Reservoir Characterization of the Brae Formation, South Brae Field, UK North Sea

The South Brae Field is located 166 miles off the coast of Aberdeen, Scotland in the UK sector of the North Sea. The Upper Jurassic Brae submarine channel-fan complex deposits are the primary hydrocarbon reservoirs in UK Blocks 16/07a and 16/07b. The field is composed of channelized silici-clastic slope-apron and fan deposits from high- to low-density debris flows, sandy and muddy turbidites, and hemipelagic settling. They were deposited during the Late Oxfordian to Middle Volgian. The Kimmeridge Clay Formation is a regionally-extensive, organic-rich, transgressive shale—deposited concurrently—that separates the Brae Formation from the overlying Cretaceous deposits and serves as the source rock and stratigraphic seal. The reservoir is trapped by the western escarpment of the South Viking Graben, which formed as a result of Permo-Triassic rifting and additional Middle to Late Jurassic rifting events. The Brae formation is composed of seven main lithofacies including conglomerate, pebbly sandstone, sandstone, sandy siltstone, silty shale, shale, and calcite-cemented sandstone. Core descriptions, thin-section petrography, x-ray diffraction, and core plug measurements were used to understand the lithological, depositional, and petrophysical variations of the formation. Log-based, and seismic stratigraphic correlations were used to identify second-, third-, and fourth-order stratigraphic sequences. Thickness maps of the subunits within the Early to Middle Volgian – J66 – third-order sequence and spectral decomposition of the seismic volume aided the identification of depositional fairways within the upper part of the Brae Formation. Electrofacies were generates using supervised multi-variate cluster analysis and artificial neural network classification models. The classifications showed overall accuracies around 90 percent. Facies proportion maps were constructed to understand their lateral distribution within the third-order sequence. Log-based and seismic stratigraphic interpretations of fourth-order sequences within the J66 sequence helped to illustrate the internal distribution of the reservoir-quality facies (sandstones, pebbly sandstones, and conglomerates) within the depositional fairways. The lower subunit of the J66 system – the Ac subunit – is composed of laterally- and vertically-connected channel-fills and fans with a high abundance of thick calcite-cemented sandstone concretions that impede the flow of fluids within the reservoir. The Aa subunit – the upper part of the J66 sequence – primarily contains isolated channel-fills with a smaller amount of calcite concretions. Both subunits are composed of sandstone, pebbly sandstone, and conglomerate channel-fans and fans that were deposited after incision into muddy turbidite units that underlie them

Pecking order theory of capital structure: empirical evidence from dynamic panel data

This paper tests the relation between profit and long term debt as well as the relation between profit and total debt in South Africa. This paper specifies a dynamic panel model and uses generalized method of moments (GMM) estimation technique which gives better results. The results show that profit has significance negative relation with long-term debt. Similarly, profit has significant negative relation with total debt. The results support the pecking order theory and signify the presence of asymmetric information problem between firm and its financiers. Besides, the results imply need to further develop the capital market in order to minimize information asymmetry costs associated with raising external capital. Moreover, evidence of trade-off theory is also present in the results

Interaction effects of country-level governance quality and debt on stock returns in developing nations

This study examines the moderating effects of country-level governance quality on the relationship between debt and stock returns, using 3,891 firms from 23 developing countries covering the period from 2006 to 2014. Applying the panel generalized method of moments to control for endogeneity, the findings reveal that country-level governance quality has positive moderating effects on the relationship between book debt and stock returns. Robustness check using market debt show that country-level governance quality has positive moderating effects on the relationship between market debt and stock returns. Additional analysis controls for the financial crisis years and the results are broadly similar, except that the coefficients of some variables change. The results suggest that strong governance quality lowers financial risk which encourage firms to raise debt capital needed to maximize stockholders’ returns

Debt and cash flow relationship in pecking order theory of corporate financing: dynamic panel evidence

The paper investigates relationship between cash flow and debt. The panel generalized method of moment results reveal that cash flow is negatively related to both long term debt and total debt ratios. Our results support the pecking order theory of corporate financing and imply that there is a need for further development of the capital market to minimize the information asymmetry problem between the firms and the firms’ financiers, to provide firms with easier access to debt and equity financing

The impact of monetary policy on bank lending rate in South Africa

The pass-through of the policy rates to bank lending rate is an important subject matter because it measures the effectiveness of monetary policy to control inflation or stabilize the economy. This study investigates the long-run interest rate pass-through of the money market rate to the bank lending rate and asymmetric adjustment of the bank lending rate. The study applies the momentum threshold autoregressive and asymmetric error correction models. The asymmetric error correction results reveal that bank lending rate adjusts to a decrease in the money market rate in South Africa. The findings suggest that the South African commercial banks adjust their lending rate downward but the lending rate appears rigid upward, which supports the customer reaction hypothesis

Top management characteristics and firm's international diversification activities: evidence from a developing nation

Recent trend shows that foreign investment has increased rapidly, and raises a question as to whether managerial characteristics impact international diversification, as claimed by the Uppsala internationalisation process theory. This paper investigates the relationship between top management team's characteristics and firm's Outward Foreign Direct Investment, that is, international diversification. This study focuses on 83 of the top 100 largest Malaysian multinational firms. The entropy measure is used as the proxy for level of international diversification. Age, international experience, educational level and functional background are proxies reflecting the management's cognitive abilities and competencies. The findings showed that age and functional background have significant positive influence on the level of international diversification. In addition, the results also suggested there is a reasonable support for upper echelons theory and Uppsala internationalisation process theory

Impact of Capital Structure on the Performance of Nigerian Banks

Capital structure has attracted intense debate and scholarly attention in the financial management for over 40 years. However, the context of West Africa, capital structure has received little attention. This research attempts to fill this gap by analyzing and assessing the effect of debt and equity on the performance of 15 banks in Nigeria. The results indicate that debt has significant negative effect while equity has significant positive effect on the performance of Nigerian banks

Impact of leverage and managerial skills on shareholders' return

The recent financial crisis that saw an increase in the risk premium and shareholders’ return around the world is partly caused by the management use of excessive leverage. This paper investigates the effect of leverage and managerial skills on shareholders’ return. Our regression analysis that accounts for managerial skill factors reveals that leverage has a positive relationship with shareholders’ return. Similarly, managerial skills have a positive relationship with shareholders’ return. Based on the findings, the study suggests that leverage and managerial skills may be priced in equity valuation. We develop an index measure of managerial skills and use the upper-echelon theory of the management literature to explain how managerial skills relate to shareholders’ return

Dynamic Relationship between Debt and Cash flow in Pecking Order Theory: Evidence from Panel GMM

The paper investigates the relationship between cash flow and debt for South African firms. The difference generalized method of moment results show cash flow has significance and negative relationship with debt. Similarly, the system generalized method of moment results show negative relationship between cash with debt. The results affirmed pecking order theory of corporate financing and it reveals the incidence of asymmetric information problem between the firm and its financiers. Besides, the results imply a need to further develop South African capital market in order to reduce information asymmetry costs associated with raising external finance. Moreover, evidence of trade-off theory is also presented in the results which suggest that the dynamic nature of firms’ capital structure decision deserves attention. Keywords: Capital structure; debt ratio; cash flow; pecking order theory; panel GMM; South Africa

Does environmental Kuznets curve hypothesis exist? evidence from dynamic panel threshold

Carbon dioxide (CO2) emissions have been rising globally and have raised public concern regarding their detrimental effects to human life. This article investigates the validity of the Environmental Kuznets Curve (EKC) hypothesis in developing countries in a nonlinear framework. The article applies the dynamic panel threshold method, which is able to estimate the EKC turning point. The main findings reveal the existence of a nonlinear relationship between income (GDP per capita) and carbon dioxide emissions. Precisely, for developing countries (low and middle income) the results reveal that GDP per capita is positive and significantly related to CO2 emissions, below and above the threshold. These results challenge the validity of the EKC hypothesis in developing countries, suggesting that developing countries are still below the desired income turning point, at which better economic development will lead to reduced environmental damage. Based on the study findings, it may be inappropriate for the policymakers in developing countries to adopt the EKC postulate as the theoretical basis for policies favouring economic growth