Energy Finance and Economics: Analysis and Valuation, Risk Management, and the Future of Energy (Robert W. Kolb Series Book 606)

Thought leaders and experts offer the most current information and insights into energy finance Energy Finance and Economics offers the most up-to-date information and compelling insights into the finance and economics of energy. With contributions from today's thought leaders who are experts in various areas of energy finance and economics, the book provides an overview of the energy industry and addresses issues concerning energy finance and economics. The book focuses on a range of topics including corporate finance relevant to the oil and gas industry as well as addressing issues of unconventional, renewable, and alternative energy. A timely compendium of information and insights centering on topics related to energy finance Written by Betty and Russell Simkins, two experts on the topic of the economics of energy Covers special issues related to energy finance such as hybrid cars, energy hedging, and other timely topics In one handy resource, the editors have collected the best-thinking on energy finance. Acknowledgments xi 1 An Introduction to Energy Finance and Economics 1 Betty J. Simkins and Russell E. Simkins PART ONE An Overview of Energy Finance and Economics 2 Geopolitics andWorld EnergyMarkets 19 Robert W. Kolb 3 Energy Economics: Past, Present, and Prospects for the Future 49 James L. Williams and Betty J. Simkins 4 Sustainable Energy: Myths and Realities 79 Olamide O. Shadiya, Jane A. Talkington, John Mowen, Karen High, and Josh L. Wiener 5 A Brief Introduction to the Petroleum Industry: From Crude Oil and Natural Gas to Petrochemicals and Their Products 107 Russell E. Simkins and Kenneth A. Borokhovich 6 The Economics of Renewable Energy 129 Brad Carson 7 How Our Political Views Affect Our View of Energy Prices 145 Sheridan Titman PART TWO Financial and Economic Analysis in the Energy Industry 8 Oil and Gas Accounting 151 L. Charles Evans III 9 Financial Statement Analysis for Oil and Gas Companies and Competitive Benchmarking 181 Siamak Javadi, Betty J. Simkins, and Mary E. Wicker 10 Petroleum Economics, Risk and Opportunity Analysis: Some Practical Perspectives 229 David A. Wood 11 Real Options and Applications in the Energy Industry 253 Betty J. Simkins and Kris Kemper 12 International Petroleum Fiscal System Design and Analysis 269 David Johnston 13 Financing Large Energy Projects 313 Stephen V. Arbogast and Praveen Kumar 14 Financing Bio-Fuels Projects: Case Study Lessons 343 Stephen V. Arbogast PART THREE Energy Risk Management and Related Topics 15 Energy Derivatives and Markets 365 Craig Pirrong and Mohsen Mollagholamali 16 Introduction to Energy Risk Management 379 Ivilina Popova and Betty J. Simkins 17 Risks in Trading Energy Commodities 411 Divya Krishnan 18 Carbon Management and Environmental Issues 425 Evgenia Golubeva 19 Hedging and Value in the U.S. Airline Industry 443 David A. Carter, Daniel A. Rogers, and Betty J. Simkins PART FOUR Case Studies 20 PKO Resources, Inc.: Valuing a Producing Oil and Gas Property 467 John D. Martin, J. Douglas Ramsey, and Sheridan Titman 21 Financial Analysis of the Purchase of a Hybrid Consumer Vehicle 477 Don M. Chance, Pratik Dhar, and Betty J. Simkins 22 ExxonMobil Corp. s Acquisition of XTO Energy, Inc.: An Exercise in Valuation 491 Allissa A. Lee and Betty J. Simkins 23 Southwest Airlines: The Blended Winglet Project 513 Aaron Martin, Daniel A. Rogers, and Betty J. Simkins 24 Wind Energy Power Company, Inc. (A): Analyzing a Wind Energy Investment 525 John D. Martin, J. Douglas Ramsey, and Sheridan Titman 25 A Case Study on Risk Management: Lessons from the Collapse of Amaranth Advisors LLC 543 Ludwig Chincarini Index 579 When it comes to the issue of energy finance and economics, there are many opinions out there, but what's really needed in order to gain a realistic understanding of this field are accurate and unbiased facts. That's why Energy Finance and Economics, part of the Robert W. Kolb Series in Finance, has been created. Engaging and informative, this reliable guide contains the latest insights regarding the finance and economics of energy based on contributions by practitioners and academics who are experts in these areas. It's intended to bridge the gap between the scientific and technological foundations of energy and the real-world applications in the fields of finance and economics. Divided into four comprehensive parts--with each chapter containing review questions to help reinforce key concepts--this book offers extensive coverage in the areas of valuation, analysis, and risk management, and includes timely discussions about the future of energy. Page by page, it addresses the most essential issues associated with energy finance and economics, and will help you: Gain valuable knowledge regarding energy supply and demand, industry structure, the myths and realities about sustainable energy, geopolitics and world energy use, and the drivers of energy prices. Develop a better sense of value creation and decision-making in the energy industry. Understand energy applications for best practices in financial analysis, including accounting standards that apply to oil and gas companies, capital budgeting and risk analysis for energy projects, and the economics of renewables. Become familiar with the various types of energy derivatives and markets, and utilize key hedging techniques useful to energy risk management. Put the field in perspective with practical case studies related to energy financial analysis such as the economics of buying a hybrid vehicle; Southwest Airlines' decision to retrofit their fleet of jets with blended winglets to save on fuel costs; and the economics of wind energy projects, among others. Energy finance is a complex topic, but with this book as your guide, you'll gain a broad understanding of it, and discover how it can be effectively applied in real-world situations

The Robert W. Kolb Series in Finance is an unparalleled source of information dedicated to the most important issues in modern finance. Each book focuses on a specific topic in the field of finance and contains contributed chapters from both respected academics and experienced financial professionals. As part of the Robert W. Kolb Series in Finance, Energy Finance and Economics provides a comprehensive look at this topic by examining the areas of valuation, analysis, and risk management that are associated with it and including timely discussions about the future of energy.

Written for both financial professionals and aspiring students, this reliable guide skillfully addresses the finance and economics of energy and covers the principles and tools necessary to conduct sound decision-making and analysis. Divided into four comprehensive parts, it touches on a variety of issues you need to be familiar with, including:

• Geopolitics and world energy markets
• The myths and realities of sustainable energy
• Financial statement analysis for oil and gas companies
• Financing large energy projects
• Petroleum economics, risk and opportunity analysis
• Energy derivatives and markets
• Carbon management and environmental issues

Rounding out this detailed discussion are six informative case studies that involve challenging analysis in different areas of energy finance and economics.

Energy Finance and Economics contains the latest thinking in this field from some of today's leading practitioners and academics. Engaging and accessible, this book provides a firm understanding of what it will really take to excel at this difficult endeavor.

The purpose of this book is to provide the latest information and insights into the finance and economics of energy, based on contributions written by todays thought leaders who are experts in various areas of energy finance and economics. Section 1 of the book will provide an overview of the energy industry and address energy finance and economics. Section 2 will focus on corporate finance topics relevant to the oil and gas industry. Section 3 will include chapters addressing unconventional, renewable, and alternative energy topics. Section 4 will focus on energy risk management and section 5 will include special topics related to energy finance such as hybrid cars, energy hedging, and other related and interesting current topics.