Case | HBS Case Collection | February 1995 (Revised April 1996)

MW Petroleum Corporation (B)

by Timothy A. Luehrman, Peter Tufano and Barbara Wall

Abstract

Amoco Corp. is negotiating to sell a wholly-owned subsidiary, MW Petroleum, to Apache Corp. MW owns large reserves of oil and gas comprising many properties at different stages of engineering, development, and production. The proposed acquisition is a large one for Apache and poses several important financing and valuation problems. This case focuses on evaluation and execution of a creative financing structure that allows the buyer and seller to reallocate oil price risk.

Keywords: Business Subsidiaries; Mergers and Acquisitions; Risk Management; Financing and Loans; Mining Industry; Energy Industry;

Citation:

Luehrman, Timothy A., Peter Tufano, and Barbara Wall. "MW Petroleum Corporation (B)." Harvard Business School Case 295-045, February 1995. (Revised April 1996.)