CASE STUDY

Calculating Expected Monetary Value and Improving Capital Allocation Process for an Energy Company in the US

Sep 24, 2019

US Energy Sector Outlook

The US energy sector is undergoing through a period of transformation driven by technological and competitive forces apart from changing customer expectations. As such forces accelerate, companies are tapping new sources to serve their customers. Natural gas is expanding its share in the market and price volatility is increasing amidst rising business opportunities.  This case study will help you better understand the challenges companies face in the US energy sector.  

Business Challenges Faced

The client, a leading company in the US energy sector wanted to bid for the right to develop a new gas field. However, before bidding, they wanted to weigh the risks and analyze different factors that can impact their return on investments. Their primary aim was to prepare themselves to meet the increasing demand apart from creating electricity by natural gas-fired power generation plants. As gas is relatively cleaner and becoming the fuel of choice for consumers, they wanted to know how much to bid to explore for oil and gas in blocks asked by the government while complying with regulatory norms. Also, they wanted to address challenges occurring due to uncertainty in prices of new technologies and the associated supplier risks beforehand.

Increasing volatility in prices can make it difficult for companies in the US energy sector to calculate the financial viability of their projects. Request a free proposal to access for specific insights and our experts will get back to you asap.  

[vc_btn title=”REQUEST FREE PROPOSAL” color=”primary” align=”center” link=”url:https%3A%2F%2Fwww.spendedge.com%2Frequest-free-proposal|||” button_block=”true”]

Our Research Approach

With a thorough understanding of the factors for supply disruptions and geopolitical risks involved in the US energy sector, the procurement market intelligence experts analyzed the countries where the company could operate in accordance with regulatory laws. They emphasized on financial and non-financial factors and gained necessary insights to make informed business decisions. This helped the client to predict the environment cost involved in extracting and bringing gas to final consumers.  

Furthermore, the experts provided in-depth insights into taxation and contract structure and identified suppliers across various regions. This improved their visibility across the supply chain. Also, this enabled the client to implement a discounted cash flow technique for investment appraisal and calculate the value of future returns on investment by assessing the values of these returns in terms of their value today.

[vc_cta h2=”Want to know how our customized US energy sector analysis can help companies investing in energy sector to make informed business decisions?” h2_font_container=”font_size:18″ h2_google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:500%20bold%20regular%3A500%3Anormal” style=”outline” color=”turquoise” add_button=”right” btn_title=”CONTACT US” btn_color=”success” btn_align=”right” use_custom_fonts_h2=”true” btn_link=”url:https%3A%2F%2Fwww.spendedge.com%2Fcontact-us|||” btn_button_block=”true”]Get in touch with our experts now! [/vc_cta]

Engagement Outcome

Appraising investments using the discounted cashflow method helped the company to improve their capital allocation process and rank projects based on the value they could deliver to the company.  Also, the proper assessment of risks in the US energy sector helped the client to calculate Expected Monetary Value (EMV), bid precisely, and calculate the success of the project.

Calculating EMVs require US energy sector companies to analyze different factors impacting the market.  Request a free demo to access our web-based procurement platform and gain industry-specific insights.  

US Energy Sector Trends to Watch Out for in 2019 and Beyond

  • The federal environmental regulation rollback is expected to continue.
  • Local governments are likely to push clean energy and climate policies.
  • Advances in hydraulic fracturing and horizontal drilling can increase gas generation.

Gaining comprehensive market insights is vital for energy sector companies to identify the latest trends and make better investment decisions. Request for more information to obtain detailed insights.

GET MORE INFO

Recent Case Studies

Industries

Services

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars