Association Of Chartered Certified Accountants

For this assignment, I would like you to read the MW Petroleum Case (B) and answer the following questions. By answering some of these questions you will be able to start to prepare your written case assignment that will be due during the last week of the semester.

What problems face Amoco and Apache in bringing this transaction to completion? What are the firms' objectives?

What possible alternatives might exist to solve the stalled negotiations? Please do not necessarily limit yourself to the ones mentioned in the case – be creative!

How can you express the proposed solution in terms of the financial contracts studied in this course? (hint - think about the options strategies from Lesson 7, in particular the zero-cost collar), Why do you think the deal is structured as given in Exhibit 7? What other ways might it have been structured? What might have been the pros and cons of other structures?

To help your analysis, here is a spreadsheet that contains the information provided in the Exhibits to the case: MW Petroleum Case B Worksheet.xls Preview document