Postgraduate Course: Energy Finance (CMSE11153)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Course type | Standard |
Availability | Available to all students |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Credits | 15 |
| Home subject area | Common Courses (Management School) |
Other subject area | None |
| Course website |
None |
Taught in Gaelic? | No |
| Course description | The course aims to integrate conventional finance with energy finance, and to provide a basis for understanding the links between these and carbon finance. The Course Organiser will draw on both theoretical and applied concepts and will be taught by experienced practitioners, with knowledge of structured and energy finance. In addition to introducing the students to the wider literature on energy finance, Dr Kretzschmar&©s publications and case studies will be used to ensure that students will come away from the course with specific skills in the evaluation of risks and opportunities associated with energy finance. |
Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | None |
| Additional Costs | None |
Information for Visiting Students
| Pre-requisites | None |
| Displayed in Visiting Students Prospectus? | No |
Course Delivery Information
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| Delivery period: 2011/12 Semester 1, Available to all students (SV1)
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WebCT enabled: Yes |
Quota: None |
| Location |
Activity |
Description |
Weeks |
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
| No Classes have been defined for this Course |
| First Class |
First class information not currently available |
| Exam Information |
| Exam Diet |
Paper Name |
Hours:Minutes |
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| Main Exam Diet S1 (December) | Energy Finance | 2:00 | | |
Summary of Intended Learning Outcomes
INTENDED LEARNING OUTCOMES
After completing this course, students should be able to:
&·Understand the nature of energy markets, and capital markets as sources of finance
&·Understand the investment decision frameworks for new energy projects, and have an appreciation for how investment risks may change over time
&·Appreciate the relationship between conventional project and corporate finance and energy project finance
&·Understand how commodities are commercialised in markets
&·Appreciate the risks associated with commodities, and the implications for financing projects
Cognitive Skills
After completing this course, students should be able to:
&·Critically evaluate press coverage of energy finance issues
&·Think analytically about the financial and strategic implications of energy investments for business
&·Conceptualise key strategic considerations associated with energy finance projects
&·Cooperate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work
Career and Subject-Specific Skills
After completing this course, students should be able to:
&·Understand new developments in commodity markets, and evaluate the implications for businesses involved in financing projects
&·Develop an understanding of how conventional financing products can be applied to raise finance for energy projects
&·Be able to evaluate project risks and opportunities in specific terms. Students graduating from this course will be better prepared to work in financial analysis, valuation, and trading positions with major oil and gas exploration, production, and distribution companies (such as BP, Shell, ConocoPhillips), energy trading firms, power companies (such as Cinergy, and Duke Energy), as well as developing the skills needed by leading investment banking and financial services firms in the energy industry (e.g. Wood Mackenzie, Goldman Sachs)
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Assessment Information
Case Study group presentation 10%
Written coursework 30% (group 15% and individual 15%)
Exam $ú 60%
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Special Arrangements
| None |
Additional Information
| Academic description |
Not entered |
| Syllabus |
Week 1
Introduction to Markets, Annual Financial Statements: what commodity, energy, project and corporate finance means, how it relates to conventional finance, and an outline of course company financial statements. We will also cover the assessment process and group projects.
Capital markets: an overview of the different capital market instruments, and their implications for business.
Higgins Chapter 5
Week 2
Introduction to Commodities: what energy finance means, how it relates to conventional finance
Returns, Volatilities and Sharpe ratios: an overview of the different commodity attributes, and their implications for business.
Dr Kretzschmar $ú Research Papers - Global Finance Journal, Fama French
Week 3
The Financing Decision: understanding the concept of capital market access and capital structure - debt and equity costs
Energy Financing - Higgins Chapter 6
Week 4
The Financing Decision: Continued - understanding the concept of capital market access and capital structure - debt and equity costs
Case study: assessing financial structure for a project.
Week 5
The Investment Decision: engage and apply the tools of present value, net present value, payback, discounted payback and IRR
Class study: Investment decision $ú Higgins Chapter 7, end of chapter questions
Week 6
Reading Week: (No classes)
Week 7
Case Study $ú Project Investment: Detailed project analysis review.
Case Study 1: Presentation for 10% of year mark.
Week 8
Futures $ú forwards $ú and option contracts: Introduce students into the existence and use of derivatives for risk mitigation
Week 9
Revision
Week 10
Project Hedging of Risk: Case study risk mitigation - presentation
Case Study 2: De Mello: Selected and - Oilfield investment case
Week 11
Special topic 2: AK $ú Advanced topic - not examinable
Hand In Final assignment $ú last week
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| Transferable skills |
Not entered |
| Reading list |
ESSENTIAL READING
Higgins, Financial Management, 9th Edition
De Mello, Cases in Finance, 2nd Edition $ú these will be handed out in the lecture
RECOMMENDED READING
Academic paper references will be made in the lecture notes, these will be primarily Energy Policy and Energy Economics papers.
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| Study Abroad |
Not entered |
| Study Pattern |
Not entered |
| Keywords | EF |
Contacts
| Course organiser | Mr Gavin Kretzschmar
Tel: (0131 6)50 2448
Email: Gavin.Kretzschmar@ed.ac.uk |
Course secretary | Miss Rachel Allan
Tel: (0131 6)51 3757
Email: Rachel.Allan@ed.ac.uk |
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© Copyright 2011 The University of Edinburgh - 16 January 2012 5:50 am
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