Risk management of mergers and acquisitions with borrowed capital in the energy sector

Under the conditions of macroeconomic instability and the difficulty of forecasting trends in the market development, a competitive recovery of the electric power business is possible only by attracting large capital investment. Mergers and acquisitions deals that make it possible to concentrate assets and to amalgamate the industry business are done through the leveraged buy-out (LBO) scheme. However, LBO deals are associated not only with the investor's risks, but also with the risks of the acquirers and vendors. The article presents the authors' model of risks formalization of LBO deals. It allows for consolidating the blocks of key project and financial indicators, parameters of a specific risk, and macroeconomic and sectoral factors. The developed model yields an indicative assessment of the degree of risk of LBO deals taking into account the industry specifics. A mechanism for determining the position of the creditor in the framework of LBO is proposed as a practical application of this model. The results of the study can be used by the management of energy companies, investors and analysts in making financial decisions. © 2018 WIT Press.The work was supported by act 211 of the government of the Russian federation, contract no 02.a03.21.0006

A risk-oriented approach to capital management at a power generation company in Russia

One of the challenges facing the energy industry today is how to improve investment attractiveness and business competitiveness in energy generation. It is becoming particularly important to enhance the sectoral risk management systems in order to ensure long-term growth and sustainable development in the energy sector amidst numerous factors and uncertainties created by the globalization of the financial markets. This paper presents the authors’ approach to assessing sectoral risks in the energy industry based on capital management for the purpose of achieving a certain level of long-term financial stability. The practicalities of applying the proposed approach to sectoral risk assessment are considered using a power generation company as an example. © 2014 WIT Press

Risk and profitability optimization of investments in the oil and gas industry

Finding an optimum ratio of return and risk of investment projects is the key problem in overcoming the unfavorable conditions of oil prices and the reduction of profitability of the oil and gas industry. Search for investment opportunities associated with the potential willingness of oil companies to raise funds in new projects, leading to the need for improved tools maximize the return of investment activity in the conditions of uncertainty and risk. In the article the authors propose an original approach which allows solving the problem of formation of a portfolio of investment projects that achieve the maximum return on the risks assumed. The approach includes a method for determining the credit quality of the investment project on the basis of probability of default. This method is based on a comprehensive multivariate analysis of the investment project. Factors model aimed at the country and regional analysis, identification of foreign exchange, operational, technological and financial risks of the project and obtaining the integral evaluation of the project credit. The approach also includes economic capital modeling based on the MV-model (Merton-Vasicek-model), allowing achievement of the target level of creditworthiness of an oil and gas company in the long run. The proposed method of estimating project profitability is based on RAROC (risk-adjusted return on capital) methodology which enables calculation of profitability of projects based on their riskiness. The results can be used by management of oil and gas companies, investors and analysts in making financial decisions.The work was supported by the Act 211 Government of the Russian Federation, contract № 02.A03.21.0006

An introductory guide to fluid models with anisotropic temperatures Part 1 -- CGL description and collisionless fluid hierarchy

We present a detailed guide to advanced collisionless fluid models that incorporate kinetic effects into the fluid framework, and that are much closer to the collisionless kinetic description than traditional magnetohydrodynamics. Such fluid models are directly applicable to modeling turbulent evolution of a vast array of astrophysical plasmas, such as the solar corona and the solar wind, the interstellar medium, as well as accretion disks and galaxy clusters. The text can be viewed as a detailed guide to Landau fluid models and it is divided into two parts. Part 1 is dedicated to fluid models that are obtained by closing the fluid hierarchy with simple (non Landau fluid) closures. Part 2 is dedicated to Landau fluid closures. Here in Part 1, we discuss the CGL fluid model in great detail, together with fluid models that contain dispersive effects introduced by the Hall term and by the finite Larmor radius (FLR) corrections to the pressure tensor. We consider dispersive effects introduced by the non-gyrotropic heat flux vectors. We investigate the parallel and oblique firehose instability, and show that the non-gyrotropic heat flux strongly influences the maximum growth rate of these instabilities. Furthermore, we discuss fluid models that contain evolution equations for the gyrotropic heat flux fluctuations and that are closed at the 4th-moment level by prescribing a specific form for the distribution function. For the bi-Maxwellian distribution, such a closure is known as the "normal" closure. We also discuss a fluid closure for the bi-kappa distribution. Finally, by considering one-dimensional Maxwellian fluid closures at higher-order moments, we show that such fluid models are always unstable. The last possible non Landau fluid closure is therefore the "normal" closure, and beyond the 4th-order moment, Landau fluid closures are required.Comment: Improved version, accepted to JPP Lecture Notes. Some parts were shortened and some parts were expanded. The text now contains Conclusion

Risk-oriented investment in management of oil and gas company value

Capital-intensive investment projects with high level of risk are the driver of the company's value growth, but under certain conditions they may lead to a default. The financial cycle specifics of the projects in oil and gas industry related to the need for significant initial investment, as well as structural specifics of raising capital, determine the necessity of an integrated and comprehensive assessment of investment risks. The article offers the author's approach to assessing the impact of investments on the value of oil and gas business, based on RAROC (risk-adjusted return on capital) indicator. A method of an investment project-risk assessment is devised taking into account modern approaches to risk management in the industry. Proposed is a selective algorithm for making an investment decision on the basis of a double criterion index of efficiency, with due regard to the taken risks and comparison of target and unacceptable solvency. The practical focus of the research is shown on the example of investment portfolio analysis of an oil and gas company. The results of the research can be used in the process of financial decision making by management of oil and gas companies, and by investors and analysts. © 2017 WIT Press

Properties of high-frequency wave power halos around active regions: an analysis of multi-height data from HMI and AIA onboard SDO

We study properties of waves of frequencies above the photospheric acoustic cut-off of $\approx$5.3 mHz, around four active regions, through spatial maps of their power estimated using data from Helioseismic and Magnetic Imager (HMI) and Atmospheric Imaging Assembly (AIA) onboard Solar Dynamics Observatory (SDO). The wavelength channels 1600 {\AA} and 1700 {\AA} from AIA are now known to capture clear oscillation signals due to helioseismic p modes as well as waves propagating up through to the chromosphere. Here we study in detail, in comparison with HMI Doppler data, properties of the power maps, especially the so called 'acoustic halos' seen around active regions, as a function of wave frequencies, inclination and strength of magnetic field (derived from the vector field observations by HMI) and observation height. We infer possible signatures of (magneto-)acoustic wave refraction from the observation height dependent changes, and hence due to changing magnetic strength and geometry, in the dependences of power maps on the photospheric magnetic quantities. We discuss the implications for theories of p mode absorption and mode conversions by the magnetic field.Comment: 22 pages, 12 figures, Accepted by journal Solar Physic

Spreading of a saturation front of heterogeneous chemical reaction througn an aerosol gloud

A cloud of aerosol particles sediments in air containing reactants. On the basis of a macroscopic chemical and mass transfer model founded on the kinetic theory of heterogeneous reactions we analyzed the spreading of chemical reaction through the cloud of aerosol particlesyesBelgorod State National Research Universit

Channeling 5-min photospheric oscillations into the solar outer atmosphere through small-scale vertical magnetic flux tubes

We report two-dimensional MHD simulations which demonstrate that photospheric 5-min oscillations can leak into the chromosphere inside small-scale vertical magnetic flux tubes. The results of our numerical experiments are compatible with those inferred from simultaneous spectropolarimetric observations of the photosphere and chromosphere obtained with the Tenerife Infrared Polarimeter (TIP) at 10830 A. We conclude that the efficiency of energy exchange by radiation in the solar photosphere can lead to a significant reduction of the cut-off frequency and may allow for the propagation of the 5 minutes waves vertically into the chromosphere.Comment: accepted by ApJ