Petrolera Zuata Petrozuata C A

Petrolera Zuata Petrozuata C A

Excel Calculations

Leverage Sensitivity Analysis

Leverage (%) , Minimum DSCr ( x Times) , IRR (%) 

Equity Returns 

Equity Investment , ROE, Dividends, Ending Equity Value, Equity as a percentage of Firms Value,Equity Beta, ROE, Discount Facotr, PV of Cash Flows

Sensitivity 

Monte Carlo Output Table

Questions Covered

How should PDVSA finance the development of the Orinoco Basin?  What are the costs and benefits of using project finance instead of traditional internal finance?

What are Petrozuata’s three or four most important operating risks?  How does the deal structure address these risks?  Who would bear these risks if the project were financed internally by PDVSA instead?

As currently envisioned, debt will comprise 60% of the funds needed for the project.  Would you recommend a higher or lower leverage ratio? What happens to the minimum debt service coverage ratio and internal rate of return on equity as project leverage increases to 70% of project funds? Decreases to 50%?

What kind of debt (agency debt, bank debt, or Rule 144A bonds) should the sponsors use to fund the deal?  What are the advantages and disadvantages of each kind of debt?

Will project bonds receive an investment grade rating?  What is the “weakest link” in the project?

As one of the sponsors, what are your expected returns?  Please assume the asset beta for an integrated drilling, pipeline and refining firm is 0.60.

What kind of sensitivity/scenario analysis would you do to verify the project’s economics?

Would you invest in project bonds?  Would you invest equity capital as Conoco?

How should PDVSA finance its other oil field projects?