EME 460 - Geo-Resources Evaluation and Investment Analysis
This is a sample syllabus.
This sample syllabus is a representative example of the information and materials included in this course. Information about course assignments, materials, and dates listed here is subject to change at any time. Definitive course details and materials will be available in the official course syllabus, in Canvas, when the course begins.
Overview
The objective of the course is to ensure students learn the techniques used in geo-resource project evaluation, discounted cash flow, interest rate, tax consideration and uncertainty and risks in engineering project evaluation. Some introductory knowledge about mineral reserve estimation, risk management and geostatistics, and mine feasibility will be covered.
The course will train students to apply cost engineering methodology for geo-resources including minerals, oil, natural gas and coal. Students will apply present value, rate-of-return analysis, and cost engineering methodologies to evaluate engineering projects involving geo-resource exploration and production. Students will learn and are expected to be able to perform oil, natural gas, and mineral reserve estimations and evaluate production decline characteristics using geometric and geo-statistical methods. They will also learn about uncertainty and risk management as they apply to engineering project evaluations involving geo-resources. The course will be offered in fall and spring semesters and is intended for students with at least fifth-semester standing.
Note: This course may require you to take exams using certain proctoring software that uses your computer’s webcam or other technology to monitor and/or record your activity during exams. The proctoring software may be listening to you, monitoring your computer screen, viewing you and your surroundings, recording and storing any and all activity (including visual and audio recordings) during the proctoring process. By enrolling in this course, you consent to the use of the proctoring software selected by your instructor, including but not limited to any audio and/or visual monitoring which may be recorded. Please contact your instructor with any questions..
Objectives
When you successfully complete this course, you will be prepared to apply:
- Microsoft Excel (or other spreadsheet programs) to your assessment and calculations;
- economic and engineering evaluation of geo-resources extractive projects;
- the meaning of the cash flow in production driven projects;
- present value, rate of return analysis and break-even analysis;
- economic indicators: growth rate of return, present value ratios, pay back;
- decision making in non-mutually exclusive and mutually exclusive projects;
- cost estimation and engineering economy concepts applied to geo-resources extractive projects;
- economic sensitivity analysis;
- risk management and commodity price forecasting;
- escalated and constant dollars;
- depreciation, depletion, amortization and after-tax cash flow.
Required Materials
The materials listed here represent those that may be included in this course. Students will find a definitive list in the course syllabus, in Canvas, when the course begins.
Stermole, F.J., Stermole, J.M. (2014) Economic Evaluation and Investment Decision Methods, 14 edition. Lakewood, Colorado: Investment Evaluations Co. (12 or 14 edition also work), ISBN-10: 0991194101 | ISBN-13: 978-0991194100
- The 12th or 14th edition may also work, but I will assign the reading materials according to the 13th edition.
- Please get your textbook before the end of the 1st week.
- There are 2 copies of the 13th edition of the textbook in the EMS library reserved for 2 hour reading.
Prerequisites
None
Expectations
We have worked hard to make this the most effective and convenient educational experience possible. How much and how well you learn is dependent on your attitude, diligence, and willingness to ask for clarifications or help when you need them. We are here to help you succeed. Please keep up with the class schedule and take advantage of opportunities to communicate with us and with your fellow students. You can expect to spend an average of 10 - 12 hours per week on class work.
Major Assignments
9 Homework Assignments (drop the lowest grade): 20% of total course grade
10 Quizzes (drop the lowest grade): 15% of total course grade
1 Mid-term Examination: 25% of total course grade
1 Final Examination: 25% of total course grade
Course project: 15% of total course grade
Discussion forum participation: potential 2% extra credit
Course Schedule
| Week | Topic | Assignment |
|---|---|---|
| 1 | Investment Decision Making and Compound Interest Formulas |
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| 2 | Present, Annual, and Future Value, Rate of Return and Break-even Analysis |
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| 3 | Annual Percentage Rates, Salvage Value, Bond Investment and Financial Cost of Capital, NPV, B/C Ratio, Present Value Ratio |
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| 4 | Mutually Exclusive and NON-Mutually Exclusive Project Analysis |
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| 5 | Escalated and Constant Dollars |
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| 6 | Uncertainty and Risk Analysis |
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| 7 | Depreciation and After-tax Cash Flow |
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| 8 | Income Tax and Cash Flow Analysis |
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| 9 | After-tax Decision Methods and Applications |
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| 10 | Evaluation Involving Borrowed Money | |
| 11 | Course Project |
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| 12 | Personal Investments and Hedging |
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| Final Exam | ||