A financial analysis of risks in poland from the perspective of eog september 11 2013
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A Financial Analysis of Risks in Poland from the perspective of EOG September 11, 2013. Christopher Denny Elena Shrestha Vera Uboytseva Ayodele Sonupe. Background Info. $48 billion company spun off of Enron in 1999 (pre-bankruptcy) First mover in the Bakken Shale play in 2008

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A financial analysis of risks in poland from the perspective of eog september 11 2013

A Financial Analysis of Risks in Poland from the perspective of EOGSeptember 11, 2013

Christopher Denny

Elena Shrestha

Vera Uboytseva

Ayodele Sonupe


Background info
Background Info. of

  • $48 billion company spun off of Enron in 1999 (pre-bankruptcy)

  • First mover in the Bakken Shale play in 2008

  • First mover in the Eagle Ford Shale play in 2010

  • Acquired large plots of land at very attractive rates at the time

  • Divested dry gas assets to focus more on liquid assets before the collapse in natural gas prices

  • Has grown production at a CAGR of 38% over the last seven years



Economic outlook
Economic Outlook of

Foreign Exchange

Potential causes for foreign exchange movement

  • The Zloty has reacted to the Eurozone crisis

  • The Polish Central Bank intends to intervene in the foreign exchange market to strengthen the Zloty

  • Interest rates in Poland is high

  • Poland intends to adopt the Euro

Source: Global Insight Economic Data

Source: Global Insight Economic Data


Economic outlook1
Economic Outlook of

Interest & Inflation Rate

Inflation

  • Domestic demand in Poland may increase

  • Close attention is paid to monetary policies

  • Poland needs to ensure that interest rates remain at no more than 1.5 percentage points above the average of the three European Union countries with the lowest inflation.

    Interest Rates

  • Euro crisis is eroding growth in Poland

  • Inflation is expected to remain low

  • The polish central bank intends to strengthen the Zloty

Source: Global Insight Economic Data

Source: Global Insight Economic Data


Economic outlook2
Economic Outlook of

Fiscal Policy & Balance of Payments

Fiscal Policy

  • Poland has no tax regulations around upstream extractions

  • Revenues are projected to fall below target but the polish government cannot continue to cut spending because of domestic demand stimulus

    Balance of Payments

  • There is a decline in the amount of imported goods

  • Exports in Poland is dependent on the demand from Euro buyers

  • Domestic demand in Poland is struggling.


Financial market
Financial Market of

Factors involved in the development of financial market:

  • One of the fastest growing economies in Europe

    • In 2010, the Polish economic growth rate was 3.9%

  • The growth of the Warsaw Stock Exchange (WSE) facilitated the development of Poland’s capital market

  • Derivative instruments for currencies and interest rates started being traded in the mid-1990s

  • Polish banks and foreign banks actively participated in the OTC derivatives market.

  • Liquidity is primarily created by foreign banks.

  • Foreign investors play a major role in the futures and options market of the WSE.


Financial market derivative instruments
Financial Market – Derivative Instruments of

  • Investor structure on the options market. 

  • Investor structure on the futures market. 



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