Pioneer Petroleum is a multinational corporation that is in position to capitalize on investments all around the World. Within the industry Pioneer’s gasoline are among the cleanest burning fuels. They are better position than most to meet strict environmental guidelines as they currently have clean efficient running plants positioned to capitalize on less polluted products. Also Pioneer Petroleum is heavily involved in exploration and devilment. From 1924 to the present‚ pioneer has been able
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INTRODUCTION Background Pioneer Petroleum was founded in 1924‚ through a merger within industrial‚ pipeline transportation‚ and refining fields. PP has evolved over the last 60 years into a company that now also works with agricultural chemicals‚ plastics‚ and real estate development concentrating in gas‚ oil‚ petrochemicals‚ and coal. In 1990‚ PP improved their coker and sulfur recovery facility to make their refining process more efficient and in turn has become one of the lowest cost refiners
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Pioneer Petroleum Cases Analysis The Problem: Pioneer Petroleum Corporation (PPC) has two major problems that are interfering with the goal of the firm to maximize shareholder wealth. The first is that PPC has been calculating their weighted average cost of capital incorrectly‚ by incorrectly calculating their after tax cost of debt and their cost of equity. This miscalculation has subjected PPC to more risk and has hurt the company’s ability to make appropriate investment decisions. This has
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TO: VEFA TARHAN‚ SPECIAL TOPICS IN FINANCE FROM: MAHMUT MACIT‚ AHMET ARDA ATIK‚ CAN KORKMAZ DATE: NOVEMBER 4‚ 2014 CASE: PIONEER PETROLEUM CORPORATION Overview of the Company Pioneer Petroleum Corporation established in 1924 and operating in oil refining‚ pipeline transportation‚ and industrial chemical fields. Company uses weighted-average cost of capital (WACC) as a discount rate to discount future cash flows that generate from possible projects. According to net present values of these possible
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Pioneer Petroleum Corporation’s (PPC) has been through a diverse amount of changes throughout the years. They were originally were a merger of several different independent firms operating in the oil refining‚ pipeline transportation‚ and industrial chemicals fields. PPC then integrated vertically into exploration and production of crude oil and marketing refined petroleum products‚ but horizontally into plastics‚ agricultural chemicals‚ and real estate development. They decided to restructure
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Application of Capital Structure‚ Costs of Capital for Multiple Division firms Case Analysis: Pioneer Petroleum Corporation (PPC).1 Submitted by: Joseph Donato N. Pangilinan‚ FICD Date Presented: April 12‚ 2012 Introduction: This landmark case seeks to break the risk-reward trade off involved in calculating Capital Cost. The object of the solution must be to minimize project risks while maximizing project opportunities available. We want a rate and a rating system that does not unnecessarily
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Conflict in Organizations Texana Petroleum Corporation Background The Texana Petroleum Corporation is a multi-million dollar company and major producer and marketer of petroleum products located in the southwest United States. Texana has five product divisions: Petroleum Products Division‚ Polymer and Chemicals Division‚ Molded Products Division‚ Packaging Products Division and Building Products Division. The President and Chief Executive Officer‚ Roger Holmes retired in 1993 and was replaced
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CASE CONTEXT: Formed in1924 with the merger of several formerly independent firms operating in the oil refining‚ pipeline transportation‚ and industrial chemical fields. All computations were based in 1975 data PROBLEM: Determination of a minimum acceptable rate of return on new capital investments in 1975. Should the company adopt a system of multiple cutoff rates? FRAMEWORK OF ANALYSIS: WACC Return on Assets Cost of Common stock equity ANALYSIS: The management
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Chapter 6 (Case 6-1 CHINA PETROLEUM AND CHEMICAL CORPORATION) 1.The net profit figure reported under PRC GAAP is RMB 19‚011 million. This is RMB 2‚592 million lower than the amount under IFRS‚ and RMB 6‚566 million lower than the amount under U.S. GAAP. The net profit figure of RMB 19‚011 reported under PRC GAAP was increased to RMB 21‚593 under IFRS. The increase of RMB 2‚582 under IFRS was due to the following reasons: Dep. and disposal of oil and gas properties RMB3‚044 Acquisition of subsidiaries
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2. Case: Pioneer Petroleum Note that p.2 of the case incorrectly states that the firm’s debt policy is that debt should comprise 50% of its total capital structure‚ defined as “long-term debt plus book equity.” The correct text should state “long-term debt plus market equity.” Answer the following questions: a. Does Pioneer estimate its overall corporate weighted-average cost of capital correctly? I think they´re WACC is correctly estimated. They use 50% debt and 50% equity‚ which I think is very
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