C a p r ic a e n e r g y a n d its

choices

G u i d e d by: Group 7
Dr. Vidhe e Av a s h i a A n u ra g cha n d e l (03)
Nihal b a i ra g i (29)
Vi s h v a aparnathi(52)

1
MEB
 Introduction
• 4 0 year old company, founded in Charleston, West
Virginia, in1970
• 8 3 % of its total production in natural gas
• Strategy- to grow its reserves, production, net income
and cash flow while maintaining operational integrity
• Focusing on hydraulic fracturing operations in 2005

MEB 2
 Tight sands gas Gas shale Coal bed methane
• 2.5 TcF- total • 5 0 0 TcF- Total
quantity of natural quantity of natural • 7 5 BcF – Caprica’s
g a s in Reservoire. g a s in reservoir opportunity
• 0.1 Tcf –Caprica’s • 2 5 BcF- Caprica’s • 300-500 feet from
opportunity opportunity the surface
• 1 0 wells required • 5 wells required • Net profit $0.50
• > 4 0 0 0 feet below • Up to 9 0 0 0 feet to
the surface below the surface $1.50 per thousand
• Net profit $ 1 to $2 • Net profit $0.80 per cubic feet
per thousand cubic thousand cubic feet • 0.08 million gallons
feet • 8 million gallons of water required
• 4 million gallons of water required • Rocky mountain
water required • Pennsylvania region
• West Texas

MEB 3
 Conventional vs.
Unconventional Gas

MEB 4
Hydraulic fracturing

MEB 5
 Drawbacks
• Disclosure of information which chemical is used in
fracking
• Ground water contamination
• Fluid disposal on ground
• Significant amount of water used in hydraulic
fracturing
• More number of accidents and leakage occurs
• Toxic chemicals used
• Diseases/death
MEB 6
Jane Barrow, CEO of Caprica Energy
has to prepare a recommendation for
the company’s board of directors about
the three development possibilities,
each with its own potential risks and
rewards

MEB 7
S W O T Analysis

Strength We a k n e s s
-More
- Experienced
investment in
-Good technology
returns on -Non eco-
capital friiendly strategy
expenditure

Opportunity Threats
-Fast - Competition
growing - Face lawsuit
sector - EPA report
-High oil
and g a s cost

MEB 8
 Discuss the advice of Peterson and
brown
• D o u g Brown
› He was enthusiastic about hydraulic fracturing
› Minor leaks
› No one has died or been seriously hurt in, what, 100,000
hydraulic fractures impossible for the chemicals to get into
aquifers
› The fluid goes down s o me 5,000 feet and underground water
are only about 3 0 0 feet
› S o m e chemicals getting into the aquifer would not necessarily
adversely affect people, a oneMEBin a million chance of 9
 Contd.
• M i l o Pe t e r s o n
› He disagree with the brown comment
› He indirectly stated that there are much chances of
aquifer contamination from hydraulic fracture
› Too m any incidents of river and lake contamination
throughout the country
› Casing used to separate the wellbore from the water
table is often faulty and doesn’t keep the fluid from
MEB 10
 Which of the three option is most practical
and economical? W h y ?
• According to us, tight sand g a s project option is good
to go.

• Why?
› Higher return of netting $ 1 to $ 2 per thousand cubic
feet
› Extract 0.1 TcF of natural g a s which is highest in all 3
option
› Fewer than 4 0 people lived within one mile radius
MEB 11
 What are you most worried about in
this decision?
• Environmental protection agency(EPA) report

• Why?
› Micromorts
› Net present value of cash flow
› Use of eco friendly chemicals
› Lifecycle, impacts and effects of
fracking
MEB 12
 What recommendation would you make if you
were Jane Barrow?
• Switch to eco-friendly chemical

• Research and development

• Wait for EPA report and will follow recommendation

• Re-use of water and chemical in fracking process

• Proper safety measures will follow

MEB 13
Thank
you!