Developing Strategic Projects - Project Executive Group

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Decision Support Package A: Strategic Decision Policy Decisions - Already Made Capital is available from the parent company for good investments Financial guidelines include a 12% cost of capital discount rate Deadline for a recommendation is tomorrow Strategic Decisions - for Team Focus Plant size - 0, 25, 50, 75 or 100 mcf Location - Deer Creek or Future Supply Area Facility - Leverage Deer Creek or Build New Return on Investment Meet Producer’s Current and Future Needs GasCo Corporate Value - NPV Plant Capacity And Utilization Future Strategic Value Reputation $ MM NPV (10) 0 10 20 30 35 40 Utilization Tactical Decisions - to be made later Operator ship - internal control or outsource Specifications - electric or gas drive, etc. Sulphur handling - production or injection Capital Risk Producer Contracts Influence the Competitor Design and Operating Results Competitor’s Move Fees / Volume • Reserves - current deliverable and future • Capital costs of project • Economics of the operation • Competition in the area • Future projects and strategic value • Early abandonment costs Operating Costs Capital Costs Abandonment Costs Current Contracts Beat Competition Current Contracts Beat Competition Wait for Future Forecasting Reserves For Future Competitive Intelligence Marketing Operations Contracts (Utilization) Operating Costs Forecasting Competitor Actions Current Reserves Fees Operations Strategic Planning Future Projects Costs to Abandon Strategic Value-NPV Operating NPV Capital Investment Engineering Corporate Value 12% WACC Lifetime years + residual value Investment Current Contracts $ 23.4 Capital Beat Competition $ 31.2 Capital Wait for Future $ 0 Capital Competitor Competitor Out Competitor In Competitor Out Competitor In Utilization Fully Utilized Partial Utilization Fully Utilized Partial Utilization Fully Utilized Partial Utilization Fully Utilized Partial Utilization NPV $ 11 M $ 6 M $ 1 M $ (4) M $ 36 M $ 21 M $ 19 M $ (2) M $ 0 M Source: Copyright: 1994 – 2005 Decision Strategies, Inc. Includes material copyright 1994 – 2002 Kenneth R. Oppenheimer
Decision Support Package B: Breakeven & NPV
Page 1 and 2: Developing Strategic Projects PMI H
Page 3 and 4: The presentation is an overview of
Page 5 and 6: The Strategic Decision Development
Page 7 and 8: Strategic Project Development Progr
Page 9 and 10: IDM (Integrated Decision Management
Page 11 and 12: Developing Strategic Projects Strat
Page 13 and 14: The Strategy Execution Model Corpor
Page 15 and 16: Decision Execution Discovery Framin
Page 17 and 18: Decision Execution Development Proj
Page 19 and 20: Life Cycle of the Development 1. Pr
Page 21 and 22: Developing Strategic Projects Proje
Page 23 and 24: Project Management Process Groups P
Page 25 and 26: Life Cycle according to the MPMM Me
Page 27 and 28: Example of a Project Management Met
Page 29 and 30: Example of a Project Management Met
Page 31 and 32: Documentation (Security Packages) R
Page 33 and 34: Risk Issues in Detail - Cross-Borde
Page 35 and 36: Modules in Strategic Project Financ
Page 37: Developing Strategic Projects Risk-
Page 41 and 42: Developing Strategic Projects Monit
Page 43 and 44: www.projectexecutive.com/

Developing Strategic Projects - Project Executive Group

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