EME 460
Geo-Resources Evaluation and Investment Analysis

Welcome to EME 460!


Welcome to EME 460: Geo-resources Evaluation and Investment Analysis! This course is primarily about energy and mineral project evaluation and investment decisions. Your experience within this course will be challenging and productive, which can be very helpful to prepare for the future career in the natural resource and business industries. I strongly encourage you to carefully read the course syllabus where you find details regarding the course objectives, materials, quizzes, grading policy, schedule, and a short description of myself, your lecturer.

Who would not want to be able to assess the value of natural resources, after all! The International Energy Agency released a new report stating that the US will become the largest natural gas and oil producer by 2015 and 2017, respectively. The increasing production of oil and gas in North America is due to the recent shale gas/oil boom. The US is highly possible to be energy self-sufficient in the near future. Then there will be increasingly incentive to develop accurate and reliable tools to evaluate geo-resources. You can view the May 2013 press release.

Please watch the following video, IEA's World Energy Outlook 2014 (1:20:32).

With this short video, you will have a quick glimpse at the natural resource industry: supply and demand, how big is the natural resource industry, import/export issues related to natural resources, cost of extraction, the importance of technology innovation (fracking), policy and regulation, prices, environmental impact, society dependence on natural resources, etc. Tools of evaluation that will be covered include compound interest calculation, rate of return analysis, escalated and constant dollars, uncertainty/risk analysis and tax issues. All these aspects enter into geo-resource evaluation and investment decision making, so welcome on board and enjoy the journey we will be taking together.

Another topic I am particularly interested in is the uncertainty embedded in geo-resource projects and the new evaluation method such as real option approach. We will cover this advanced evaluation technique in the second half of the course.

The study of resource evaluation and investment decision making is part art and part science. As such, you will see that the learning comes with reading the textbook and completing the different class activities. You will learn the most from each other and most probably will end up working together in the industry after your graduate. So, take advantage of this opportunity to build long-lasting professional relationships!