report) — What Would Happen if the U.S. Banned Fracking?", Nov. 20,2019 A) He thinks that because the U.S. is the largest producer of greenhouse gases, a reduction in U.S. emissions will cut temperature increases. B) He thinks climate change is a serious problem but thinks a carbon tax is a better solution than a fracking ban. C) He thinks a fracking ban is a great idea to reduce greenhouse gases. D) He is a skeptic and doesn't believe humans cause climate change. E) None of the answers are correct.

B) He thinks climate change is a serious problem but thinks a carbon tax is a better solution than a fracking ban.

From the lectures on energy economics, what is something major that the Industrial energy section produces? This question comes from the lecture on Energy Economics. A) Biofuel B) Petrochemicals C) Coal D) Carbon

B) Petrochemicals

According to the author of Energy: Myths and Realities, the transition away from fossil fuel combustion to renewable energy sources will ___________. A) Unfold exponentially, with a shift completely away from fossil fuels taking places within a matter of a few years. B) Unfold as in the past, across decades and not years. C) Follow the path envisioned by former Vice President Al Gore. D) Follow the path envisioned by Boone Pickens.

B) Unfold as in the past, across decades and not years.

Why has propane usage remained strong in the residential sector while heating oil usage has declined? (From Ch. 3 Energy Economics) A) propane is more versatile than heating oil B) all of the above C) none of the above D) propane is ideal for rural residences E) propane has more uses in homes than heating oil

B) all of the above

How much oil flows through the Strait of Malacca each day? This is from the Midstream lecture. 12 million barrels 15 million barrels 8 million barrels 20 million barrels 17 million barrels

B. 15 mill

The first oil price shock was in ____, with the Arab oil embargo which caused an ______ in oil prices and shattered the consuming countries' complacency about supply security and prices. 1973, drop 1973, rise 1984, rise 1979, rise

B. 1973 Rise

Which of these is an advantage of horizontal (directional) drilling? A single vertical well can access more of the reservoir than a horizontal well. A greater portion of the reservoir is exposed to drilling horizontally versus vertically. Horizontal wells are technologically easier to drill than vertical wells. Horizontal drilling is less expensive than vertical drilling. None of these.

B. A greater portion of the reservoir is exposed to drilling horizontally versus vertically.

Which of the following does the second column remove in the fractionation process, as shown in the midstream lecture? CO2 C2H6 C2 CH4

B. C2H6

What is the reason that fracking or fracking related activities has been associated with earthquakes (seismicity)? Caused by disposal water injected too deep, into the producing zone Caused by disposal water injected too deep, into the producing zone (into the basement) Fracking or upstream activities are not associated with earthquakes (seismicity) Caused by oil and natural gas rushing to the surface and high volumes, leading to seismicity Caused by the explosives used when doing the fracking

B. Caused by disposal water injected too deep, into the producing zone (into the basement)

What are the 3 forms of fossil fuels? Coal, natural gas, and bitumens. Coal, natural gas, and petroleum. Coal, peat, and petroleum. Tyrannosaurus Rex, Ankylosaurus, and Velociraptor. coal, natural gas, and gasoline

B. Coal, Natural Gas, and Petroleum

In the lectures about the Energy Value Chain, according to Dr. Simkins, there is an energy arbitrage opportunity along the border of which two countries? Saudia Arabia and Kuwait Columbia and Venezuela Canada and the U.S Greece and Poland

B. Columbia and Venezuela

According to author Robert Bryce in Smaller, Faster, Lighter, Denser, Cheaper, which of the following is not part of Greenpeace's viewpoint? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Greenpeace wants to stop economic growth to save the planet. Greenpeace believes governments need to tax ecologically harmful industries. Greenpeace is antinuclear. Greenpeace opposes the use of hydrocarbons. Greenpeace wants to protect existing ecosystems.

B. Greenpeace believes governments need to tax ecologically harmful industries.

As shown in Figure 4-1b, which of the options below best describes how the average global per-capital consumption of primary energy has evolved over 1950 to 2010. This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. It is impossible to tell. It has increased over the time period. It has remained flat over the time period. All of the answers are correct. It has decreased over the time period due to efficiencies.

B. It has increased over the time period.

_________ is a term often used to describe the processing, storage and transportation sectors within the oil and gas industry. It defines the industry processes that occur between the upstream and downstream sectors. Petrochemicals Midstream Downstream Upstream

B. Midstream

Refining and marketing is known collectively as ___________. Midstream No choice is correct Upstream Petrochemicals

B. No choice is correct (Downstream)

Why were the 1980's an awful time in the oil business? The answer to this question is found in the lectures about the Energy Value Chain and Energy Economics lectures. Growing supply from the South Sea Some members of OPEC ramped up production Political unrest in Peru None of the above. All of the above

B. Some members of OPEC ramped up production

What is the author's opinion of Bill McKibben's Energy-Starvation Plan? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Only India has the current capabilities to pursue the Energy-Starvation Plan The plan is a prescription for economic suicide Solar and wind energy will provide a majority of global energy in the future The plan is a prescription for short-term economic drawbacks but long-term economic prosperity The mathematics supporting the plan support the plausibility of the plan

B. The plan is a prescription for economic suicide

What are the two leading global benchmark crude oils, including the location of the crude oil. West Texas Intermediate at Cushing, OK and Saudi Light (Saudi Arabia) West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK) WTI at Cushing, OK and Brent (Saudi Arabia) West Texas Intermediate at Henry Hub, LA and Brent in the North Sea (UK)

B. West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK)

______ is a market situation where prices are progressively lower in distance delivery months.

Backwardation

_______ is a market situation where prices are progressively lower in distance delivery months as the image illustrates. Hint: From the Midstream lecture.

Backwardation

____________ is a market situation where prices are progressively lower in distance delivery months.

Backwardation

_____________ is a market situation where prices are progressively lower in distance delivery months.

Backwardation

Compared to traditional pumped hydro projects, which of the following properties are the advantages of modern battery technologies? Note: This question is from the reading, " Heir to the Throne: Will Lithium Seize the Storage Crown?", NextEra Energyinsight, Oct. 02, 2019. Batteries are more modular and scalable. Using batteries are much cheaper than using traditional hydro energy in our daily lives. Batteries offer faster responsiveness and more flexibility to the grid. Batteries offer more than 93% of the existing grid-connected storage capacity in the country currently. Batteries are easier to site, permit and construct.

Batteries are more modular and scalable. Batteries are easier to site, permit and construct.

Why will the world keep burning coal?

Because the essentiality of electricity to modernity is incontrovertible. The countries that have cheap, abundant, reliable electricity are wealthier than the countries that don't.

Medium Crude has what API? <10 Between 22&30 >30 <22

Between 22&30

1,881,966

Bewcastle Oil Service Technologies is evaluating a new project that requires $1,200,000 in new equipment. Bewcastle estimates that the new project will generate $1,400,000 in annual sales at the end of each of the next four years and that total operating costs (variable and fixed costs excluding depreciation) will equal $600,000. Suppose that Bewcastle uses Modified Accelerated Cost Recovery System (MACRS) depreciation rates. The applicable rates are 33%, 45%, 15%, and 7%, respectively. The tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life? REMEMBER THAT THIS IS ASKING FOR THE ANNUAL OPERATING CASH FLOWS, NOT NPV

Futures prices are discovered by:

Bids and offers

Aubrey McClendon was compared to which of the former U.S. Presidents for his ability to make everyone feel like the most important person in the room?

Bill Clinton

In recent years, petroleum dropped from 97% of the total energy use in the transportation sector to 92.8%. This was due to an increase in the use of what?

Biofuels and Natural gas

Which renewable fuel is expected to provide the greatest percentage of our energy needs in 2040 in the US?

Biomass

Which renewable fuel is expected to provide the greatest percentage of our energy needs in 2040 in the us?

Biomass

What are the five types of renewable energy?

Biomass, hydropower, geothermal, wind, and solar.

Who wanted to hire those who "grew up poor and were disciplined by their parents, including corporal punishments?"

Bob Simpson

Which country was the first serious entry into making liquid fuels from plants for the energy industry? This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" China Netherlands USA Canada Brazil

Brazil

Which of the countries have the suitable conditions that can support a relatively large and profitable bio fuel industry? This question is from Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Canada USA India Australia Brazil

Brazil

Benchmark for the rest of the world...

Brent Crude North Sea

What colors are assumptions in the templates?

Bright Red

What is a btu?

British thermal unit. The amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit

Futures

Contract for future delivery of a commodity - exchange traded - physical delivery is possible but not required

Airline hedging against price increases "Input Price Risk"

Buy a call

If a refinery is trying to hedge using a collar strategy, which of the following strategies should be used?

Buy a call and sell a put

To hedge, an airline wants price protection from increasing prices. If they want to use energy options, they do the following:

Buy a call option

Airline constructing zero cost collar hedging against price increase

Buy a call, sell a put

An E&P company wishes to hedge using a collar strategy. Which of the following strategies should be used?

Buy a put and sell a call

E&P Company hedging "output price risk"

Buy a put option.

Zero cost collar for E&P company

Buy a put, sell a call

Chesapeake Energy Company uses a required return of 12.5% to evaluate most projects of average risk. Suppose the company is looking at a new energy project that is of lower-than-average-risk, and the CEO thinks the discount rate should be risk adjusted. What effect will this have on the project's NPV? a) Decrease NPV b) No effect on NPV c) Increase NPV d) NPV will double. e) None of the above answers are correct.

Gaylen Howe Oil Financing has a proposed project that has an initial investment of $277,000. The required rate of return is 8%. Cash flows at the end of years 1, 2, and 3 are $100,000, $200,000 and $150,000, respectively. What is the NPV of this project? a) $85,090 b) $89,555 c) $106,136 d) $296,615 e) $362,093

Proven reserves is the lowest reserves number and is the amount that the geologists have the highest level of being sure there is at least this amount of oil in the reserve formation. This is also known as ______________. [Hint: This question is from my lecture on "Capital Budgeting and Risk Analysis in the Oil and Gas Industry" lecture.] a) P10 b) P50 c) P90 d) Possible reserves

This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a: a) Tornado diagram b) NPV profile c) Spider diagram d) Scenario analysis e) None of the above

Which method is the following sentence talking about to estimate the reserves? " The lowest figure, the amount that the geologists are 90% sure is there (sometimes 95% is used which would be P95)" a) Probable or Proved + Probable b) Possible or Proved + Probable + Possible c) Proved or Proven d) None of the above

Which of the following options is a tangible risk? a) Commodity price risk; Credit Risk; Weather Risk. b) Reservoir risk; Engineering risk; Inflation. c) Financial risk; Insurance risk; Commodity price risk. d) Weather risk; Legal risk; Political risk. e) All of the above.

Which of the following questions can be answered by one of the reserve ratios in Chapter 9 (ratios 1-4)? a) How much does it cost to replace reserve? b) What value has been added? c) How long will reserves last? d) All of the above. e) None of the above.

Which type of ratios seek to answer the questions "How long will our reserves last at our current production rate if we don't replace them?," and "How are we replacing these reserves - drill bit or acquisition?" a) Valuation b) Liquidity c) Energy Specific d) Profitability

____________ is a computerized version of scenario analysis which uses continuous probability distributions. Using this technique, the computer selects values for each variable based on given probability distributions. a) Sensitivity Analysis b) Scenario Analysis c) Monte Carlo Simulation d) Spider Diagrams e) None of the above

What is ConocoPhillips Current Ratio in 2014 and is this a good current ratio? A) 1.15, yes because it is greater than 1 B) 1.26, yes because it is greater than 1 C) 1.31, yes because it should be greater than 1 D) 1.40, yes because it is greater than 1 E) none of the above

C) 1.31, yes because it should be greater than 1

C) 256.7 mm BOE

In the first two weeks of lectures, we discussed how energy consumption is measured quadrillion btus. We mentioned how we consume about 35 quadrillion btus in oil currently. Which if the following is the correct way to write this number? A) 35,000,000,000,000 B) No choice is correct C) 35,000,000,000,000,000 D) 35,000,000 E) 35,000,000,000

C) 35,000,000,000,000,000

Go to Robert Bryce's website at the link below and read the article, "Stop Subsidizing the Big Wind Bullies". Then answer the question. Here is the link: http://robertbryce.com/stop-subsidizing-big-wind-bullies/. What is a subsidy miner? A) All of the choices are correct. B) None of the choices are correct. C) A person, group, or firm that actively seeking money from government subsidies. D) A person, group, or firm that actively tries to remove government subsidies to make energy projects more competitive. E) A person, group, or firm that actively seeking money from government subsidies from energy mining businesses.

C) A person, group, or firm that actively seeking money from government subsidies.

Which of the following is a light sweet crude oil? A) API of 110 and 4% sulfur B) API of 30 and 1.5% sulfur C) API of 30 and 0.5% sulfur D) API of 20 and 1.5% sulfur E) API of 40 and 1.1% sulfur

C) API of 30 and 0.5% sulfur

What are hydrocarbons? A) An organic compound consisting of carbon and nitrogen. B) An organic compound consisiting of carbon, hydrogen, and oxygen. C) Any organic compound consisting only of carbon and hydrogen. D) Any organic compound.

C) Any organic compound consisting only of carbon and hydrogen.

What was the reason behind the energy consumption growth in the commercial sector in the 1950's? This question comes from the lecture on Energy Economics. A) Women entering the workforce after WWII B) People worked later hours C) Introduction of air conditioning D) The baby boom

C) Introduction of air conditioning

C) Midstream

What does Dr. Simkins say that the Industrial energy section produces? This question comes from the lecture on Energy Economics. A) Biofuel B) Coal C) Petrochemicals D) Carbon

C) Petrochemicals

Congratulations! You have just been hired by Refiners-R-Us. As part of your initial training, you have been asked to analyze two crude oils that they are considering for refining operations. Calculate the profit per barrel for each crude oil, Crude X and Crude Y. The costs of each crude oil and the refining costs are shown. What refining margin do you calculate for each crude oil and which crude oil would be the most profitable to refine? A) Refining margins are $1.00 per barrel for crude oil X and $0.50 per barrel for crude oil Y. Crude oil X is the most profitable to refine. B) Refining margins are $1.00 per barrel for crude oil X and $3.50 per barrel for crude oil Y. Crude oil Y is the most profitable to refine. C) Refining margins are $3.00 per barrel for crude oil X and $0.50 per barrel for crude oil Y. Crude oil X is the most profitable to refine. D) Refining margins are $0.50 per barrel for crude oil X and $3.00 per barrel for crude oil Y. Crude oil X is the most profitable to refine. E) Refining margins are $3.00 per barrel for crude oil X and $1.50 per barrel for crude oil Y. Crude oil X is the most profitable to refine.

C) Refining margins are $3.00 per barrel for crude oil X and $0.50 per barrel for crude oil Y. Crude oil X is the most profitable to refine.

According to Chapter 8 on Oil and Gas Accounting, information must be disclosed in financial statements by oil and gas companies. Which of the following is information that is not required to be disclosed? A) Quantification of proved oil and gas reserves in the U.S. B) Annual production and related information for reserves C) Reserves of oil and gas that are classified as unproven. D) Capitalized costs associated with producing activities E) Standardized measures for discounted cash flow analysis of proved reserves.

C) Reserves of oil and gas that are classified as unproven.

From the Robert Bryce video. Which of the following are points that Robert Bryce makes in the video?

C) Scale The Big Fib - We cannot run the world on renewable energy. Density is Green -- It allows us to do more with less. Top of the Second Inning - the shale revolution is the most important change in the energy sector since the East Texas field discover. N2N - Natural gas to nuclear -- Natural gas and Nuclear are the way of the future.

In the syllabus lecture and about me, Dr. Simkins explained why she is referred to as an "Ex Con". What is the reason? A) She worked for Converse shoes in the past and people who worked for them are referred to as "Ex Cons". B) She worked in upstream before becoming a professor. This name is a short name for crude oil and people who have worked in upstream. C) This is a name given to people who worked for Conoco in the past. She worked for them too. D) She has 3 children, all ex-cons. E) She served time but claims she is still innocent of why she was locked up for six years.

C) This is a name given to people who worked for Conoco in the past. She worked for them too.

Exams need to be taken through an approved proctor. True or False? A) False B) There are no exams in this class. C) True

C) True

Consumption amongst non-OECD countries can be described how over the recent 15 years? (From Ch. 3 Energy Economics) A) an exponetially growing amout of consumption (i.e., more than doubling every year). B) growth that was halted by the 2008 recession and then proceeding to decline steadily C) an almost linear trend upward D) fairly flat with little growth E) no choice is correct

C) an almost linear trend upward

What is one of the most used indicator of industrial activity in the upstream (which also impacts the oilfield and equipment sector) part of the oil and gas industry? A) refining capacity B) seismic surveys C) rig count D) storage E) production trees

C) rig count

According to the lecture, when did coal overtake wood as the primary fuel source in the United States? This question comes from the lecture on Energy Economics. A) 1900 B) 1860 C) 1880 D) 1850

C) 1880

C) 1973, rise

Over time, electricity has been responsible for most of the energy consumption growth in the commercial sector due to the use of what? Hint: From Chapter 3 Energy Economics lecture. A) electric vehicles B) heating systems C) Air Conditioning D) cooking natural gas cars

C) Air Conditioning

Go to Robert Bryce's website at the link below and read the article, "Stop Subsidizing the Big Wind Bullies". Then answer the question. Here is the link: http://robertbryce.com/stop-subsidizing-big-wind-bullies/ (Links to an external site.). Which US firm is the biggest recipient of subsidies based on ACENY's roster? A) Subsidy Tracker B) Reynold's Group C) NextEra Energy D) Alliance for Clean Energy New York E) None of the choices are correct.

C) NextEra Energy

What is considered the world's first true synthetic fiber? A) The glue on 3M Post-it Notes. B) PVC C) Nylon D) polyethylene

C) Nylon

Which of the internal strategies have energy firms used in an industry downturn?

Capital Expenditure cuts and Reduce SG&A

Using the image provided about U.S. Energy Consumption in 2018, answer the following question: What is rejected energy? A) I have no idea! B) This is the energy that is still in the system and has not been used yet. C) Rejected energy is part of the energy of a fuel that could be used for a purposeful activity, like making electricity or transport. This energy is lost heat. One example: For a coal fired power station, for instance, about 2/3 of the energy released when the coal is burnt is discarded as heat in the environment. D) This is energy that is bought but it was decided not to use it. For example, if you bought extra propane cylinders to use with your grill and some are stored (not used yet), that would be part of rejected energy.

C) Rejected energy is part of the energy of a fuel that could be used for a purposeful activity, like making electricity or transport. This energy is lost heat. One example: For a coal fired power station, for instance, about 2/3 of the energy released when the coal is burnt is discarded as heat in the environment.

What are not directly reflected on an oil and gas company balance sheet? A) Assets B) Net property, plant, and equipment. C) Reserve Values D) Stockholder's equity E) Liabilities

C) Reserve Values

Which country consumes the most oil? This question comes from the lecture on Energy Economics. A) China B) Mexico C) U.S.A D) India

C) U.S.A

Three primary reference refining margins are: A) Cushing, Northwest Europe and Singapore B) US Gulf Coast, Northwest Europe and Saudi Arabia C) US Gulf Coast, Northwest Europe and Singapore D) US Gulf Coast, Northwest Europe and Dubai

C) US Gulf Coast, Northwest Europe and Singapore

According to the API reading (Powering Past Impossible), since 2010 a 1% rise in global GDP has typically generated a ____ % increase in energy demand. Choose the best answer. 2% 6% 0.6% 0% 0.4%

C. 0.6%

As discussed in the lecture video, from 2008 to 2015, what was the percentage change in U.S. production of crude oil and liquids? 25 percent 46 percent 88 percent -12 percent None of these.

C. 88 percent

In 1978, who wrote in Scientific American that "the supply of oil will fail to meet increasing demand before the year 2000"? This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. Colin Campbell Richard Duncan Andrew Flower M. King Hubbert L.F. Ivanhoe

C. Andrew Flower

What are hydrocarbons? An organic compound consisiting of carbon, hydrogen, and oxygen. An organic compound consisting of carbon and nitrogen. Any organic compound consisting only of carbon and hydrogen. Any organic compound.

C. Any organic compound consisting only of carbon and hydrogen.

What energy has changed human society the most since the nineteenth century? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Gas Wind energy Electricity Solar energy Diesel

C. Electricity

Whats the difference between Iso and normal Butane? Normal has 6 carbon atoms compared to Iso only having one Iso has isolated Helium atoms Iso has a carbon atom that branches off Normal is not used

C. Iso has a carbon atom that branches off

According to what person, did they say that the end of the oil era in the near future will bring "the inevitable doomsday" to be followed by "economic implosion," which will make "many of the world's developed societies look more like today's Russia than the U.S."? This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. Colin Campbell Jean Laherrere L.F. Ivanhoe Kenneth Deffeyes Richard Duncan

C. LF Ivanhoe

Who owns the majority of hydrocarbon assets in the world? This is from the API reading. Publicly traded companies Major Oil Companies, i.e. Shell, Exxon-Mobil, etc. National Governments U.S. government Bill Gates

C. National Governments

Who in his acceptance speech for the Binneial OPEC Awards in 2006 concluded that today's peak-oilers, much like their predecessors, will soon proved wrong; that the present contribution of oil and natural gas to the global total primary energy supply will decline only modestly by 2050; and while natural gas will become the leading fossil fuel, the oil industry at the end of the twenty-first century will still be larger than it was in 2003. This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. Khalid Al-Falih Rex Tillerson Peter Odell Richard Nehring Addalla Salem El-Badri

C. Peter Odell

The October 1973 Embargo and the production effects of Iranian Revolution followed by the last 1970s Iran-Iraq war had a similar effect on oil prices. What was this effect? steep decline in prices none of the choices is correct prices more than doubling small stable increases in price negligible effect on prices

C. Prices more than doubling

As discussed in the lecture video, which of the following technologies did not contribute to the shale boom during the 2008-2015 period? Multi-well pads All of these are correct. Radiography Hydraulic fracturing Directional drilling

C. Radiography

Which of the following is not proof that technologies are raising living standards? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Increased access to online education have expanded educational access. Technology has increased the discovery and utilization of new and valuable natural resources. The rapid decline in the stock of natural resources. The increase in average wealth caused by the push towards smaller faster lighter denser and cheaper technology. Technology has led to the production of more productive and specialized tools.

C. Rapid Decline in the stock of natural resources

What did Dr. Simkins say about Hurricane Harvey? OPEC raised oil prices Weather did not affect oil prices The crack spread increased rapidly The refineries were able to keep up with oil demand

C. The crack spread increased rapidly

Which of the following does not represent an improvement in living standards discussed in this section? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". The invention of satellite television has led to increased access and globalization for millions of people. Women's rights, freedom, and education levels has increased. There is now a real need to reduce our consumption levels. Expanded high-speed low-cost internet connectivity. The combination of hybrid seeds, better pest control methods and more accurate applications of fertilizers allow farmers to produce more food.

C. There is now a real need to reduce our consumption levels.

Which of the following is not an example of a quest for Smaller Faster Lighter Denser Cheaper discussed in the book? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Printing press Diesel and jet turbine Vacuum cleaner Telescope and microscope Haber-Bosch process

C. Vacuum Cleaner

What does Boone Pickens NOT liked to be called? BP Oil Man Tar Man Rich

C. tar man

What is Ethane

C2H6

What is Propane

C3H8

What is Butane

C4H10

What is Methane

CH4

Which of the following does the first column remove in the fractionation process, as shown in the midstream lecture?

CH4

What are renewable energy sources? (Hint: Refer back to my introductory lecture.)

Calculate the NYMEX 3:2:1 crack spread on a per barrel basis. WTI is $96.50/Bbl. Gasoline is $3.05 per gallon. Heating oil is $3.22 per gallon. Answer: $33.98/Bbl...how??

To hedge price risk of jet fuel, an airline can use which of the following derivatives to hedge price risk?

Call Option

To hedge price risk of jet fuel, an airline can use which of the following derivatives to hedge price risk?

Call option

________ gives the owner the right but not the obligation to purchase the commodity at a fixed strike price.

Call option

_________ gives the owner the right but not the obligation to purchase the commodity at a fixed strike price.

Call option

To hedge price risk of jet fuel, an airline can use which of the following derivatives to hedge price risk?

Call option - on test

______ gives the owner the right but not the obligation to purchase the commodity at a fixed strike price

Call option.

3 characteristics of a good reservoir...

Cap rock Porosity Source rock

What is the reason that fracking or fracking related activities has been associated with earthquakes (seismicity)?

Caused by disposal water injected too deep (into the basement)

What was the name of the company based in Enid that became the Nation's largest privately held,"Integrated Energy Company", or one that does everything from exploring and producing oil to refining and selling it?

Champlin Refinery Company

Increase NPV

Chesapeake Energy company uses a required return of 12.5% to evaluate most projects of average risk. Suppose the company is looking at a new energy project that is of lower-than-average-risk, and the CEO thinks the discount rate should be risk adjusted. What effect will this have on the project's NPV?

According to a press release (29 Feb. 2016) by the American Wind Energy Association (AWEA), the U.S. is the number one producer of electricity generated by wind power. What country is number two? China Russia Germany Japan None of these are correct.

China

Which of the following countries used the greatest % of coal in 2014 for electric power generation?(Note : This question is from the lecture over the Electric Power Industry.) China U.S. Germany Norway France Vietnam Australia Canada Saudi Arabia

China

What company's energy risk management disaster stunned Asian markets by disclosing it had lost $550 million on oil derivatives trades, when the company was suppose to be hedging?

China Aviation Oil

What company's energy risk management disaster stunned Asian markets by disclosing it had lost $550 million on oil derivatives trades, when the company was suppose to be hedging? (Hint: from the reading "The 10 biggest energy risk management disasters of the past 20 years".)

China Aviation Oil

What company's energy risk management disaster stunned Asian markets by disclosing it had lost $550 million on oil derivatives trades, when the company was supposed to be hedging?

China Aviation Oil

In the 1600s, Japanese feudal lords sold their rice for future delivery in a market called ____ under contracts that protected them from bad weather or warfare

Cho-ai-mai

What provided most of the US energy needs by the early 1900s? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. Coal None of these Natural gas Petroleum Wood

Coal

What are the 3 forms of fossil fuels?

Coal, natural gas, and petroleum

What are the 3 forms of fossil fuels?

Coal, natural gas, and petroleum.

In the lectures about the Energy Value Chain, according to Dr. Simkins, there is an energy arbitrage opportunity along the border of which two countries?

Columbia and Venezuela

What are tangible Risks?

Commodity Price Risk (Oil and Gas) Reservoir Risk Credit Risk Inflation Financing & Insurance risks Construction Risk

Companies A and B are independent oil and gas producers. Company 1 is one of the largest and most fully developed independent exploration and production (E&P) companies in world. It has operations all over the world including unconventional, deep-sea projects. Company 2 has been growing quickly since its initial public offering in 2007. The company has worked to leverage all financial capacity to pursue its aggressive growth strategy. A larger share of this company's production is oil than for the first company. All of Company 2's production comes from the contiguous United States.

Company A is Company 2 and Company B is Company 1

Companies C and D are integrated energy companies. Company 1 is one of the largest, most fully developed companies in the world and has been called the best-run oil company in the world by a prominent investment banker. This company has been able to use profits from operations to continue to grow. Company 2 is one of the largest publicly traded oil companies in the world and has a government owning a majority of the company. Both companies have global operations, however, company 2 with a government owner is focused more in its home country and produces a much higher percentage of oil than the non-government controlled company. The host country of this company has been subject to economic sanctions, which has lowered the value of local currency. This company has been aggressively replacing reserves by more conventional means than company 1 has.

Company C is Company 1 and Company D is Company 2

Companies E and F are small publicly traded E&P companies. "Small Cap" means that they have smaller capitalization (i.e., smaller market value of equity). Company 1 is a Permian basin pure play company based out of Fort Worth, TX. This company focuses on the Wolfcamp shale oil resource play located in the Permian Basin where it has the greatest operating, technical and regional expertise. Company 2, on the other hand, is headquartered in Calgary, Alberta and has significant operations in the Western Canadian Sedimentary Basin, which is known for natural gas and oil sands. Company 2 also has significant operations with unconventional drilling in the Eagle Ford shale play.

Company E is Company 2 and Company F is Company 1

Companies G and H are Master Limited Partnerships (MLPs). MLPs have an asset intensive, strategic infrastructure and generally attractive distribution yields. Company 1 focuses on midstream gathering and processing assets as well as interstate pipelines. This company is a mid-sized MLP that has been able to focus on developing efficiencies. Company 2 has stretched itself financially to make acquisitions and grow into one of the largest MLPs in the US. Its business operations include pipelines, gathering and processing, liquefaction of natural gas, and marketing operations.

Company G is company 2 and Company H is company 1

Companies I and J are oilfield service companies. Company 1 is one of the largest oilfield service companies in the world with operations in over 80 countries. Even though it is already one of the largest service companies in the world, there are talks about a potential merger with another industry giant. Company 2, on the other hand, is a mid-sized company based out of Oklahoma City with all operations focused on US land based E&P customers operating in unconventional resource plays. Recently, this company was spun-off as a subsidiary of a large E&P company to become an independently traded oilfield services company. Investors have developed concerns about the new business due to the disarray surrounding the new company and the continued dependence on its former parent company as a customer. Company 2 is also structured as an MLP.

Company I is Company 1 and Company J is Company 2

Companies K and L are utility companies headquartered in North America. Company 1 has been named to Fortune's list of the "World's Most Admired Companies" for its commitment to sustainability and community responsibility. It is unique among hybrid-generator utilities in that most of its unregulated generation is sold under long-term contracts and not in competitive markets. This company has been able to attract customers that desire a more environmentally friendly energy provider. It appears that the company may have some difficulty meeting short-term obligations. Company 2 was originally founded as an energy trading company but is now an electric utility company that owns and operates a number of power stations in the US. In recent years, this company has drastically increased the size of its balance sheet and power-generation capacity. As it continues to grow, management is struggling to make decisions about unprofitable business units.

Company K is Company 1 and Company L is Company 2

What template can you use to find "all the information available on the website for one company"? Hint: one of the first templates discussed

Company Tearsheet

In 2014, which of the following is true regarding ConocoPhillip's EBITDA to Capital Expenditures ratio?

ConocoPhillips did not outspend their earnings as measured by EBITDA to capital expenditures in 2014 because the ratio is 1.08.

With this merger, a brand new company is formed and both companies are bought and combined under the new entity.

Consolidation Merger - on test

_______ is a market situation where prices are progressively higher in distance delivery months as the image illustrates. Hint: From the Midstream lecture.

Contango

Convert natural gas in mcf to BOE: 1000.2 mmmcf/6mcf = 166.7 mmBOE. Put in millions. Add to the 90 mmBOE oil = 166.7 + 90 = 256.7mm BOE.

31.6

2,509,641

_____________ involves the simultaneous purchase of a crude oil futures contract and the sale of gasoline and/or heating oil futures contracts.

Crack Spread trade

_______ involves the simultaneous purchase of a crude oil futures contract and the sale of gasoline and/or heating oil futures contracts.

Crack spread trade

_____________ involves the simultaneous purchase of a crude oil futures contract and the sale of gasoline and/or heating oil futures contracts.

Crack spread trade

___________ involves the simultaneous purchase of a crude oil futures contract and the sale of gasoline and/or heating oil futures contracts.

Crack spread trade - on test

What did Edmond Becquerel do? Created the first photovoltaic cell at age 19. None of these are correct. Built a solar cooking device. Built the first electric car. Developed the hypothesis explaining the photoelectric effect.

Created the first photovoltaic cell at age 19.; Developed the hypothesis explaining the photoelectric effect.

Reserve Life Index =

Crude Oil Reserves/Crude Oil Production

A major storage and transportation hub is located in what city in Oklahoma?

Cushing

Worlds Largest Refiner

Exonn

A project by Zach Branstetter Oil Exploration has an initial investment of $300,000. Cash flows at the end of years 1, 2, and 3 are $100,000, $200,000 and $150,000, respectively. What is the payback period for the firm's project? Calculate the "plain payback", not the discounted payback. a) 1.1 years b) 1.6 years c) 1.9 years d) 2.0 years e) 2.2 years

Assume that upon receiving your recommendation to accept a new energy project, the CEO says the project is riskier than you've assumed in your analysis and directs you to make adjustments to take into account the perceived increased riskiness. The most logical and likely reaction will be to a) Decrease all your forecasted sales amounts b) Increase all your forecasted depreciation c) Decrease the required rate of return d) Increase the required rate of return e) Go to your office, close the door, and have a good cry

Benchmarking is important when: a) Investing b) Doing an internal company analysis c) Considering employment d) All of the above

Bewcastle Oil Service Technologies is evaluating a new project that requires $1,200,000 in new equipment. Bewcastle estimates that the new project will generate $1,400,000 in annual sales at the end of each of the next four years and that total operating costs (variable and fixed costs excluding depreciation) will equal $600,000. Suppose that Bewcastle uses Modified Accelerated Cost Recovery System (MACRS) depreciation rates. The applicable rates are 33%, 45%, 15%, and 7%, respectively. The tax rate is 40%. If the projects required return is 11%, what is the total present value of the annual operating cash flows received over the project's four-year life? a) $1,861,467 b) $1,841,467 c) $1,951,467 d) $1,881,966

From the diagram below, we can estimate what percentage of the observations (simulation results) occur with a NPV >0? a) Around 30% to 50% b) Around 50% to 70% c) Around 70% to 90% d) Around 90% or higher e) I have no idea.

From the diagram, which of the following can we conclude? a) We are about 77% confident that the discounted payback will be greater than 2.5 years. b) We are about 23% confident that the discounted payback will be greater than 2.5 years. c) We are about 50% confident that the discounted payback will be greater than 2.5 years. d) We are about 77% confident that the discounted payback will be less than 2.5 years.

Kelsey Neel Commercial Oil Supply is considering an investment project, which has the following cash flows. The company's cost of capital is 10%. What are the project's payback, IRR, and NPV? Year Cash Flow 0 -$1,000 1 $400 2 $300 3 $500 4 $400 a) Payback = 2.4, IRR = 10.00%, NPV = $600 b) Payback = 2.4, IRR = 21.22%, NPV = $260 c) Payback = 2.6, IRR = 21.22%, NPV = $300 d) Payback = 2.6, IRR = 21.22%, NPV = $260 e) Payback = 2.6, IRR = 24.12%, NPV = $300

The project that Williams undertook that I describe in the "Capital Budgeting and Risk Analysis in the Oil and Gas Industry" lecture is: a) Dominion b) Pioneer c) Mount Rushmore Tower d) Devil's Tower e) None of the above

What does "risk" mean in capital budgeting? a) Uncertainty about a project's future profitability b) Measured by standard deviation of NPV, standard deviation of IRR, beta. c) Will taking on the project increase the firm's and stockholders' risk? d) All of the above

What energy ratio gives an estimate of the cost to replace reserves through the "drill bit"? a) Production Ratio b) Reserve Life Index c) Reserve Replacement Ratio d) F&D Reserve Replacement Ratio e) Value Added Ratio

Which of the following expressions about the current ratio is true? a) Calculated by dividing current assets by current liabilities. b) Shows how well the company is able to meet short-term financial obligations. c) Higher ratio is better and indicates greater liquidity. d) All of the above. e) None of the above.

Which of the following is NOT a potential problem or limitation of financial ratio analysis? a) Comparison with industry average is difficult if the firm operates many different divisions. b) Season factors can distort ratio. c) The use of different accounting and operating practices can distort comparisons. d) Ratios are rigid, black and white measures that always send a clear message to the financial analyst.

Which of the following reasons is not a reason as to why sensitivity analysis is useful? a) Gives some idea of stand-alone risk. b) Helps identify dangerous variables. c) Gives some breakeven information d) Gives probabilities of of various possible outcomes e) All of the above are advantages of sensitivity analysis.

Which population distribution method only needs two parameters-- min and max? a) Lognormal b) Normal c) Triangular d) Uniform e) None of the above

Which ratio tells us the costs of adding reserves in relation to the value of those reserve added? a) Reserve life index b) F&D reserve replacement ratio c) Reserve replacement ratio d) Value added ratio e) Value or proved reserve additions f) Lifting costs ratio

Which ratios seek to answer the question "Do we have the right amount of assets for the level of sales?" a) Liquidity b) Dividend c) Profitability d) Asset Management

What are the two leading global benchmark crude oils, including the location of the crude oil. A) WTI at Cushing, OK and Brent (Saudi Arabia) B) West Texas Intermediate at Henry Hub, LA and Brent in the North Sea (UK) C) West Texas Intermediate at Cushing, OK and Saudi Light (Saudi Arabia) D) West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK)

D) West Texas Intermediate at Cushing, OK and Brent in the North Sea (UK)

Cowboy Energy is an oil and gas company that began operation in2014. Below is the drilling program late that year that will not begin production until 2015. At the beginning of 2015, Cowboy Energy has the following net investment by field, all located in the U.S. QUESTION: WHAT WILL BE THE DD&A RATE PER BARREL FOR A COMPANY THAT USES FULL COST ACCOUNTING? Remember that DD&A stands for depreciation, depletion and amortization. HINT: THIS QUESTION IS FROM CHAPTER 8 AND EXHIBIT 8.2 HAS AN EXAMPLE OF THIS TYPE OF ANALYSIS. A) $15.71 B) $21.67 C) $22.35 D) $25.12 E) $28.33

D) $25.12

According to the lecture when did coal overtake wood as the primary fuel source in the United States? This question comes from the lecture on Energy Economics. Inc A) 1850 B) 1860 C) 1900 D) 1880

D) 1880

D) 1973, rise

Energy Conversion: 90,000 barrels of oil is approximately equal to what amount of mcf (thousand cubic feet of natural gas): Hint: 1 bbl = 6 mcfe A) 15,000 mcfe B) 5,400 mcfe C) 540 mcfe D) 540,000 mcfe E) 540,000 mcfe

D) 540,000 mcfe

Why does Dr. Simkins value energy? This question comes from the lecture on Energy Economics. A) Energy is a profitable industry that has always produced stable profits B) Energy is the reason we get to have air conditioning C) If there wasn't energy we wouldn't get to watch The Office D) Energy gives us better and longer lives

D) Energy gives us better and longer lives

What energy ratio gives an estimate of the ability to replace reserves through the "drill bit"? A) Production ratio B) Reserve life index C) Reserve replacement ratio D) F&D reserve replacement ratio E) Value added ratio

D) F&D reserve replacement ratio

Which of the energy ratios tells us how much it costs to produce oil? A) Reserve life index B) Finding cost ratio C) Reserve replacement cost ratio D) Lifting cost ratio E) Value added ratio

D) Lifting cost ratio

What is the major component of natural gas? A) Emissions by people B) Ethane C) Propane D) Methane E) I don't know! Don't choose this one!

D) Methane

Where is oil found? A) Open structures underground such as caverns and underground lakes B) Granite deposits C) Coal bed methane D) The void spaces in rocks

D) The void spaces in rocks

An oil and gas firm that uses the ___method is subject to more restrictive impairment test requirements than if the firm used the ___method. A) successful efforts; full cost B) All of the above are correct C) I have no idea. D) full cost; successful efforts

D) full cost; successful efforts

Please complete the following statement with the best available answer. Income statements prepared with the _______ accounting method tend to be LESS conservative because certain costs are _________ rather than ________. A) Successful efforts/expensed/capitalized B) Successful efforts/capitalized/expensed C) Full cost/expensed/capitalized D) Full cost/capitalized/expensed

D) Full cost/capitalized/expensed

Which of the following choices best describes Craig Pirrong's view in the article: "Proponents of a Fracking Ban Are Seriously Fracked Up", by Craig Pirrong, Nov. 20, 2019. A) Auto emissions are a large part of the CO2 problem. B) All of the answers are correct. C) Well-designed government policy is the best way to handle fracking in the U.S. D) If fracking was banned in the U.S., oil prices would increase dramatically. E) The European strategy to reduce CO2 by forcing the replacement of gasoline engines with diesel was a successful strategy. F) None of the answers are correct.

D) If fracking was banned in the U.S., oil prices would increase dramatically.

Which of the following is a light sweet crude oil? API of 40 and 1.1% sulfur API of 110 and 4% sulfur API of 20 and 1.5% sulfur API of 30 and 0.5% sulfur API of 30 and 1.5% sulfur

D. API of 30 and 0.5% sulfur

What is the author's opinion on primitive harmony discussed in Part I? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Primitive harmony is important for the sustainable growth of economy. It is unclear what the results of primitive harmony would be. We need more neo-Malthusians. It is time to discard the idea of primitive harmony. The popularization of primitive harmony is important.

D. It is time to discard the idea of primitive harmony.

What shale plays are the main drivers of growth in total U.S. shale gas production across most states? This is from the API reading. Permian Basin and Marcellus Bakkan and Utica Barnett and Marcellus Marcellus and Utica Eagle Ford and Permian Basin

D. Marcellus and Utica

What is the major component of natural gas? Ethane I don't know! Don't choose this one! Emissions by people Propane Methane

D. Methane

What is one of the most used indicator of industrial activity in the upstream (which also impacts the oilfield and equipment sector) part of the oil and gas industry? storage refining capacity seismic surveys rig count production trees

D. Rig Count

Which US sector is responsible for the largest petroleum consumption? Hint: From the Ch. 3 Energy Economics lecture. Commercial Electric Residential Transportation Industrial

D. Trasportation

What are the 3 sectors of the Oil and Natural Gas industry? In other words, what are the sectors of the energy value chain. Upstream, downstream, up a stream without a paddle Refining, pipeline, and compression Exploration, production, and marketing Upstream, midstream, and downstream

D. Upstream, midstream, and downstream

Consumption in non-OECD countries has changed in what way over the past 15 years? (From Ch. 3 Energy Economics) growth that was halted by the 2008 recession and then proceeding to decline steadily an exponetially growing amout of consumption (i.e., more than doubling every year). fairly flat with little growth an almost linear trend upward declining because of efficiencies

D. an almost linear trend upward

T/F: Standard cost-of-carry models do a good job of characterizing energy forward curves.

False

At the end of 2008, which country was far ahead in installed wind generating per-capita capacity? (This question can be answered by reading Chapter 7: Electricity from Wind) Spain Finland Germany Netherlands Denmark

Denmark

Jeff Patterson has a solar panel energy savings project, which has the following cash flows. The cost of capital is 10 percent. What is the project's discounted payback period? Year Cash Flow 0 -$245,454 1 $100,000 2 $100,000 3 $150,000 4 $40,000 5 $25,000 a) 1.88 years b) 2.00 years c) 2.33 years d) 2.48 years e) 2.64 years

Finding Costs Ratio =

Exploration Cost/Extensions and Discoveries

The project that Williams undertook that I describe in the "Capital Budgeting and Risk Analysis in the Oil and Gas Industry" lecture is:

Devil's Tower

What is the name of the Williams project?

Devil's Tower

What type of fuel has the highest BTU per volume?

Diesel

What type of fuel has the highest BTU per volume? Hint: From the Ch. 3 Energy Economics lecture.

Diesel

The Bloomberg illustration shows ConocoPhillips and industry peers. Which of the companies shown has the best Organic Reserve Replacement? This is like the F&D reserve replacement ratio from my lectures. a) ConocoPhillips b) Noble Energy c) Anadarko d) Marathon Oil e) Murphy Oil f) Occidental Petroleum

Basis Risk

Different price movements in different commodities due to quality differences, timing to delivery, and locational differences

Which of the following is not a result of the invention of the Roller-Cone drill bit?

Directly led to accidents like the Deepwater Horizon accident in 2010.

Which of the following is not a result of the invention of the Roller-Cone drill bit? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Made gasoline and other refined oil products cheaper. Intensified commute times. Made gasoline and other refined oil products more abundant. Directly led to accidents like the Deepwater Horizon accident in 2010. Fostered suburban sprawl, and air pollution.

Directly led to accidents like the Deepwater Horizon accident in 2010.

What are the 3 stages of refining...?

Distillation, conversion, Treatment

Primary refining units fall into 3 processing categories: ___________ is a physical separation process that does not alter the molecular structure of hydrocarbons. __________ which involves cracking and non-cracking of hydrocarbon molecules, and may involve heat, pressure and catalysts __________________ is the final stage and may involve adding MTBE to gasoline to increase the octane level.

Distillation; conversion processes (cracking and non-cracking); treatment and blending

In evaluating project risks in the energy industry, which of the risks listed below is considered an "intangible risk", and is not a "tangible risk"? [Hint: This question is from the presentation on Capital Budgeting and Risk Analysis in the Oil and Gas Industry.] a) Commodity price risk b) Reservoir risk c) Credit risk d) Inflation e) Weather

Swaps

Exchange of cash flows - no physical delivery - not exchange traded

Fill in the bank: How do you download the CIQ Excel plug-in? Fill in the following series: My Capital Iq > _____________ >

Downloads

In petroleum industry, refining and marketing is known collectively as ___________

Downstream

Peter Parker works for a company that refines and sells oil. What kind of company is this?

Downstream

Peter Parker works for a company that refines and sells oil. What kind of company is this? Mr. Stark I don't feel so good about this upcoming test Midstream Upstream Downstream

Downstream

The photo (of a gas station illustrates the ____________ segment of the oil and gas industry.

Downstream

The photo illustrates the ____________ segment of the oil and gas industry. (Picture of Gas Station)

Downstream

A major disadvantage of the payback period method is that: a) Is useless as a risk indicator b) Ignores cash flows beyond the payback period c) Does not directly account for the time value of money d) All of the above e) Only B and C are correct

The Bloomberg illustration shows ConocoPhillips and industry peers. Which of the companies shown has the best reserve replacement ratio (not the organic reserve replacement)? a) ConocoPhillips b) Noble Energy c) Anadarko d) Marathon Oil e) Murphy Oil f) Occidental Petroleum

Which of the following statements is not important to financial statement analysis? a) Statement of Stockholders' Equity b) Income Statement c) Balance Sheet d) Statement of Cash Flows e) All Statements are important for financial statement analysis

Williams is considering the following project and is computing the IRR. The firm has a cost of capital of 10%. What is the IRR for this project? Year Cash Flow 0 -$1,000 1 $400 2 $300 3 $500 4 $400 a) 10.22% b) 18.95% c) 20.22% d) 24.45% e) 21.22% f) 24.12%

Your company, Aaron McIntire Energy Enterprises, is considering the following project. The cost and cash flows are listed below. Use a 10% cost of capital. What is the MIRR of the project? Year Cash Flow 0 -$2,000 1 $200 2 $600 3 $800 4 $1,400 a) 11.50% b) 12.00% c) 11.70% d) 12.50% e) 13.10%

Which of the following types of costs must be disclosed annually, regardless of whether the costs are capitalized or charged to expense when incurred. A) Property Acquisition Costs B) Exploration Costs C) Development Costs D) (1) and (2) E) All of the above.

E) All of the above.

Who owns the majority of hydrocarbon assets in the world? This question is from the Unit 1 lectures. A) Bill Gates B) Publicly traded companies C) Major Oil Companies, i.e. Shell, Exxon-Mobil, etc. D) U.S. government E) National Governments

E) National Governments

An energy transition _______________________________. Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. A) is the doubling of microprocessor performance every two years with ensuing price declines. B) I have no idea. C) is the time it takes for an energy to reach maturity and start declining. D) is recent promises, forecasts, and visions of the eminent and profound difference to be made by new energy conversions. E) encompasses the time that elapses between the introduction of a new primary energy source and its rise to claiming a substantial share of the overall market.

E) encompasses the time that elapses between the introduction of a new primary energy source and its rise to claiming a substantial share of the overall market.

How many discussion posts do you need to make this semester and how many points in total are they worth? Note: See the syllabus for details on what types of discussion posts count, how much they are worth, and other requirements. 1000, a million points 10, 35 points 5, 25 points 8, 40 points 7, 35 points

E. 7, 35 points

Who patented an explosive devise in 1865 to stimulate oil well? Aubrey McClendon Nick Steinsberger None of these. Prof. Simkins Edward Roberts

E. Edward Robert

The first commercial hydraulic fracturing jobs, in 1949, were performed by which company? Mitchell Energy None of these. The Tulsa Drillers ConocoPhillips Halliburton

E. Halliburton

Who is the world's largest natural gas producer? Iraq Saudi Arabia China Kuwait United States

E. MURICA

Which of the following are considered pivotal instruments of the scientific revolution? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". Printing press Power plant Digital-communications Diesel and jet turbine Telescope and microscope

E. Telescope and Microscope

The natural gas producing Barnett Shale is located in which state? North Dakota Oklahoma None of these. Pennsylvania Texas

E. Texas

See the discussion post about "OPEC and Non-OPEC Alliance could be formalized" in the folder for Comments about Current Events. Read the article (link provided in post) and answer the question: Which of the following statements best describe the message of the article? None of the choices are correct. The UAE oil minister, al-Mazrouei, is disappointed with the OPEC and non-OPEC partnership is working and has concerns if the agreement will last until April. The UAE oil minister, al-Mazrouei, is impressed at how well the OPEC and non-OPEC partnership is working, particularly with production data showing a high level of compliance to the agreement. However, he is concerned that Iraq is cheating on production quotas. All of the choices are correct. The UAE oil minister, al-Mazrouei, is impressed at how well the OPEC and non-OPEC partnership is working, particularly with production data showing a high level of compliance to the agreement.

E. The UAE oil minister, al-Mazrouei, is impressed at how well the OPEC and non-OPEC partnership is working, particularly with production data showing a high level of compliance to the agreement.

What takes place in upstream

Exploration and Production

Antero Resources

EQT has a LaTeX: \frac{TEV}{Total\:Revenues\:LTM\:-Latest} T E V T o t a l R e v e n u e s L T M − L a t e s t equal to 2.1x. There is one other company in EQT's Comps with the same trading multiple. What is the name of that company? TEV=Total Enterprise Value (Market) = Market Cap less Net Debt. Hint: This is a question to test your knowledge of using Capital IQ.

Decreased $495MM.

EQT has a capital structure that has a revolving credit facility that the principle due ____________ from 2017 to 2018. Hint: This is a question to test your knowledge of using Capital IQ. Correct!

Why is a barrel 42 gallons...?

Early days... field to rail... lightly sealed 50 gallon barrels... Rockefeller estimated about 8 gallons lost

Which of the following made lighting cheaper?

Edison's Pearl Street plant

Which of the following made lighting cheaper? Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper". The Haber-Bosch process Diesel engines Roller-Cone drill bit GEnx-IB Edison's Pearl Street plant

Edison's Pearl Street plant

Who patented an explosive devise in 1865 to stimulate oil well?

Edward Roberts

Who was the first person to drill oil in the USA in 1859?

Edwin L. Drake

Who was the first person to drill oil in the USA in 1859? (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

Edwin L. Drake

In the late 19th Century, three technologies competed to power the automobiles of the future. The three technologies were:

Electric, steam, and gasoline

What energy has changed human society the most since the nineteenth century?

Electricity

Options

Exchange traded options are options on futures contracts only

In the lecture on Chapter 3, what was discussed as one of the most important characteristics of a fuel source?

Energy Density

In the lecture, what does Dr. Simkins consider one the most important characteristics of a fuel source?

Energy Density

_______ is the cleanest, quickest and most cost-efficient way to extend today's energy supply in the future.

Energy efficiency

Why does Dr. Simkins value energy?

Energy gives us better and longer lives

Energy is neither created or destroyed and In a closed system, heat energy tends toward randomness

Rejected energy encompasses which of the following? select all that apply.

Energy lost to inefficiency Energy lost to the resistance in wiring Heat loss in machine usage

What prices are among the most volatile of all commodities?

Energy prices

______ exhibit higher volatilities than virtually any other commodity.

Energy prices

What are renewable energy sources?

Energy sources that can be replenished over and over again; they are never depleted (usually converted into electricity or thermal energy)

Which town in being referenced as "one of the last Leave It to Beaver towns where everyone knows each other"?

Enid

If Helix anticipates earning $10 million in EBITDA this year, then how much would be the equity value of Helix, using a private company discount of 20% in EV/EBITDA multiple?

Equity value of $65.2 million for Helix

Ethane

In the following NGL fractionation process (inside red box), which of the following best fill in the "blank" in the green blank box?

Ethane

What is C2H6?

Ethane

What is the most important natural gas liquid (NGL) as a feedstock to the petrochemical industry? Hint: This is from the Midstream lecture.

Ethane

Which natural gas liquid is used to make the base chemical, ethylene?

Ethane

Which of the following best fill in the "blanks" in the green blank box and grey blank box?

Ethane, Ethylene

Ethane when cracked is...

Ethylene

Three specific petrochemicals from Stage 1 form the foundation of the industry. This is from the lecture on petrochemicals. These three petrochemicals are:

Ethylene, propylene =, and benzene

Three specific petrochemicals from Stage 1 form the foundation of the industry. This is from the lecture on petrochemicals.

Ethylene, propylene, and benzene

Three specific petrochemicals from Stage 1 form the foundation of the industry. This is from the lecture on petrochemicals. These three petrochemicals are: natural gas, oil, and coal ethylene, naptha, and NGLs LLDPE, HDPE, and PET Olefins and aromatics Ethylene, propylene, and benzene

Ethylene, propylene, and benzene

Three specific petrochemicals from Stage 1 form the foundation of the industry. This is from the lecture on petrochemicals. These three petrochemicals are:

Ethylene, propylene, and benzene

Three specific petrochemicals from Stage 1 form the foundation of the industry. This is from the lecture on petrochemicals. These three petrochemicals are

Ethylene, propylene, and benzene

An API well number can have up to 14 digits divided by dashes as follows:

Example: 42-501-20130-03-00[4] The "42" means that this well is located in "State Code" 42 which is Texas. The "501" means that this well is located in "County Code" 501 which is Yoakum County. The "20130" is a "Unique Well Identifier" within the county. The "03" is the "Directional Sidetrack Code" for wells that have been sidetracked. The "00" is the "Event Sequence Code" to indicate how many operations have taken place

What are the advantages of simulation analysis? a) Reflects the probability distributions of each input. b) Shows range of NPV's, the expected NPV's, NPV, and CVNPV. c) Gives an intuitive graph of the risk situation. d) A and B e) A and C f) A, B, and C

Which of the following is not one of the 5 Basic Rules of Thumb in choosing probability distributions? a) If you have relevant data, then use it! Then utilize distribution-fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate. b) Does the variable you are modeling only assume discrete values? If so, use discrete distributions. c) Select distributions that fit the wisdom of experts from whom you get parameter estimates. d) If there is a theoretical reason for selecting a particular distribution, then certainly do so. e) Use the KISS principle! (Keep it Simple, Stupid!) f) All of the choices listed are correct. None of the choices listed are correct.

What energy ratio gives an estimate of the ability to replace reserves through the "drill bit"?

F&D Reserve Replacement Ratio

What energy ratio gives an estimate of the ability to replace reserves through the "drill bit"?

F&D reserve replacement ratio

F) 3.4%

A zero-cost collar is completely costless during the hedging period

FALSE Only costless the second you execute it --> Trades happen every nanosecond

Between 1990 and 2015, natural gas systems' methane emissions have ____ by ____ even though natural gas production rose by more than 50%. fallen; 8% increased;y 60% fallen; 0% fallen; 16.3%

Fallen 16.3%

A good valuation provides a precise estimate of value.

False

A larger size and more diverse business will not help energy firms move into higher credit categories. True or False?

False

A larger size and more diverse business will not help energy firms move into higher credit rating categories.

False

A market is said to be "liquid" when it has a low level of trading activity and open interest. True or False

False

According to the article entitled, "Myths and Facts on Wastewater Injection, Hydraulic Fracturing, Enhanced Oil Recovery, and Induced Seismicity," by Rubinstein and Mahani (Seismological Research Letters, 2015), hydraulic fracturing is the primary cause of the large change in seismicity that has been observed in the U.S.

False

According to the article, Craig Pirrong believes that moving the power sector to 100% renewable energy is a realistic target. This question is from the reading: "Proponents of a Fracking Ban Are Seriously Fracked Up", by Craig Pirrong, Nov. 20, 2019. True False

False

According to the result from the Recoverability Test, there should be NO impairment for Field A based on this test

False

Colonel Drake did the first commercial drilling for oil in 1859. It was approximately 50 years before the US used more oil than coal as a source of energy. True or False? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. True False

False

Energy Dense fuels are not ideal for transportation fuel because they are too heavy to be carried in a standard vehicle.

False

Energy Dense fuels are not ideal for transportation fuel because they are too heavy to be carried in a standard vehicle. This question comes from the lecture on Energy Economics. True False

False

From the API reading, Powering Past Impossible. Growth in world oil consumption is expected to be concentrated in OECD countries. This statement is:

False

Gasoline engines with spark-ignition systems are more efficient than diesel engines.

False

Gasoline engines with spark-ignition systems are more efficient than diesel engines. Note: This question comes from pages 1-66 of the book, "Smaller Faster Lighter Denser Cheaper".

False

George Mitchell said " There's more gas than you think in the Barnett...The prize is bigger''. (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

False

Growth in world oil consumption is expected to be concentrated in OECD countries. True False

False

Growth in world oil consumption is expected to be concentrated in OECD countries. This statement is:

False

Growth in world oil consumption is expected to concentrated in OECD countries.

False

In OECD countries, consumption has recovered to a level equal to that prior to the recession in 2008. (From Ch. 3 Energy Economics and updated class lecture)

False

In OECD countries, consumption has recovered to a level equal to that prior to the recession in 2008. (From Ch. 3 Energy Economics and updated class lecture) True False

False

In OECD countries, consumption has recovered to a level equal to that prior to the recession in 2008. (From Ch. 3 Energy Economics and updated class lecture) True False

False

In relative valuation, the more quantitative a model, the better the valuation

False

In relative valuation, the more quantitative a model, the better the valuation.

False

In relative valuation, the more quantitative a model, the better the valuation. (Note: From the relative valuation lecture.)

False

In the case of primary energy supply, the time span needed for significant market penetration is mostly a function of financing, developing, and perfecting necessarily inexpensive infrastructures. True False

False

Ivanhoe is the patron saint of peak-oilers, considered an infallible and prescient seer because, as we are repeatedly reminded, he correctly predicted the peak of U.S. oil production in 1970

False

Ivanhoe is the patron saint of peak-oilers, considered an infallible and prescient seer because, as we are repeatedly reminded, he correctly predicted the peak of U.S. oil production in 1970 This question is from Chapter 4: Running Out: Peak Oil and Its Meaning, from Energy Myths & Realities. True False

False

McClendon and Ward seized on a plan: If they could lock up wells throughout the country already producing natural gas, and then employ fracking and other improved techniques to extract additional gas from their acreage, a historic fortune could be theirs.

False

Moore's Law is the observation that the number of transistors in a dense integrated circuit doubles approximately every five years. Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. True False

False

Natural Gas is a heavy hydrocarbon that comes from the compressed remains of plants and animals. (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46)

False

Nuclear fission is the process that powers the sun. True False

False

Other things held constant, an increase in the cost of capital discount rate will result in a decrease in a project's IRR.

False

Robert Bryce is a proponent of wind energy and believes it is one of the solutions to our future energy needs. True or False?

False

Standard cost-of-carry models do a good job of characterizing energy forward curves. (Hint: From the Energy Derivatives reading.)

False

T/F: A larger size and more diverse business will not help energy firms move into higher credit rating categories.

False

T/F: Other things held constant, and increase in the cost of capital discount rate will result in a decrease in a project's IRR.

False

Which of the following is an example of oil prices that are in contango?

Figure B

In the picture of the probability Density mound, (0, E, NPV) what does it show us?

Flatter distribution, larger standard deviation, larger stand-alone risk.

What does the picture show us?

Flatter distribution, larger standard deviation, larger stand-alone risk.

What is the process of breaking up rock formation by pummeling rocks with various liquids,creating pathways for natural gas to flow to the surface, known as ? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46)

Fracking

Which of the following countries was the largest user of nuclear energy (in % of sources) in 2014 for electric power generation? (Note : This question is from the lecture over the Electric Power Industry.) China U.S. Germany Norway France Vietnam Australia Canada Saudi Arabia

France

Who discovered the photovoltaic effect?

French Physicist Edmond Becquerel

Why do they call it Slickwater

Friction reducers

The ____ method provides for more stable earnings in periods of high exploration costs and unsuccessful exploratory drilling.

Full Cost

The ____ method provides for more stable earnings in periods of high exploration costs and unsuccessful exploratory drilling. From Chapter 8: Oil and Gas Accounting

Full Cost

The ____ method provides for more stable earnings in periods of high exploration costs and unsuccessful exploratory drilling. From Chapter 8: Oil and Gas Accounting Successful Efforts Full Cost Full Cost and Successful Efforts Unsuccessful Efforts I give up and have no idea!

Full Cost

The ceiling test is required by the SEC for the cost of oil and gas properties on the balance sheet. The recorded capitalized costs for producing oil and gas properties are limited to the net present value of the reserves discounted at 10%. This is the SEC value of reserves or standard measure. If the SEC value of reserves falls below the capitalized costs on the balance sheet, a ceiling write-down occurs. This ceiling test limitation is of greater concern for companies using which of the accounting methods?

Full Cost

Income statements prepared with the _______ accounting method tend to be LESS conservative because certain costs are _________ rather than ________.

Full cost/capitalized/expensed

From the diagram showing the risk exposures of a project risks that impacts the NPV, the following project has the greatest risk exposure that is a "positive risk exposure" to which factor? In other words, which risk factor increases the project NPV the most as the risk factor increases?

Gas price

_______ is a process of converting natural gas into a liquid form. This process also chemically changes the natural gas to a longer chain molecule that is a middle distillate such as diesel fuel.

Gas to liquids (GTL)

This question is from Dana Murphy's presentation on Feb. 22, 2016 (guest speaker that was recorded and video & slides posted to D2L). What was her undergraduate degree in and from where?

Geology, OSU

What was Dana Murphy's undergraduate degree in and from where?

Geology, OSU

As discussed in the lecture, which actor famously posed with his new electric automobile? This question is from the chapter about electric cars.

George Clooney

Go to Capital IQ and look up the credit rating for ConocoPhillips (COP). What is the S&P issuer credit rating for the long-term in the local currency (not foreign) as of November 19, 2018 for COP? Hint: Go to the "Tearsheet" in the "Company Summary" on the left-hand toolbar when you log into Capital IQ and have ConocoPhillips pulled up. Then scroll down in the tear sheet and look for information on the S&P Global Credit Ratings.

Which of the followings is right about Google's cheaper-than-coal plan? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". Google had almost no experience in the energy sector at that time Google is the best firm to research on it The optimism lasted more than ten years Google didn't spend enough money on it Google thinks no other institution is better positioned than itself to take this research to the next level

Google had almost no experience in the energy sector at that time

Who owns the majority of hydrocarbon assets in the world?

Governments

According to author Robert Bryce in Smaller, Faster, Lighter, Denser, Cheaper, which of the following is not part of Greenpeace's viewpoint?

Greenpeace believes governments need to tax ecologically harmful industries.

where is the William's project located?

Gulf of Mexico

Walmart bags are made of...?

HDPE High Density Poly Ethylene

The first commercial hydraulic fracturing jobs, in 1949, were performed by which company?

Halliburton

Who has been referred in this statement" He was just another good, hard working guy who was grinding it out and making money. No one accused him of genius...The smart money would have bet against him,not on him."

Harold Hamm

Who wanted to discover enough crude to leave a mark on the nation and even the world?

Harold Hamm

Who was being referred to in this statement" He acted tough, talked with an Okie accent, and used the wrong words... he didn't sound smart unless you really listened to him, and then you realized he was brilliant".

Harold Hamm

What was the job which led Harold to think" Holy cow, this is what I want to do"

Hauling water to oil and gas drilling sites

What is the name of the pattern we observe in the natural gas forward curve?

Head and shoulders pattern

Who was a great promoter of ethanol, and his famous Model T could run on gasoline, ethanol, or a mixture of the two fuels? This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Steve Jobs William Durant Charles Duriya Henry Ford Todd Sneller

Henry Ford

A light sweet crude will have a __________ API and _________ percent of sulfur

Higher; lower

_____________ occurs when two companies that are in direct competition and share the same product lines and markets merge.

Horizontal Merger - on test

Chokepoint where the greatest volume of oil flows through is...?

Hormuz (17)

What Questions do Ratios 1-4 answer?

How long will a reserve last? What percentage of reserves is produced? How are reserves replaced, and how much of reserves that were produced have been replaced?

What Questions do Ratios 5-7 answer?

How much does it cost? how much does it cost to replace reserves either through drilling operations or buying reserves on Wall Street? How much does it cost to produce reserves?

Do you know the terminology...? (Hydraulic fracturing)

Hydraulic fracturing (also fracking, fraccing, frac'ing, hydrofracturing or hydrofracking) is a well stimulation technique in which rock is fractured by a pressurized liquid.

Technology breakthroughs that made the energy boom possible in the US...

Hydraulic fracturing, directional drilling, multi-well pads and slickwater

A technique to stimulate oil or natural gas wells by using pressurized liquid to break up rock formations, creating pathways for oil or natural gas to flow (or be pumped) to the surface is known as:

Hydraulic fracturing.

A technique to stimulate oil or natural gas wells by using pressurized liquid to break up rock formations, creating pathways for oil or natural gas to flow (or be pumped) to the surface is known as: Hydraulic fracturing. Seismic tearing. Catalytic cracking. Formation breaking.

Hydraulic fracturing.

Which two of the following renewable energy sources provide the most net generation in the U.S.? Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. Hydro Wind Solar Biofuels Geothermal

Hydro Wind

Which of the following is one of the disadvantages of Lithium-ion batteries? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". If they get fully discharged, they are ruined Too heavy It's a potent neurotoxin They can explode They can catch fire

If they get fully discharged, they are ruined

Which of the following is not one of the 5 Basic Rules of Thumb in choosing probability distributions?

If you have relevant data, then use it! Then utilize distribution fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate. Does the variable you are modeling only assume discrete values? If so, use discrete distributions. Select distributions that fit the wisdom of experts from whom you get parameter estimates. If there is a theoretical reason for selecting a particular distribution, then certainly do so. Use the KISS principle! (Keep it Simple, Stupid!) (All of the choices listed are correct.)

Impairment

Impairment exists when the carrying amount (capitalized costs) of a property exceeds its fair value.

Finding Cost Ratio

In $'s, Lower is better

Reserve Replacement Ratio

In $'s, Lower is better, it is higher for full cost vs. successful efforts

Yes, this statement summarizes the author's opinion.

In Chapter 7 of the text book (How Our Political Views Affect Our View of Energy Prices), survey participants were asked to identify the factors influencing energy pricing. Does following statement correctly summarize the author's (Sheridan Titman) conclusion? It's not surprising that Democrats tend to distrust large corporations and that Republicans tend to think that regulation does more harm than good. However, a casual evaluation of the recent political discourse suggests that politicians, in their pandering to the world view of their base, slant information in ways that reinforce misperceptions. Democracy requires an educated and informed electorate. A political process that encourages misinformation can't be a good thing.

False

In Chapter 7 of the text book (How Our Political Views Affect Our View of Energy Prices), survey participants were asked to identify the factors influencing energy pricing. Regardless of political party, most respondents believe that government regulation had the most impact on energy prices.

These poll participants had it exactly backwards. Supply and demand are the most important determinants of energy prices but the poll participants thought the most important factors were first, the pricing power of energy companies and/or electric utilities and second, global politics.

In Chapter 7 of the text book (How Our Political Views Affect Our View of Energy Prices), survey participants were asked to identify the factors influencing energy pricing. Which of the following choices best explains any misperceptions the poll paricipants have?

Democrats and Republicans are equally misinformed, but misinformed in very different ways. Democrats tend to believe that the pricing power of energy firms has the most important impact on energy prices while Republicans tend to believe that regulation has the most impact.

_____ are a share of the cash distribution paid by the MLP partnership, which gradually increases as the partnership increases the cash distributions.

Incentive distribution rights

_________ are a share of the cash distribution paid by the MLP partnership, which gradually increases as the partnership increases the cash distributions.

Incentive distribution rights

Weather

False

In relative valuation, the more quantitative a model, the better the valuation. (Note: From the relative valuation lecture.)

Overall, the two greatest risks in this business area are first - price, and second - quantity.

In the ConocoPhillips Natural Gas Project, which of the following best summarizes the risks of the project? This question is about the mini-case from Unit 5 work. Correct!

Increase the required rate of return

Increase the required rate or return

From Robert Bryce video: Over the last decade, if the US would have reduced C02 emissions to 0, global C02 emissions would have done what over the same decade?

Increased by 7%

Which country was not listed in The Committee of Protect Journalists' List of the Ten Most Censored Countries in 2012?

India

Which country was not listed in The Committee of Protect Journalists' List of the Ten Most Censored Countries in 2012? India Iran North Korea Cuba Syria

India

Which of the followings is not correct about Intel? Note: This question comes from pages 67-170 of the book, "Smaller Faster Lighter Denser Cheaper". Intel was able to produce 2,300 billion transistors in 2011 From 1971 to 2011, the per-transistor price for Intel's microprocessors dropped by a factor of 50,000 Intel the world's leader in nanotechnology The company has helped make transistors ubiquitous The push for smaller faster cheaper has made Intel into a $120 billion company

Intel was able to produce 2,300 billion transistors in 2011

What was the reason behind the energy consumption growth in the commercial sector in the 1950's?

Introduction of air conditioning

From the diagram showing the impact on NPV of different risk factors, which risk factors have a negative impact on NPV? In other words, which risk factors hurt the project NPV (decrease it) as the risk factor increases?

Investment, required return, and decline rate

According to Dr. Simkins lecture on wind energy in the US, which state is "chomping on the heels" of Oklahoma in terms of wind energy capacity? Iowa Texas Kansas California Nebraska

Iowa

According to the U.S. Wind Industry Annual Market Report 2017, published by the American Wind Energy Association (AWEA), wind energy generates more than 30% of the total electrical capacity in four states. These states are: Iowa, Kansas, Oklahoma, & South Dakota Iowa, Kansas, Oklahoma, & North Dakota Iowa, Kansas, Oklahoma, & Texas California, Iowa, Kansas, & Oklahoma No of these are correct.

Iowa, Kansas, Oklahoma, & South Dakota

What are the fracking issues for the Video...?

Is Fracking Safe? -Contamination of aquifers -Large quantity of water used -Potentially hazardous chemicals -Waste water disposal -Earthquakes

Whats the difference between Iso and normal Butane?

Iso has a carbon atom that branches off

A variant of a particular chemical compound that differs in the number of neutrons in the nucleus is known as a(n) __________.

Isotope

As shown in Figure 4-1b, which of the options below best describes how the average global per-capital consumption of primary energy has evolved over 1950 to 2010.

It has increased over the time period.

What is the author's opinion on primitive harmony discussed in Part I?

It is time to discard the idea of primitive harmony.

Why does oil energy still persist even though it has been called "yesterday's energy" for more than a century?

It persists because of continuing innovation that allows drillers to produce more oil and gas and do so Faster Cheaper.

Which of the followings is not correct about ENIAC (Electronic Numerical Integrator and Calculator)

It required less power than MANIAC (Mathematical and Numerical Integrator and Computer)

Which of the followings is not correct about ENIAC (Electronic Numerical Integrator and Calculator) It required less power than MANIAC (Mathematical and Numerical Integrator and Computer) When it was first switched on, ENIAC had the highest real power density of any electronic machine on the planet It was designed and built by US military It is the world's first general-purpose electronic computer It could perform 5,000 additions or 400 multiplications per second

It required less power than MANIAC (Mathematical and Numerical Integrator and Computer)

When evaluating the production replacement ratio, what value should the company strive to meet over time for the ratio?

It should be greater than 100%

Which of the following about refining is true? Select all that apply

Its part of downstream The process of changing crude oil into petroleum products The process of marketing and selling petroleum products

2.64 years

Jeff Patterson has a solar panel energy savings project which has the following cash flows: Year Cash Flow 0 -$245,454 1 100,000 2 100,000 3 150,000 4 40,000 5 25,000

Who said " With traditional drilling it's like a door-to-door salesman, most people say no and then you get a yes once in a while"? (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

Jerry Box

What month and year did the price reach this historic high?

July, 2008

Who said this quote "I felt like the only person in the country who knew how much gas was in the shale"?

Kent Bowker

What energy deal is the largest in the energy sector since Exxon took over Mobil Oil in 1999? [Hint: This is from my lectures in Unit 6.]

Kinder Morgan

What energy deal is the largest in the energy sector since Exxon took over Mobil Oil in 1999.

Kinder Morgan (KMI) acquisition of Kinder Morgan Energy Partners, KM Management LLC and El Paso Pipeline Partners

What energy deal is the largest in the energy sector since Exxon took over Mobil Oil in 1999?

Kinder Morgan (KMI) acquisition of Kinder Morgan Energy Partners, KM Management LLC and El Paso Pipeline Partners.

L.F. Ivanhoe

Natural gas can be cooled to -260 degrees F to form a liquid, which enables it to be shipped via tanker. This form of natural gas is known as:

LNG

Congratulations - You have just landed a new job in the finance department at a chemical company in Texas (yes - I've had students get jobs in this industry and work in the finance department!) Your new boss asks you to hedge natural gas price risk for their power generation needs. [Yikes! You now wish you had paid more attention to Dr. Simkins when she covered this topic in class!] Your firm has not hedged in the past and last year, the board of directors became concerned and told management to start hedging at least 25% of commodity price risk for natural gas. Your boss wants you to hedge using 1000 natural gas futures contracts (which is at least 25% of your natural gas needs) for July. It is now February 15th and the cash (spot) price for natural gas is $3.00 per mmbtu. The July futures contract for natural gas is $2.90 per mmbtu. Use the July contract to hedge. Go long or short the required number of futures contracts. On July 15th, you close out the futures position at $3.47 per mmbtu (i.e., the futures price to offset your position) and purchase the natural gas in the spot market. Natural gas cash prices are $3.32 per mmbtu on July 15th. Answer the following questions: A. IS THIS A LONG OR SHORT HEDGE? B. WHAT IS THE NET PURCHASE PRICE OF NATURAL GAS TAKING INTO ACCOUNT THE CASH PURCHASE PRICE AND FUTURES GAIN OR LOSS? Hint: This question is similar to Question 10 in Chapter 16.

LONG, $2.75

IS THIS A LONG OR SHORT HEDGE?

LONG, $2.75

Which of the energy ratios tells us how much it costs to produce oil?

Lifting cost ratio

P90, P50, P10...

Likelihood of oil being in the well. P90 being most risky, P10 being the least

In midstream petroleum industry, LNG is known as:

Liquefied Natural Gas

What does LNG stand for?

Liquified Natural Gas

Which type of energy has the dominant leading role of deployment in the battery market from 2013 to 2018 according to information shown in Figure 3? Note: This question is from the reading, " Heir to the Throne: Will Lithium Seize the Storage Crown?", NextEra Energyinsight, Oct. 02, 2019. Flow-Vanadium Sodium Chemistries Lead-Acid Lithium-Ion Flow-Zinc

Lithium-Ion

Which kind of battery dominates the world of consumer electronics?Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". Lithium-ion Lead acid Sodium-sulfur Nickel Cadmium Nickel-Metal Hydride

Lithium-ion

Which of the following statements is CORRECT? The 3 most common distributions used in Monte Carlo simulation are:

Lognormal, triangular, and uniform

What makes crude oil "sweet"?

Low Sulfur

Lifting Cost Ratio

Lower is better, indicates efficiency

____ are partnerships that trade on public exchanges or markets and trade in the form of units.

MLPs

______ are partnerships that trade on public exchanges or markets and trade in the form of units.

MLPs - on test

What shale plays are the main drivers of growth in total U.S. shale gas production across most states? This is from the API reading.

Marcellus and Utica

The figure illustrates a business form (see the box called Phillips 66 Partners LP) that trades on a public exchange where 90% of the qualifying revenue is due to natural resource activities. This business form is very important to the energy industry and is a way to raise capital where the parent company still controls the assets. This was discussed in the Midstream lecture.

Master Limited Partnership

What is MLP...?

Master Limited Partnership

The picture illustrates which of the following terms? (Hint: From my Powerpoint lecture on Intro to Risk Mgmt in the Oil and Gas Industry.)

Mean reversion

The picture illustrates which of the following terms?

Mean reversion - on test

Which of the following statements is correct?

Mean reversion in energy prices is a way to model in which prices are expected to revert to a mean value over time.

CH4

Methane

Major component of natural gas?

Methane

The hydrocarbon CH4 is known as

Methane

What is CH4?

Methane

What is the major component of natural gas

Methane

What is the major component of natural gas?

Methane

What is the major component of natural gas? A) Propane B) Ethane C) Methane D) Emissions by people

Methane

Fertilizer is made primarily from which feedstock into the chemical industry?

Methane (natural gas)

Fertilizer is made primarily from which feedstock into the chemical industry? Methane (natural gas) Naptha Ethane Propane Benzene

Methane (natural gas)

Fastest growing sector of the energy value chain...

Midstream

Since 2006, what has been the fastest growing sector of the oil and gas industry

Midstream

What part of the value chain performed best from the spin-offs by ConocoPhillips, Williams, and Marathon?

Midstream and Downstream

Dana Murphy: Which oil/gas formation produces the most water in Oklahoma from oil and gas drilling per shale well?

Mississippian

This question is from Dana Murphy's presentation on Feb. 22, 2016 (guest speaker that was recorded and video & slides posted to D2L). Which oil/gas formation produces the most water in Oklahoma from oil and gas drilling per shale well?

Mississippian

____ is a computerized version of scenario analysis which uses continuous probability distributions and hundreds of "scenarios" -- that is, simulations. Using this technique, the computer selects values for each variable based on given probability distributions.

Monte Carlo Simulation

____________ is a computerized version of scenario analysis which uses continuous probability distributions and hundreds of "scenarios" -- that is, simulations. Using this technique, the computer selects values for each variable based on given probability distributions.

Monte Carlo Simulation

What did Bill Stevens told Mitchell Energy board members about the Barnett Shale? (Note : This question is from the book" The Frackers" and can be answered by reading pages 47-90)

Moose pasture land

Murphy Oil

The Bloomberg illustration shows ConocoPhillips and industry peers. Which of the companies shown has the best reserve replacement ratio (not the organic reserve replacement)?

Murphy Oil

What are the following...? NGLS LPG LNG CNG GTL

NGLS = Natural Gas Liquid LPG = Liquefied Petroleum Gas LNG = Liquefied Natural Gas CNG = Compressed Natural Gas GTL = natural Gas to Liquids

Does fracking hurt the ground water...?

One of the most well-known crack spreads is the:

NYMEX 3:2:1

What are the two major futures exchanges in the world?

NYMEX and ICE Futures (formerly, IPE)

According to the U.S. Wind Industry Annual Market Report 2017, published by the American Wind Energy Association (AWEA), which state added wind power capacity at a rate faster than any other state (51% increase)? New Mexico Kansas Texas California No of these are correct.

New Mexico

Which exchange had the first modern exchange traded energy futures contract and what was the year?

New York Cotton Exchange in 1971

Which exchange had the first modern exchange traded energy futures contract and what was the year?

New York Cotton Exchange in 1971 - on test

What was the name of Chesapeake's first well drilled on June 27,1989 in Grady County, Oklahoma?

Newby 1-1 well

Which US firm is the biggest recipient of subsidies based on ACENY's roster?

NextEra Energy

Do Standard cost-of-carry models do a good job of characterizing energy forward curves?

Can wind energy meet all of U.S's energy needs

No because in the article U.S number one in the world in wind energy production they state that American wind power is well on its way to supplying 20 percent of U.S. electricity by 2030.

Are electric cars really green? Why or Why not?

No because the only way electric cars could reduce global carbon emissions would be if all the additional electricity needed to power them came from carbon-free energies

Refining and marketing is known collectively as

No choice is correct

Refining and marketing is known collectively as ___________.

No choice is correct

Forward

No exchange traded - bilateral - physical delivery

Is it possible to construct a zero cost collar? If so, what call option do you sell? List the strike price and premium.

No, it is not possible

Linn Energy is hedging their crude oil production and you have been instructed to implement the hedging program. Your supervisor, Bill Shanahan, has instructed you create a zero-cost collar, if possible, that gives price protection for a minimum of $104.00 per barrel based on the put strike price (a floor price) for the crude oil you are selling. Is it possible to construct a zero cost collar? If so, what call option do you sell? List the strike price and premium. Use the NYMEX crude oil call and put information in the Appendix of Chapter 16 to answer this question. Remember to use "Prior Settle" as the option premium in the Appendix.

No, it is not possible

The Bloomberg illustration shows ConocoPhillips and industry peers. Which of the companies shown has the best Lifting Cost ratio (5 year average)?

Noble Energy

Which petrochemical feedstock (hint: think of a natural gas liquid) is the most important, #1, to the petrochemical industry. Which is #2?

None of the answers are correct

Which energy is the only low-carbon footprint option that is readily available on a gigawatt -level scale? This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. Natural Gas Coal Wind Hydro-electric Nuclear Power

Nuclear Power

Which complexes, centered on large nuclear plants and located in coastal desert areas, were to produce energy for the desalinization of sea water, synthesis of fertilizers, industrial activity, and intensive crop cultivation that would make desert habitable? This question is from Chapter 2: Nuclear Electricity will be too cheap to meter. Thermoplexes Shoppplexes solar park Hydroplexes Nuplexes

Nuplexes

What is considered the most profitable product that DuPont has ever had?

Nylon

What is considered the world's first true synthetic fiber?

Nylon

What is considered the world's first true synthetic fiber? The glue on 3M Post-it Notes. polyethylene PVC Nylon None of these are correct.

Nylon

Worlds first true synthetic fiber...

Nylon

Worlds 1st synthetic fiber was? Is the industry cyclical and if so, what drives this?

Nylon, Yes

Can you calculate the crack spread...?

Nymex 3-2-1 3 Crude makes 2 Gasoline and 1 Barrel of Diesel Example... 3*40=120 2*(1.28*42)=107.52 1*(1.16*42)=48.72 Revenues - Cost Gas + Diesel - Crude = Per 3 Barrels

OECD versus non-OECD demand...

OECD countries have not recovered to the pre-2008 levels. Non-OECD consumption over the past 15 years is a linear upward trend.

Which of the following plants were incorrectly thought by some to be able to liberate poor countries from dependence on imported oil? This question is from Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Kundzu Vines None of the choices Poppy seeds Kelp Oil palm and Jatorpha

Oil palm and Jatorpha

What just wants to have fun...?

Olefins (double bonds) or Ethylene

On the Capital IQ webpage, while researching a specific company, what would you click to see transactions related to that company?

On the left side of the page there is subtitle specifically for transactions. Under the transaction subtitle, one can click on M&A/Private Placements, Public Offerings, Takeover Defense, or Transaction Advisors and find transaction summaries for each of these topics.

On the Capital IQ webpage, while researching a specific company, what would you click to see the company's 10-K filings?

On the left side, there are many links under financials/valuation and all will present the 10-k. Once one of the links are clicked, the top of the page will allow one to download that certain page, financials, and then the 10-k. That is the easiest way to download the 10-k.

Describe how the pumped-storage hydropower (PSH) system work, using the following figures as reference.

On windy days, surplus power can be used to pump water from low to high altitude reservoirs. This water is in return released to create power. This is used when demand levels are high, but wind levels are low. This cycle can be repeated over and over again.

What is an angstrom?

One-tenth of a nanometer

What is an angstrom? Note: This question comes from pages 67-170 of the book, "Smaller Faster Lighter Denser Cheaper". One-tenth of a nanometer One-tenth of a millimeter 0.01 billion 10^-10 of a centimeter 10^-10 of a millimeter

One-tenth of a nanometer

______________ uses option pricing models to measure the value of assets that share option characteristics.

Option pricing theory

Options

Options on futures (Exchanges) or other combinations (OTC)

False

Other things held constant, an increase in the cost of capital discount rate will result in a decrease in a project's IRR.

Cash Flow-at-risk (CFar)

Part of Extreme Value Theory with VaR. Focused on operating cash flows Computed over longer period of time than VaR Likelihood that Operating Cash Flow will drop below pre-specified level

Which of the following is talking about Monte Carlo Simulation Analysis?

Particularly helpful in project analysis since the outcomes from large investment projects are often the result of the interaction of a number of interrelated factors (or value drivers).

Derivative

Payoffs to which are completely determined by the price of one or more "underlying" assets.

Which of the following did Eric Topol not consider when inventing individualized medicine? Note: This question comes from pages 67-170 of the book, "Smaller Faster Lighter Denser Cheaper". Personal preference Mobile connectivity Wireless sensors Imaging Social Networking

Personal Preference

Which of the following did Eric Topol not consider when inventing individualized medicine?

Personal preference

Which of the following best describes the view of the author of Energy Myth and Realities with respect to electric powered automobiles?

Pessimistic

Which of the following best describes the view of the author of Energy Myth and Realities with respect to electric powered automobiles? Pessimistic Enthusiastic Cautiously optimistic None of these are correct. Wishful.

Pessimistic

Peter Odell

From the lectures on energy economics, what is something major that the Industrial energy section produces?

Petrochemicals

What does Dr. Simkins say that the Industrial energy section produces?

Petrochemicals

What provided most of the US energy needs by the early 1950s? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. None of these Natural gas Petroleum Wood Coal

Petroleum

What provided most of the US energy needs by the early 2000s? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. Petroleum Natural gas None of these Wood Coal

Petroleum

You just purchased a bottle of your favorite soft drink at the convenience store. This bottle is most likely made from which of the following plastics? (Hint: This question is from the Petrochemicals lecture and also from Chapter 5 of the Energy Finance and Economics book (PDF file posted to week 4 materials).

Polyethylene terephthalate (PETE)

Which of the following parts of Midstream is commodity price sensitive?

Processing

Which of the following parts of Midstream is commodity price sensitive? Processing Marketin Storage Gathering

Processing

Which of the following is NOT true about Cushing Oklahoma

Produces around 400,000 barrels of oil a day

1. What hydrocarbon molecule is this?

Propane

What is the name of the hydrocarbon that is C3H8?

Propane

What is the name of the hydrocarbon that is C3H8? Pentane Propane Ethane Butane Methane

Propane

What is the second most important natural gas liquid (NGL) as a feedstock to the petrochemical industry? Hint: This is from the Midstream lecture.

Propane

Which natural gas liquid is used to make the base chemical, propylene?

Propane

Which natural gas liquid is used to make the base chemical, propylene? Methane Ethane Propane Butane Pentane

Propane

Propane when cracked...

Propylene

The nucleus of an atom is made up of __________ and usually a similar number of neutrons.

Protons

Which method is the following sentence talking about to estimate the reserves ? " The lowest figure, the amount that the geologists are 90% sure is there (sometimes 95% is used which would be P95)."

Proved or Proven

Linn Energy is hedging their crude oil production and you have been instructed to implement the hedging program. Your supervisor, Bill Shanahan, has instructed you to buy a put option that gives price protection for a minimum of $92.00 per barrel (a floor price) for the crude oil that you are selling. What option do you select and what is the premium on the option? Use the NYMEX crude oil call and put information in the Appendix of Chapter 16 to answer this question. Remember to use "Prior Settle" as the option premium in the Appendix.

Put option with strike price of $92.00 and a premium of $0.20 per barrel.

Linn Energy is hedging their crude oil production and you have been instructed to implement the hedging program. Your supervisor, Bill Shanahan, has instructed you to buy an option that gives price protection for a minimum of $93.50 per barrel based on the strike price (a floor price) for the crude oil that you are selling. What option do you select (call or put), what is the strike price, and what is the premium on the option? Use the NYMEX crude oil call and put information in the Appendix of Chapter 16 to answer this question. Remember to use "Prior Settle" as the option premium in the Appendix

Put option with strike price of $93.50 and a premium of $0.26 per barrel.

What option do you select (call or put), what is the strike price, and what is the premium on the option?

Put option with strike price of $93.50 and a premium of $0.26 per barrel.

For the full cost accounting companies, a ceiling test is required to ensure that the net capitalized costs of full cost companies do not exceed their underlying values of those companies. How often is the full cost ceiling test required to be performed?

Quarterly

Which mineral comprised nearly half of the mineralogy of the shale rock? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46.)

Quartz

As discussed in the lecture video, which of the following technologies did not contribute to the shale boom during the 2008-2015 period?

Radiography

Which of the following technologies did not contribute to the shale boom during the 2008-2015 period?

Radiography

Stages of exploration and production...

Ramp up Plateau Decline

Which of the following is NOT a potential problem or limitation of financial ratio analysis?

Ratios are rigid, black and white measures that always send a clear message to the financial analyst.

Equity value of $65.2 million for Helix

Relative valuation lecture: What happens if we apply a 20% discount for a private company when valuing Helix instead of the other discount used in the slides? Recall that the average EBITDA multiple for comparable firms is 10.48. If Helix anticipates earning $10 million in EBITDA this year (same as in the lecture), then we estimate the equity value of Helix to be what, using a private company discount of 20%? [Reminder: Helix has $2.4 million in cash and $21 million in interest bearing debt.]

Largest refiner in the world

Reliance in India

Why do cities nowadays take a leading role in renewable energy deployment? Select all answers that apply. Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. Rising demand at the municipal level A much higher population compared to that in 1990 Reducing air pollution and carbon emissions Lowering energy costs and providing energy access No answer is correct

Reducing air pollution and carbon emissions Lowering energy costs and providing energy access

Value of Proved Reserve Additions

Referred to as SMOG (Standardized Measure of Oil & Gas)

Refining margins are $3.00 per barrel for crude oil X and $.50 per barrel for curde oil Y. Crude oil X is the most profitable to refine.

Refining margins are $3.00 per barrel for crude oil X and $0.50 per barrel for crude oil Y. Crude oil X is the most profitable to refine.

Using the image provided about U.S. Energy Consumption in 2018, answer the following question: What is rejected energy?

Rejected energy is part of the energy of a fuel that could be used for a purposeful activity, like making electricity or transport. This energy is lost heat. One example: For a coal fired power station, for instance, about 2/3 of the energy released when the coal is burnt is discarded as heat in the environment.

______ estimates the value of an asset by looking at the pricing of "comparable" assets relative to a common variable like earnings, cashflows, book value, or assets

Relative valuation

What are not directly reflected on an oil and gas company balance sheet?

Reserve Values

According to Chapter 3 of the Pennwell book for FAS 69 and the SEC requirements, information must be disclosed in financial statements by oil and gas companies. Which of the following is information that is not required to be disclosed?

Reserves of oil and gas that are classified as possible

Reserves of oil and gas that are classified as unproven.

What is the source of cellulosic ethanol? This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" Residual Phytomass Corn plants Salmon stocks Plant stems None of the choices

Residual Phytomass

A _____________ occurs when a private company that has strong prospects and is eager to raise financing buys a publicly-listed shell company, usually one with no business and limited assets. The private company merges into the public company, and together they become an entirely new public corporation with tradable shares.

Reverse Merger - on test

The man responsible for the U.S. Navy's nuclear propulsion program.

Rickover

The man responsible for the U.S. Navy's nuclear propulsion program. Yamamoto Rickover Nimitz None of these are correct. Halsey

Rickover

What is one of the most used indicators of industrial activity in the upstream?

Rig count

Event Risk

Risk associated with particular types of events, such as fire, flood, or theft

Credit Risk/Default Risk

Risk associated with the ability of customers and vendors to pay or deliver

Reputation Risk

Risk associated with the firm's business reputation

Liquidity Risk

Risk associated with the inability to buy or sell commodities at quoted prices.

Operational Risk

Risk associated with the performance or availability of physical or managerial systems

Price or Market Risk**

Risk associated with unexpected changes in the market price of commodities

Exchange Rate Risk

Risk due to fluctuations in currency movements

Political Risk

Risk due to new regulations, expropriation, etc.

What was Col. Drake's oil company?

Rock oil company

This question is from Dana Murphy's presentation on Feb. 22, 2016 (guest speaker that was recorded and video & slides posted to D2L). Who made the following statement: "Go the extra mile because there's no traffic jam there."

Roger Staubach

Who made the following statement: "Go the extra mile because there's no traffic jam there."

Roger Staubach

What did Artie White like the most about the new drill with AC top-drive rig? Note: This question comes from pages 171-210 of the book, "Smaller Faster Lighter Denser Cheaper". Safer Cheaper Faster Denser Smaller

Safer

Largest additive in hydraulic fracturing

Sand

Shale rocks consist of what

Sandstone and limestone

Which statement is true regarding the ability of OPEC countries to withstand low oil prices?

Saudi Arabia needs $90-105 $/Bbl to balance its budget.

Which statement is true regarding the ability of OPEC countries to withstand low oil prices?

Saudi Arabia needs $90-105/Bbl to balance its budget.

Which statement is true regarding the ability of OPEC countries to withstand low oil prices?

Saudi Arabia needs 90-105$ to balance its budget

What was the group name that petitioned the department of Commerce to impose tariffs on crude oil coming from Saudi Arabia,Mexico,Venezuela and Iraq?

Save Domestic Oil Inc.

______________ examines several possible situations, usually worst case, most likely case, and best case and also provides a range of possible outcomes.

Scenario

_______ examines several possible situations, usually worst case, most likely case, and best case and also provides a range of possible outcomes.

Scenario analysis

______________ examines several possible situations, usually worst case, most likely case, and best case and also provides a range of possible outcomes.

Scenario analysis

As shown in the following figure, in conventional hydrocarbon reservoir, a relatively impermeable rock that forms a barrier above and around reservoir rock which can prevent hydrocarbon fluids and gases from migrating beyond the reservoir is called a(n) _________

Seal or cap rock

A trader is long 10 gasoline futures contracts that expire in April. To close his position before the delivery date the trader must:

Sell 10 April gasoline futures contracts

A trader is long 10 gasoline futures contracts that expire in April. To close his position before the delivery date the trader must:

Sell 10 April gasoline futures contracts - on test

To hedge, an E&P company wants price protection from falling prices. They decide to buy a put to protect from falling prices. But they want a lower cost of hedging and decide to construct a collar strategy. What other option do they use?

Sell a call option.

What is the most expensive way to transport oil? Hint: This is from the Midstream lecture.

Semi-truck

_____________ shows how changes in only one variable at a time, such as volume or price, affects the NPV or IRR.

Sensitivity Analysis

What analysis is described? -Shows how changes in a variable such as unit sales affect NPV or IRR -Each Variable is fixed except one -Answers "what if" questions

Sensitivity analysis

What does this describe? •Shows how changes in a variable such as unit sales affect NPV or IRR. •Each variable is fixed except one. Change this one variable to see the effect on NPV or IRR. •Answers "what if" questions, e.g. "What if sales decline by 30%?"

Sensitivity analysis

________ is described as follows: •Shows how changes in a variable such as unit sales affect NPV or IRR. •Each variable is fixed except one. Change this one variable to see the effect on NPV or IRR. •Answers "what if" questions, e.g. "What if sales decline by 30%?"

Sensitivity analysis

What airline is doing conceptually

Setting a price cap they pay by "buying a call" and setting a floor price by "selling a put"

What was the price of natural gas during the early 1950's? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46)

Seven cents per thousand cubic feet

Fracking ?

Shale

Cause of 2014 oil boom

Shale Revolution

1985/86, Saudi Arabia jettisoning of the swing producer role and adoption of netback pricing triggered _____ in oil prices?

Sharp decrease

Ex Con because...

She worked at Conoco in the past

What was the name of an exploration company Harold Hamm incorporated in 1967 at the age of twenty two?

Shelly Dean Oil Company

Value Added Ratio

Should be greater than 1

F&D Reserve Replacement Ratio

Should be greater than 1.0

Production Replacement Ratio

Should be greater than or equal to 1.0

Which group applauded the push into shale drilling, hoping natural gas might take market shares away from dirtier coal and oil sources?

Sierra Club

Following resources are all considered renewable energy resources

Solar Energy from Sunlight, Hydropower, and Wind Power from Wind.

Why were the 1980's an awful time in the oil business?

Some members of OPEC ramped up production

Which of the following statements is true about the frac spread and natural gas processors?

Some natural gas processors have contracts called "keep-whole contracts". The frac spread most affects these natural gas processors, with higher frac spreads predictive of higher margins and lower frac spreads predictive of lower margins.

If solar power technology could be 20% efficient at turning solar power into electricity, we would need to cover a land area the size of __________ to power the entire earth. Spain Brazil China Luxemburg Australia

Spain

This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a:

Spider Diagram

(spider diagram pictured above) This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a:

Spider diagram

This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a:

Spider diagram

This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a: (Assignment 5 No. 22)

Spider diagram

What was the first true gusher? Spindletop Permian Basin Eagle Ford Halliburton

Spindletop

The _________ is the price for immediate delivery while the _______ is the price for future delivery.

Spot Price; Forward Price

In Chapter 17, Risks in Trading Energy Commodities, what is the definition of "Basis"?

Spot price - Future price

The ____ is the price for immediate delivery while the ____ is the price for future delivery

Spot price; forward price

The _________ is the price for immediate delivery while the _______ is the price for future delivery.

Spot price; forward price

The _______ is the price for immediate delivery while the ________ is the price for future delivery.

Spot price; forward price - on test

Write down how did you get the data of "Extensions and Discoveries" from Capital IQ

Step 1: type in the company you wish to know about Step 2: under tearsheet, click on the 10-k Step 3: under the proved reserves table you will find extensions and discoveries

Chokepoint where the greatest volume of oil flows through is ____.

Straight of Hormuz

Which"Chokepoint" has the most crude oil in the world flow through it daily and how much flows through it? This question is from the "Midstream" lecture.

Straight of Hormuz, 17 million barrels per day

What does Boone Pickens NOT liked to be called?

Tar Man

Which of the following are considered pivotal instruments of the scientific revolution?

Telescope and microscope

Reserve Life Index

Tells us how long reserves will last at the current production rate if there were no additions to reserves

Production to Reserve Ratio

Tells us what percentage of reserves were produced in the year being studied

Electric Semitractor

Tesla has a product description for a future product of "capable of traveling 804 kilometers on an electric charge - even with a full 36,287-kilogram load - and will cost less than a diesel semi considering fuel savings, lower maintenance and other factors. The truck will have Tesla's Autopilot system, which can maintain a set speed and slow down automatically in traffic. It also has a system that automatically keeps the vehicle in its lane. The company plans a worldwide network of solar-powered 'megachargers' that could get the trucks back up to 400 miles of range after charging for only 30 minutes. The move fits with Musk's stated goal for the company of accelerating the shift to sustainable transportation. Trucks account for nearly a quarter of transportation-related greenhouse gas emissions in the US, according to government statistics. But the semi also piles on more chaos at the Palo Alto." This is a description of

Industrials Consumer Discretionary Utilities

Tesla is listed in 5 major industry classifications. These are ________? Hint: This is a question to test your knowledge of using Capital IQ.

The natural gas producing Barnett Shale is located in which state?

Texas

ROA=EBIT/(TA-TA-1)/2

Textbooks define Return on Assets (ROA) as Net Income (NI) divided by Total Assets (TA) or LaTeX: ROA\:=\frac{NI}{TA} R O A = N I T A . How does Capital IQ define using their acronyms? Hint: This is a question to test your knowledge of using Capital IQ.

What was the name of the 200,000 square mile formation?

The Bakken

What was the name of the shale that ran under much of North Texas? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46)

The Barnett Shale

The UAE oil minister, al-Mazrouei, is impressed at how well the OPEC and non-OPEC partnership is working, particularly with production data showing a high level of compliance to the agreement.

What was the name of George Mitchell's planned city that would embrace his evolving views on the environment and sustainability? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46)

The Woodlands

In January 2017, XLY oil company acquired an unproved lease at a total cost of $4MM. During that year, the company drilled two dry holes on the property. Consequently, the company decided by the end of year that 50% of the lease must be impairment. What is the allowance for impairment for this lease by the end of 2017?

The allowance for impairment was 2mm

Which of the following is not how Dr. Simkins describes the frac spread?

The big show

Experimental Breeder Reactor #1 (EBR-1) was one of the first nuclear power plants to generate electricity, however its primary purpose was to prove which theory?

The capture of neutrons by uranium-238, producing plutonium-239, would produce more fuel than consumed in the process.

Experimental Breeder Reactor #1 (EBR-1) was one of the first nuclear power plants to generate electricity, however its primary purpose was to prove which theory? A reactor design that would produce less radioactive waste. A reactor design that would not melt down with a loss of coolant. None of these are correct. A fusion reactor design. The capture of neutrons by uranium-238, producing plutonium-239, would produce more fuel than consumed in the process.

The capture of neutrons by uranium-238, producing plutonium-239, would produce more fuel than consumed in the process.

Why has Wall Street abandoned oil and gas stocks?

The energy stocks has not been performing well and has worsened due to the US-China trade war and other geopolitical disruptions.

Why has Wall Street abandoned oil and gas stocks? This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

The energy stocks has not been performing well and has worsened due to the US-China trade war and other geopolitical disruptions.

Volume

The number of contracts that change hands during a specific period of time

Open Interest

The number of open or outstanding contracts for which an individual or entity is obligated to the Exchange because that individual or entity has not made an offsetting sale or purchase

According to Dr. Simkins lecture on wind energy in the US, what is the reason she gives why U.S. wind energy grew in California in the 1980's and then stagnated nationwide during this decade? The oil price collapse in the mid-1980s The natural gas price collapse in the mid-1980s The interest in solar power trumped wind energy Investment turned to the personal computer markets in California All of these are reasons given

The oil price collapse in the mid-1980s

Where is oil found? A) The void spaces in rocks B) Open structures underground such as caverns and underground lakes C) Granite deposits D) Coal bed methane

The void spaces in rocks

What is the author's opinion of Bill McKibben's Energy-Starvation Plan?

The plan is a prescription for economic suicide

Which of the following is not a concern about nuclear power, according to the author of "Energy Myths and Realities" (Smil)?

The possibility of a nuclear explosion as a nuclear power plant.

Which of the following is not a concern about nuclear power, according to the author of "Energy Myths and Realities" (Smil)? The lack of a permanent solution for the storage of radioactive waste. The possibility of a nuclear explosion as a nuclear power plant. The long-term health effects seen among uranium miners. None of these are correct. The large cost of decommissioning nuclear power plants.

The possibility of a nuclear explosion as a nuclear power plant.

Which of the following about refining is true? Select all that apply The process of marketing and selling petroleum products The process of changing crude oil into petroleum products Discovery and Transportation of NGL products Its part of downstream

The process of marketing and selling petroleum products The process of changing crude oil into petroleum products Its part of downstream

Which of the following is not proof that technologies are raising living standards?

The rapid decline in the stock of natural resources.

Which three concepts of the eleven accounting concepts are of prime importance in understanding financial reporting in the oil and gas industry?

The realization concept, the matching concept, the cost concept

Financial settlement

The short position delivers the difference between the cash value of the underlying asset and the contract price. Over 99% of energy contracts are settled this way.

Physical Settlement

The short position delivers the underlying asset and receives the contract price. Less than 1% of energy contracts are settled this way

Where is oil found?

The void spaces in rocks

Energy Firms Brace for Harvey Fallout- WSJ The article discusses how volatile the energy market can be when there is a natural disaster such as hurricane Harvey. Which of the following choices describes the impact on the energy markets?

There has been an increase in gasoline prices as an immediate response to the closure of some refineries impacted by the storm.

Which of the following does not represent an improvement in living standards discussed in this section?

There is now a real need to reduce our consumption levels.

Devon Energy, an E&P company has constructed a zero cost collar strategy last summer. They bought a put option on crude oil with a premium of $0.50 per barrel with a strike price of $50 per barrel and sold a call option at a strike price of $70 per barrel and the same premium. If crude oil is $80 per barrel at maturity of the hedge, how much do they make or lose on the option hedge per barrel and per contract? Remember that this is a zero cost collar hedge.

They lose $10 per barrel on the hedge ($10,000 per contract loss).

If crude oil is $80 per barrel at maturity of the hedge, how much do they make or lose on the option hedge per barrel and per contract?

They lose $10 per barrel on the hedge ($10,000 per contract loss).

Devon Energy, an E&P company has constructed a zero cost collar strategy last summer. They bought a put option on crude oil with a premium of $0.50 per barrel and a strike price of $50 per barrel and sold a call option, strike price of $70 per barrel, with the same premium. If crude oil is $40 per barrel at maturity of the hedge, how much do they make or lose on the option hedge per barrel and per contract? Remember that this is a zero cost collar hedge.

They make $10 per barrel on the hedge ($10,000 per contract).

Net wells to gross wells is another type of energy ratio discussed in Chapter 9. A high net wells to gross wells ratio indicates which of the following?

This indicates that a company owns relatively large working interests in the overall wells and this is a good positive indicator of future profitability.

If we are guided by Gore's specific goals, it is rather easy to quantify America's repowering challenge. In 2008, the country generated about 3.75 PWh in fossil-fueled and nuclear stations, the two nonrenewable forms of generation that Gore wants to have entirely replaced by renewable conversions. Accordingly, even if all requisite new HV transmission interconnections were in place, slightly more than two units of generating capacity in wind and solar would be needed to replace a unit in coal, gas, oil, and nuclear—and the country would have to build about 1,740 GW of new wind and solar capacity in a decade, 1.75 times as much as it built during the past fifty or more years. True or false? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. This statement is false. This statement is true. I have no idea.

This statement is true.

The proposals by Gore, Pickens, and others about changing energy sources is that they ignore one of the most important realities: the inherently slow pace of energy transitions. True or false? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. This statement is false. I have no idea. This statement is true.

This statement is true.

__________ was an early proponent of electric-powered automobiles.

Thomas Edison

What are the main points about hydraulic fracturing...?

To have longer exposure to your reservoir

Reserve Replacement Cost Ratio =

Total Costs Incurred/(Revisions + Improved Recovery + Extensions and Discoveries + Purchases)

Lifting Costs Ratio =

Total Lifting Costs/Annual Production

Sector that requires mostly petroleum (>90%)...

Transportation

Which US sector is responsible for the largest petroleum consumption? Hint: From the Ch. 3 Energy Economics lecture.

Transportation

Sectors of energy demand in the US are ___...

Transportation, power, commercial and residentual, industrial

What are the 3 popular probability distributions used in simulation models?

Triangular, Lognormal, Uniform

What are the 3 most common distributions used in Monte Carlo Simulation?

Triangular, Uniform, Lognormal

A major disadvantage of solar power is that it is intermittent. True False

True

A market is said to be "liquid" when it has a high level of trading activity and open interest. True or False

True

A market is said to be "liquid" when it has a high level of trading activity and open interest. True or False?

True

A valuation in Relative Valuation, we realize that all valuations will have a bias. So relative valution is not an objective search for the "true" value.

True

Under Full Cost accounting system, the oil production cost will be expensed.

True

Wind speed increases as the height from the ground increases

True

Sweet crude has less than 1% sulfur content and sour crudes have greater than 1% sulfur. This statement is: False True

Truee

Which country consumes the most oil?

U.S.A

Three primary reference refining margins are: Cushing, Northwest Europe and Singapore US Gulf Coast, Northwest Europe and Saudi Arabia US Gulf Coast, Northwest Europe and Singapore US Gulf Coast, Northwest Europe and Dubai

US Gulf Coast, Northwest Europe and Singapore

Three primary reference refining margins are:

US Gulf Coast, Northwest Europe and Singapore

2011

US became a net exporter of petroleum products

US demand components; NGLs=natural gas liquids (Ethane, Propane, Butane (normal and iso), and Pentane), LNG=Liquefied natural gas LPG= liquefied petroleum gas (propane), GTL=Gas to liquids, two main NGL markets: Mont Belvieu, Tx. &Conway, Ks.

Which country consumes the most oil?

USA

What does "risk" mean in capital budgeting?

Uncertainty about a project's future profitability Measured by standard dev. of NPV, standard dev. of IRR, Beta Will taking on the project increase the firm's stockholder's risk

What does "risk" mean in capital budgeting?

Uncertainty about a project's future profitability Measured by standard deviation of NPV, standard deviation of IRR, beta. Will taking on the project increase the firm's and stockholders' risk? (All of the above)

What are the 3 sectors of the Oil and Natural Gas industry? In other words, what are the sectors of the energy value chain.

Upstream, midstream, and downstream

Which population distribution method only needs two parameters--min and max?

Unifrom

Geographically, petroleum-related M&A is concentrated mostly in what country?

United States

Geographically, the petroleum-related M&A is concentrated mostly in what country?

United States

Who is the world's largest natural gas producer?

United States

Who is the worlds largest natural gas producer?

United States

What 3 sectors of the Oil and Natural gas Industry?

Upstream Midstream Downstream

What are the 3 sectors of oil and gas industry? In other words, what are the three sectors of the petroleum energy value chain

Upstream, midstream, and downstream

What are the 3 sectors of the Oil and Natural Gas industry? In other words, what are the sectors of the energy value chain. Upstream, midstream, and downstream Exploration, production, and marketing Upstream, downstream, up a stream without a paddle Refining, pipeline, and compression

Upstream, midstream, and downstream

What are the 3 sectors of the Oil and Natural Gas industry? In other words, what are the sectors of the energy value chain?

Upstream, midstream, and downstream

14.4%

Use the ConocoPhillips mini-case (Unit 5 material). Do Breakeven Sensitivity Analysis using Goal Seek in Excel. What natural gas decline rate gives an NPV=$50,000? Correct!

$3,453,607 million; 46.1%

Use the ConocoPhillips mini-case (Unit 5 material). For the best case scenario (see Question 3 of the mini-case and related videos (online class - see week 8 topics)), what is the NPV and IRR? If you forgot from class or the video, work again. Hint: Go to the Data tab in Excel and select the "What-If" analysis functions.

What is VaR

VaR summarizes the worst loss over a target horizon with a given level of confidence

Which of the following is not an example of a quest for Smaller Faster Lighter Denser Cheaper discussed in the book?

Vacuum cleaner

Which ratio tells us the costs of adding reserves in relation to the value of those reserves added?

Value added ratio

From the diagram, which of the following we can conclude? (Assignment 5 No. 16)

We are about 77% confident that the discounted payback will be less than 2.5 years.

Who sees cellulosic ethanol as a fuel that "is greener, cheaper, more secure than gasoline-and this shift won't cost the consumer, automakers or the government anything"? This question is from the video lectures and book chapter, Chapter 6-Liquid Fuels and Plants from the book " Energy Myths and Realities" William Bryant Henry Ford Mark Zuckerberg Vinod Khosla Tom Ward

Vinod Khosla

Which two valuation templates are covered in the webinar?

WACC and DCF

Rank the following electric power units from smallest to largest, where the smallest is 1 watt and the largest is 1 x 10 ^ 15 (1,000,000,000,000,000) watts. This is from the lecture over the electric power industry. It is also revisited in the Wind Energy lecture. Watt, Kilowatt, Megawatt, Gigawatt, Terawatt, Petawatt Watt, Kilowatt, Megawatt, Gigawatt, Petawatt, Terawatt Watt, Megawatt, Gigawatt, Kilowatt, Terawatt, Petawatt Petawatt, Watt, Kilowatt, Megawatt, Gigawatt, Terawatt Watt, Kilowatt, Megawatt, Terawatt, Petawatt, Gigawatt

Watt, Kilowatt, Megawatt, Gigawatt, Terawatt, Petawatt

From the diagram, which of the following we can conclude?

We are about 77% confident that the discounted payback will be less than 2.5 years.

-Reflects the probability distributions of each input -Shows range of NPVs, the expected NPV, sNPV, and CVNPV. -Gives an intuitive graph of the risk situation.

What are the advantages of simulation analysis?

7/8/2016

What date in 2016 did EQT acquire Statoil assets in the Marcellus Shale for $410MM? Hint: This is a Capital IQ question. Perform a filter on key developments to help answer this question.

jet fuel savings

What is the main source of revenues for the Southwest Airlines Blended Winglet Project? Hint: This question is from Ch. 23 of the textbook on Southwest Airlines.

Capital Asset Pricing Model (CAPM)

What technique did Southwest Airlines' Finance Department use to estimate the cost of equity? Hint: This question is from Ch. 23 of the textbook on the Southwest Airlines Blended Winglets Project. Correct!

The following pipes were made from HDPE.

high density polyethylene

What Questions do Ratios 8-9 answer?

What is the value of the reserves additions per BOE? What value has been added?

Engineering Assessment

What project assessment phase is best described as having the attitude, like taking the Hippocratic Oath, as: "First, do no harm." Hint: This question is from Ch. 23 of the textbook on the Southwest Airlines Blended Winglets Project. Correct!

President of Bond Division

What was Robert P. Brown's position at Fidelity Management and Research as of January 2019? Hint: This question tests your knowledge of Capital IQ.

When is a market said to be liquid?

When it has a high level of trading activity and open interest.

Apply a discount to the Step 3 estimate because the calculation is for acquiring a private compan

When valuing a private company acquisition, which of the following is important when conducting step 4 analysis (refining the estimate)? Pick the best answer.

2016

When we could first start exporting oil

Auro Robotics Apple Hyundai Motor Company

Which of the following are Tesla competitors? Hint: This is a question to test your knowledge of using Capital IQ.

All of the answers are correct.

Which of the following are advantages of MLPs?

Gives probabilities of of various possible outcomes

Which of the following reasons is not a reason as to why sensitivity analysis is useful?

Net present value

Which technique is the most widely used in Capital Budgeting, if we had to pick the most popular one?

TOTAL S. A.: 24.99%

Who is the Top Holder of shares in Clean Energy Fuels Corp. (NasdaqGS: CLNE) and what percent of Total Shares Outstanding do they own? Hint: This question tests your knowledge of Capital IQ. Search for the company on Capital IQ. Then, on the left-hand tool bar, go to the category "Investors", and then use the sub-category "Public Ownership".

The company is unable to provide steady cash flows

Why would a company NOT choose the MLP structure?

$260

In 2017, 97% of the total capacity added to the U.S. grid came from what kind of energy generation technologies? Note: This question is from the reading, "Cities: Big Players in Clean Energy Transition", NextEra Energyinsight, Sept. 11, 2019. Coal Wind Natural gas Solar Shale gas

Wind Natural gas Solar

What power source precedes the Age of Steam? Note: This question comes from pages 67-170 of the book, "Smaller Faster Lighter Denser Cheaper". Wind energy Electricity Solar energy Gas Thermal energy

Wind Energy

What power source precedes the Age of Steam?

Wind energy

Linn Energy is hedging their crude oil production and you have been instructed to implement the hedging program. Your supervisor, Bill Shanahan, has instructed you to buy a put option that gives price protection for a minimum of $92.00 per barrel (a floor price) for the crude oil you are selling. Is is possible to construct a zero cost collar? If so, what call option to you sell? List the strike price and premium. Use the NYMEX crude oil call and put information in the Appendix of Chapter 16 to answer this question. Remember to use "Prior Settle" as the option premium in the Appendix.

Yes, it is possible. You would sell the call option with a strike price of $130.50 and a premium of $0.20 per barrel.

Yes, this statement summarizes the author's opinion.

In Chapter 7 of the text book (How Our Political Views Affect Our View of Energy Prices), survey participants were asked to identify the factors influencing energy pricing. Does the following statement correctly summarize the author's (Sheridan Titman) conclusion? "It's not surprising that Democrats tend to distrust large corporations and that Republicans tend to think that regulation does more harm than good. However, a casual evaluation of the recent political discourse suggests that politicians, in their pandering to the world view of their base, slant information in ways that reinforce misconceptions. Democracy requires an educated and informed electorate. A political process that encourages misinformation can't be a good thing."

Yes, this statement summarizes the author's opinion.

Relative valuation

You are a short term investor. You trade several times a week on your Ameritrade account, and rarely hold a stock more than 1 month. Which valuation approach should you use?

Fundamental valuation

You are investing for your retirement. You are planning to take a buy and hold strategy which involves picking some fairly priced stocks and holding them for several years. Which valuation approach should you use?

False

You should take CapitalIQs list of comparable transaction as gospel, because a the gospel you do not need to review them to see if all are fully comparable. Hint: This is a question to test your knowledge of using Capital IQ.

According to the information shown in Figure 2, which type of energy has the lowest efficiency and at the same time has the highest cost? Note: This question is from the reading, " Heir to the Throne: Will Lithium Seize the Storage Crown?", NextEra Energyinsight, Oct. 02, 2019. pumped hydro Energy Lithium-Ion Battery Zinc-Bromide Flow Battery Vanadium Flow Battery

Zinc-Bromide Flow Battery

MLPs

_____ are partnerships that trade on public exchanges or markets and trade in the form of units.

Incentive distribution rights

_________ are a share of the cash distribution paid by the MLP partnership, which gradually increases as the partnership increases the cash distributions.

Fundamental valuation

___________ relates the value of an asset to the present value of expected future cashflows on that asset.

Relative valuation

______________ estimates the value of an asset by looking at the pricing of "comparable" assets relative to a common variable like earnings, cashflows, book value, or assets

Option pricing theory

______________ uses option pricing models to measure the value of assets that share option characteristics.

The full cost ceiling test is applied on_______

a country-by-country basis

In 1985/86, Saudi Arabia's jettisoning of the swing producer role and adoption of netback pricing triggered _____ in oil prices.

a sharp decrease

Over time, electricity has been responsible for most of the energy consumption growth in the commercial sector due to the use of what?

air conditioning

Over time, electricity has been responsible for most of the energy consumption growth in the commercial sector due to the use of what? Hint: From Chapter 3 Energy Economics lecture.

air conditioning

Consumption amongst non-OECD countries can be described how over the recent 15 years? (From Ch. 3 Energy Economics) A) fairly flat with little growth B) growth that was halted by the 2008 recession and then proceeding to decline steadily C) an almost linear trend upward D) an exponetially growing amout of consumption (i.e., more than doubling every year). no choice is correct

an almost linear trend upward Correct!

What petrochemical product is this? This is to illustrate the importance of the petrochemical industry.

an insulin pump

What petrochemical product is this? This is to illustrate the importance of the petrochemical industry. Hint: This is from the video lectures over petrochemicals. an insulin pump laboratory metering device used in biofuels research a medical device used in veterinarian applications a pediatric heart monitor None of these are correct.

an insulin pump

From the diagram below, we can estimate what percentage of the observations (simulation results) occur with a NPV >0?

around 90% or higher

The number of protons an atom has tells us the __________. weight of an atom whether the atom is radioactive None of these are correct. atomic number atomic mass

atomic number

An E&P company wishes to hedge using a collar strategy. Which of the following strategies should be used

buy a put and sell a call

In the 1600s, Japanese feudal lords sold their rice for future delivery in a market called _________ under contracts that protected them from bad weather or warfare.

cho-ai-mai

In the 1600s, Japanese feudal lords sold their rice for future delivery in a market called __________ under contracts that protected them from bad weather or warfare.

cho-ai-mai - on test

_________ give up their outermost electrons pretty easily.(Note : This question is from the lecture over the Electric Power Industry.) copper atoms silica atoms lead atoms lightning none of the above

copper atoms

What is the measure of profitability of refining crude oil into the products individuals actually consume?

crack spread

Enterprise Risk Management

deals with managing all of these various risks.

______ are financial instruments (contracts) that do not represent ownership rights in any asset. Rather, they derive their value from the value of some other underlying commodity or other asset

derivatives

_________ are financial instruments (contracts) that do not represent ownership rights in any asset. Rather, they derive their value from the value of some other underlying commodity or other asset.

derivatives

__________ are financial instruments (contracts) that do not represent ownership rights in any asset. Rather, they derive their value from the value of some other underlying commodity or other asset

derivatives

__________ are financial instruments (contracts) that do not represent ownership rights in any asset. Rather, they derive their value from the value of some other underlying commodity or other asset.

derivatives

What type of fuel has the highest BTU per volume?

diesel

According to Lawrence Livemore National Lab, in 2017, coal is mainly used in_____in the US

electricity generation

The U.S. Futures Exchange trades ____.

energy

What is C2H6

ethane

Which petrochemical molecule is this?

ethylene

Under the successful efforts method, all exploratory dry holes are

expensed

Under the successful efforts method, all exploratory dry holes are __________

expensed

Under the successful efforts method, all exploratory dry holes are __________ .

expensed

Both NYMX and IPE were originally ________exchanges

floor-based

Weather risk

fluctuations in volume and hence profitability, due to weather events such as flooding, hurricanes

The ____ method provides for more stable earnings in periods of high exploration costs and unsuccessful exploratory drilling. From Chapter 8: Oil and Gas Accounting

full cost

Income statements prepared with the _______ accounting method tend to be LESS conservative because certain costs are _________ rather than ________.

full cost/capitalized/expensed

An oil and gas firm that uses the ___method is subject to more restrictive impairment test requirements than if the firm used the ___method.

full cost; successful efforts

What are the three sectors that the electric industry is broken into? (Note : This question is from the lecture over the Electric Power Industry.) generation, transmission & distribution, and retail sale of electricity generation, transmission, and distribution investor owned utilities, federal power administrators, and electric cooperatives investor owned utilities, federal power administrators, electric marketers, and electric cooperatives none of the above

generation, transmission & distribution, and retail sale of electricity

With the following table of three-year average energy ratios for petroleum companies, COP's Reserve Replacement Cost is ________comparing with peer companies

good to excellent

Actual losses ______ the calculated level of VaR can occur

greater than, less than, or equal to

What is the name of the pattern we observe in the natural gas forward curve?

head and shoulders pattern

What is the name of the pattern we observe in the natural gas forward curve? (Hint: I describe this in my Powerpoint lecture on Introduction to Risk Management.)

head and shoulders pattern

What is the name of the pattern we observe in the natural gas forward curve?

head and shoulders pattern - on test

A crude oil with API gravity less than 10 is a

heavy Crude Oil

The most common type of hydroelectric power plant is a(n)________ facility

impoundment

Rho

is a measure of the responsiveness of the derivative's price to a change in market interest rates

The API gravity of water is 10. If a crude oil has a API of 20, then this crude oil

is lighter than water.

A variant of a particular chemical compound that differs in the number of neutrons in the nucleus is known as a(n) __________. None of these are correct. compound fissile element isotope radioactive element

isotope

According to the API reading, the US is expected to need about ___ % more energy and the world is expected to need ___ % more energy by 2040. Choose the best answer.

less than 10%; more than 50%

According to the above definition, if a liquid is heavier than water, than the liquid has an API ____than 10 at 60 degree Fahrenheit; if one petroleum liquid is less dense than another, then it should have a ______API gravity.

less; greater

A crude oil has an API of 30 and a sulfur content of 1.5%. This oil is classified as________

light and sour oil

What is a good example of when a very significant buildup of unbalanced electrons move in air?(Note : This question is from the lecture over the Electric Power Industry.) lightning proton surge subatomic energy surge a neutron imbalance silica conduction

lightning

A popular reactor design is the pressurized water reactor, which uses water as the coolant. However, the Experimental Breeder Reactor #1 (EBR-1) used __________ as the reactor coolant.

liquid sodium and potassium metal

A popular reactor design is the pressurized water reactor, which uses water as the coolant. However, the Experimental Breeder Reactor #1 (EBR-1) used __________ as the reactor coolant. heavy water liquid carbon dioxide None of these are correct. nitrogen gas liquid sodium and potassium metal

liquid sodium and potassium metal

A trader who has a ____ position in crude oil futures believes the price of crude oil will ___ in the future

long/increase

A trader who has a ____ position in crude oil futures believes the price of crude oil will ___ in the future.

long/increase

A trader who has a _____ position in crude oil futures believes the price of crude oil will ____ in the future

long/increase

A trader who has a ______ position in crude oil futures believes the price of crude oil will ______ in the future.

long; increase

In which of the following types of reservoirs is fracking most necessary to drill an economic well?

low porosity, low permeability

Inventories rise when demand is ___, and fall when demand is ___.

low, high

Technical interview question: Corbin Couch was interviewing ExxonMobil in Houston. As part of the interview process, they asked him in the technical interview, the following question: How do you calculate the market capitalization of a company? Hint: This is also covered in Unit 6 but all students should know this! I want to make sure that you know this by asking in on this assignment :-)

market capitalization is the # of shares of stock outstanding multiplied by the current market price

How do you calculate the market capitalization of a company?

market capitalization is the # of shares of stock outstanding multiplied by the current market price.

The above hydrocarbon is known as:

methane

What is CH4

methane

What is the major component of natural gas?

methane

According to the following table, COP's F&D ratio is ____

not as good as XOM, CVX, and RDS; but better than BP

What are significant sources of energy used in US electricity generation? By this, we are referring to sources that provide at least 5 % of the power. Select all that apply. This question is from the lecture over the Electric Power Industry. nuclear coal natural gas renewables petroleum solar biomass

nuclear coal natural gas renewables

What was the ownership stake of Mitchell brothers for each well they drilled for the investor group? (Note : This question is from the book" The Frackers" and can be answered by reading pages 1-46.)

one thirty-second

Futures contracts were traded on oil in the United States in the nineteenth century in the aftermath of the first ____ oil boom

pennsylvania

Energy derivatives are traded on a variety of energy products. The largest single category consists of

petroleum (oil) derivatives

Energy derivatives are traded on a variety of energy products. The largest single category consists of ______

petroleum (oil) derivatives

Energy derivatives are traded on a variety of energy products. The largest single category consists of _______

petroleum (oil) derivatives

Energy derivatives are traded on a variety of energy products. The largest single category consists of ______________.

petroleum (oil) derivatives

Energy derivatives are traded on a variety of energy products. The latest single category consists of ________.

petroleum (oil) derivatives - on test

The October 1973 Embargo and the production effects of Iranian Revolution followed by the last 1970s Iran-Iraq war had a similar effect on oil prices. What was this effect?

prices more than doubling

What is C3H8

propane

The nucleus of an atom is made up of __________ and usually a similar number of neutrons. None of these are correct. electrons beta particles alpha particles protons

protons

What are not directly reflected on an oil and gas company balance sheet?

reserve values

What is one of the most used indicator of industrial activity in the upstream (which also impacts the oilfield and equipment sector) part of the oil and gas industry?

rig count

What is one of the most used indicator of industrial activity in the upstream (which also impacts the oilfield and equipment sector) part of the oil and gas industry? A) production trees B) seismic surveys C) refining capacity D) rig count

rig count

interest rate risk

risk due to increased funding osts

Credit Risk

risk of default due to bankruptcy broken contracts

Operational Risk

risk of transportation delays

What are proppants

sand

If you are an upstream company and need to hedge the crude oil price risk using a futures contract, would you take a long position or short position in the futures contract?

short position

Technical interview question: Austin Roberts was interviewing a company and to test her knowledge, they asked her the following question: If you are an upstream company and need to hedge the crude oil price risk using a futures contract, would you take a long position or short position in the futures contract?

short position

A crude oil has a sulfur content of 1.5%. This oil is classified as

sour oil

What is the nickname that Dr. Simkins gave the electrical engineering course that teaches about electrical power?(Note : This question is from the lecture over the Electric Power Industry.) sparks and magic circuits and machines short circuits lightning and circuits electrons and subatomic particles

sparks and magic

What is the world's most important continuously working prime mover? Note: This question comes from the lecture on Chapter 8: The Pace of Energy Transitions. diesel engine jet engine. I have no idea. electric vehicle steam turbine

steam turbine

In applying the ceiling test, a full cost accounting company's total net capitalized costs are compared to a cost ceiling value. If ________, the net capitalized costs must be permanently written down, that is, the excess should be expensed and may not be reinstalled in the future

total net capitalized costs exceed the ceiling value

An isotope of hydrogen that has two neutrons in the nucleus is known as __________.

tritium

An isotope of hydrogen that has two neutrons in the nucleus is known as __________. tritium deuterium triceratops None of these are correct. trevorium

tritium

Crude oil is an exhaustible resource.

true

What does the word photovoltaic mean?

turn light into electricity

Relative Valuation

using multiples is the notion of comparing the price of an asset to the market

Fundamental Valuation

using real data to evaluate a security's value

Electricity swaps are traded via ____ ____.

voice brokers

If sufficient quantities of hydrocarbons other than methane are present, a gas would be called:

wet gas

Long position

you bought something

Short position

you sold something

What is the Tesla effect and how is it impacting the energy market?

A concept that the gasoline and diesel vehicles will be replaced by electrical vehicles in the future and weakened the oil demand in energy market.

Why is Suncor Energy considered to be a "differentiated story"?

"Capital discipline, cash return to shareholders, and the power of integration."

Why is Suncor Energy considered to be a "differentiated story"? This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

"Capital discipline, cash return to shareholders, and the power of integration."

This is a P/E Valuation Method Question. Marshall Chance Chemicals (MCC) is a large, privately held chemical company that is considering going public. Answer the following questions using the information for the comparables provided in the table. [Hint: If you want assistance, refer to the relative valuation lecture where I show how to value the chemical division of ExxonMobil if they were planning to sell it off. Do not apply the private company discount since the company is planning on going public.] If MCC has earnings of $250 million, what total equity value do you estimate for the MCC, using the average for the comparables? Name Share Price EPS BASF AG (BF) 70.47 5.243 Bayer AG (BAY) 35.64 1.511 Dow Chemical (DOW) 47.40 4.401 E I DuPont (DD) 41.00 2.572 Eastman Chemical (EMN) 51.69 5.75 FMC (FMC) 59.52 5.729 Rohm & Hass (ROH) 45.02 2.678

$ 3.57 billion

Using the 2019 estimate EPS (earning per share) and P/E (price earning multiple) ratio provided on the table calculate the 2019 estimated stock price. Do not use the recent price. (Hint: P/E = Stock Price/EPS). The answers below are listed in this order for the stocks: BP, Chevron, ExxonMobil, and Royal Dutch Shell, respectively. This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

$36.14, $116.77, $67.40, and $54.99

This is a problem over Relative Valuation. Refer to Problem 8-13 in the lecture on Relative Valuation, which is in the Chapter 8 PDF file posted to Brightspace. Note: This is not Chapter 8 in our class textbook. Value Burlington Resources using Apache as the only comparable firm. There are lectures where I show how to value Burlington Resources using XTO Energy as the only comparable firm. Here, I want you to use a different comparable. Using the P/E method, what value per share do you obtain for Burlington Resources? Select the closes answer since answers may vary due to rounding.

$38.80 per share

This is a problem over Relative Valuation. Refer to Problem 8-13 in the lecture on Relative Valuation, which is in the Chapter 8 PDF file posted to Brightspace. Note: This is not Chapter 8 in our class textbook. Value Burlington Resources using Apache as the only comparable firm. There are lectures where I show how to value Burlington Resources using XTO Energy as the only comparable firm. Here, I want you to use a different comparable. Using the EV/EBITDA method, what value per share do you obtain for Burlington Resources?

$40.40 per share

8.5 x

What are the advantages of simulation analysis?

A, B, and C

What estimate has convinced ExxonMobil and Chevron to anticipate that the oil demand will continue to rise for the next two decades?

Consumption trends, population growth, and rising living standards in the developing world.

_____ are partnerships that trade on public exchanges or markets and trade in the form of units.

MLPs

Which method is the following sentence talking about to estimate the reserves ? The highest reserves figure, the amount that the geologists are 10% sure is there.

Possible

What is the Tesla effect and how is it impacting the energy market? This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

A concept that the gasoline and diesel vehicles will be replaced by electrical vehicles in the future and weakened the oil demand in energy market.

1,861,467

Which of the following reasons is not a reason as to why sensitivity analysis is useful?

Gives probabilities of of various possible outcomes

What estimate has convinced ExxonMobil and Chevron to anticipate that the oil demand will continue to rise for the next two decades? This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019.

Consumption trends, population growth, and rising living standards in the developing world.

True

Risk analysis in capital budgeting is usually based on subjective judgments. (Hint: This question is from the Capital Budgeting and Risk Analysis in the Oil and Gas Industry lecture.)

Which of the following are advantages of MLPs?

Due to lack of corporate level income tax, MLPs generally have a lower cost of capital than corporations, which makes MLPs more competitive in the acquisition marketplace. An MLP is a way for the sponsoring entity to "monetize" its investment in a group of assets while retaining control over those assets (by owning the general partner). The sponsor often can defer significant amounts of taxation upon formation of the MLP. Incentive distribution rights entitle sponsor to increasing distributions.

Equity value of $65.2 million for Helix

Using the table provided, which company is the most expensive investment relatively to the others? (Hint: Understand the P/E ratio) This question is from the reading, "Wall Street has Abandoned Oil & Gas Stocks. You Shouldn't.", Sept. 5, 2019. However, you do not need to have read the article to answer this basic question.

ExxonMobil

A good valuation provides a precise estimate of value. (Note: From the relative valuation lecture.)

False

A valuation is an objective search for "true" value.

False

A valuation is an objective search for "true" value. Hint: From the lecture on Relative Valuation.

False

Which of the following options is a tangible risk?

Financial risk; Insurance risk; Commodity price risk.

What does the picture show us? (Assignment 5 No. 11)

Flatter distribution, larger standard deviation, larger stand-alone risk.

Fundamental valuation

__________ relates the value of an asset to the present value of expected future cashflows on that asset.

Fundamental valuation

___________ relates the value of an asset to the present value of expected future cashflows on that asset.

Fundamental valuation

Which one of the following does not belong as one of the five Basic Rules of Thumb in choosing probability distributions?

If you have relevant data, then use it! Then utilize distribution fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate. If there is a theoretical reason for selecting a particular distribution, then certainly do so. Does the variable you are modeling only assume discrete values? If so, use discrete distributions. Select distributions that fit the wisdom of experts from whom you get parameter estimates

Increase NPV

Increase the required rate of return

What does "risk" mean in capital budgeting?

Measured by standard deviation of NPV, standard deviation of IRR, beta. Will taking on the project increase the firm's and stockholders' risk? Uncertainty about a project's future profitability

P90

You are a short term investor. You trade several times a week on your Ameritrade account, and rarely hold a stock more than 1 month. Which valuation approach should you use?

Relative valuation

______________ estimates the value of an asset by looking at the pricing of "comparable" assets relative to a common variable like earnings, cashflows, book value, or assets

Relative valuation

Sensitivity analysis

Why would a company NOT choose the MLP structure?

The company is unable to provide steady cash flows

Devil's Tower

The project that Williams undertook that I describe in the "Capital Budgeting and Risk Analysis in the Oil and Gas Industry" lecture is:

Spider diagram

This diagram illustrates a very useful tool for risk analysis in capital budgeting. It is known as a: [Hint: I discuss this in the video lecture on Capital Budgeting and Risk Analysis in Capital Budgeting.]

Which of the following statements is correct. The three most common distributions used in Monte Carlo Simulation are:

Triangular, uniform, and lognormal

Which population distribution method only needs two parameters-- min and max?

Uniform

Weather

All of the above

What does "risk" mean in capital budgeting?

Triangular, uniform, and lognormal

Which of the following statements is correct. The three most common distributions used in Monte Carlo Simulation are:

All of the choices listed are one of the basic rules of thumb -- so none of them are incorrect.

Which one of the following does not belong as one of the five Basic Rules of Thumb in choosing probability distributions?

21.22%

Yes, this statement summarizes the author's opinion.

Monte Carlo Simulation

Scenario analysis

______________ examines several possible situations, usually worst case, most likely case, and best case and also provides a range of possible outcomes.

Sensitivity analysis

-If you have relevant data, then use it! Then utilize distribution fitting capability of @Risk. Excellent way to take advantage of historical data - if appropriate. -Does the variable you are modeling only assume discrete values? If so, use discrete distributions. -Select distributions that fit the wisdom of experts from whom you get parameter estimates.If there is a theoretical reason for selecting a particular distribution, then certainly do so -Use the KISS principle! (Keep it Simple, Stupid!)

basic rules of thumb when choosing profitability distribution?

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