Accounting Issues in the Oil and Gas Industry: Ebele Kemery

Despite coming under increasing criticism over the past few years, the oil and gas industry has continued to grow not only in size and power but also in influence on its related industries. For example, the shear impact of the oil and gas industry and their specific requirements has resulted in the demand for a whole new set of criteria for accountancy services. This can partly be attributed to the heavy investment into areas such as research and development by the industry which can be hard to track. The general success or failure of a project in these areas can alter how it is reported in order to ensure that the involved expenses can be appropriately capitalised upon.

With this in mind, the oil and gas industry use 2 key forms of accountancy reporting. There is always an accountancy issue when it comes to the various methods of accountancy and financial reporting. These are known as "successful efforts" (SE) and "full cost" (FC). For successful effort reporting methods costs are capitalised for successful efforts where as unsuccessful efforts (also known as dry hole projects) and their resulting associated operating costs are charged against the revenues for that period. In contrast to the successful efforts reporting method where projects are reported separately depending on how positive an outcome they have the full cost reporting method groups all expenses relating to new projects.

Depending on how these expenses are reported will impact upon how a company reports their cash flow and net income. However in an attempt to develop a more cohesive procedure for financial reporting within the oil and gas industry FASB recently stated in the Standard of Financial Accounting Standard that all oil and gas companies are required to use the SE reporting method. However with all these variations in financial reporting and the associated impacts which it can have if done incorrectly have resulted in universities recognising this gap in accountancy skills. By doing this many universities and professional institutes and bodies have developed offshore oil and gas industry financial reporting and accountancy qualifications to reflect the variations in procedure and requirements. For example Robort Gordons, which is based in Aberdeen the European hub for the oil and gas industry, now, offers oil and gas industry, focused degrees such as a Masters in Oil and Gas Accounting. These qualifications aim to combine generic and industry specific modules to respond to the increasing demand for multidiscipline accountants for the industry. By encouraging the development of employees with a combined academic and industry experiential knowledge it is clear that no matter what specialism you work in there will always be that demand for a multidisciplinary approach.

Ebele Kemery is a member of the Global Fixed Income, Currency & Commodities (GFICC) Group. Based in New York, Ebele is the head of Energy Investing within the Commodities team. Prior to this role, she provided institutional client relationship management and tailored risk management solutions in the Investment Bank’s Global Commodities Group.

Ms. Ebele Kemery has proven track record of robust and consistent profitable returns in commodities. And Increased assets under management through strong performance and development of customized solutions that leverage a wide variety of market techniques.

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Trading From A Fund Manager's Point Of View: Ebele Kemery

It is crucial to keep an eye out for other players while trading in the forex market. By examining their roles, you may be able to improve your own trading approach. Other than specialist like Ebele Kemery, who else could better do this?

Banks used to dominate trading, but that all changed when people learned how to trade right from their desktops. The daily movement of currencies across the globe, having a net worth of a trillion dollars, occurs via the banks. Governments and worldwide corporations are transacting these huge figures of money. To advance their long range economic goals these entities trade on the forex market.

Appreciating the big picture is an important lesson that comes from understanding the behavior of banks, governments and global corporations, whose huge money flows in the forex market support a flexible target, creating an inherent range in the price movement. The market responds by trading within these ranges. When the prices near these targets, there will be expected huge resistance. By looking at weekly price charts, the big picture of the range behavior of the currency pairs emerges.

The fund manager is another important factor that you have to take into account. These bodies collect quite some money from investor's around several millions of dollars. To accomplish their total return goals, they organize a trading operation. Fund managers will work for a fee, and search for profits afterwards to be divided with the investors. The common practice in the industry is to share profits along a grid calibrated to performance.

But what can fund managers demonstrate to you about trading? It is imperative for you to find out how they function before delving in that question. Fund managers in trading of forex usually have long range objectives. These people opt for steadiness in performance. They analyze risk and get as much information, all in order to lessen the drawdown of equity.

Fund management companies are valuable to understand because they have access to a great deal of information about the forex market. Ms. Ebele Kemery a Portfolio Manager associated with JPMorgan Investment Management says that Information and management of risk are the most important factors to fund managers who want to attain long range profits. What might the traders have to realize from this?

At a minimum, we can see that risk control is vital. Compared to a trading team from a money managing company, a self-directed trader does not have that much of information at hand. Yet, a self-directed trader can employ a risk control tactic, measuring each trader against its risk target. It is likely and common that individual traders will tolerate greater risks per trade than fund managers would, but having a risk plan is important in itself.

Another difference between individual trading and fund managing is time. The individual trader does not have the time to stay in a drawdown period and recover his position. The fund manager has the staying power to ride the volatility waves to a recovery. This is a crucial gauge that tells you about the fund's performance and at the same time, it is also the greatest benefit from the fund manager's viewpoint.

While the individual trader cannot emulate a fund manager in his ability to contain risk, the individual trader can learn from the components that measure fund performance by applying them to his own trading. By implementing professional performance measures such as average monthly return, maximum drawdown, percent positive months, individual traders will be able to gain insight into their weaknesses.

The fund manager can easily access large amounts of information, use huge capital and set long-term objective's making the trades on another level altogether. The viewpoint of the individual trader is how to make a fast buck within the day or hour. Once you view forex as having long run benefits you start thinking of putting only a part of money in short term trading and use the main part in longer deals. This strategy is like having the best of both worlds, and it seems to be one that will work.
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Buying Foreclosures in the Pre-foreclosure Period - Ebele Kemery

Investing in foreclosed real estate can be profitable. Do you have to wait until the foreclosure auction to buy a residential foreclosure property? No. You can buy a property in pre-foreclosure. The time period between the foreclosure auction and the foreclosure notice is called pre-foreclosure. Purchases in pre-foreclosure are in most ways comparable to a common real estate transaction: You negotiate with the house owner, sign a purchase agreement (contract), and proceed with the deal. The big difference is that instead of the house owner choosing to sell the home on his own, he is forced into selling the property to avoid the foreclosure.

You may find a distressed homeowner in the first stage of foreclosure by looking into public notices. It will list the bank's attorney, and you may contact the lawyer for more information about the property. You shouldn't be surprised if he is friendly but not especially cooperative: He offers legal services and working as a property receiver is only one of these services. He is paid to organize paperwork and execute the foreclosure sale, certainly not to act as a real estate information hotline.

If you are interested in the house, contact the homeowner immediately. Keep in mind that the homeowner is already under a substantial amount of mental pressure. Don't be surprised if he doesn't respond favorably to your request, at least not initially. You will need to be respectful, tactful, and aware of the strain the homeowner is under. They will try desperately to hold onto hope that things may somehow work out.

When the homeowner is relatively receptive to your approach, then you will need to see whether there is sizeable equity in the property. Let's say that the property has a projected market value of $150,000. You have been able to inspect the property, and other than needing a little exterior repair, it is in good enough shape. You estimate you will spend $5,000 getting the property ready to sell. So, you determine that your walk-away price is $125,000, which leaves you enough room to make the sizable profit you want and at the same time covering the cost of repairs and your holding cost (payments you must make, utilities, etc.). If $125,000 is still owed on the mortgage, you probably will not be able to purchase it for less than $125,000. Although sometimes a homeowner may accept less than the owed amount, the chances are slim.

If a legal judgment has already been made, the homeowner must come up with enough money to satisfy the judgment. When the homeowner doesn't have much equity in the house, you are unlikely to be able to pull off a price significantly lower than the property's value. And if you cannot buy under the market value, you will never make enough a profit.

If you manage to get a short sale with the bank on the homeowner's behalf, you can buy the foreclosed property for less than the balance currently owed and the homeowner does not have to compensate the lender for the difference.

Investing in foreclosures takes time and effort but can result in profits
Ebele Kemery is a Commodities Leader, a member of the Global Fixed Income, Currency & Commodities (GFICC) Group.
Ms. Ebele Kemery has a track record of consistently profitable trading efforts, and expanded business through understanding of client needs and developing customized solutions that leverage a wide variety of techniques and market intricacies.
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The Tax Benefits of Natural Gas Investing: Ebele Kemery

Any type of investing has an element of risk. Investing in the exploration of natural gas is no different. Investing in the exploration of natural gas is not like commodity investing. When you are investing in a commodity, such as gas or oil, you trying to buy low and get a return when the price rises. When you invest in the exploration of natural gas, however, you are investing in an opportunity to find natural gas by drilling. Because natural gas is so very much desired and a necessity commodity, there are various tax benefits that go along with investing in natural gas.

When you invest in commodities, you get no tax benefits. If you make money on the investment, you pay a capital gains tax on what you make. This is not the case when you are investing in natural gas exploration. You can write off a dry hole, for example, and any cost that comes from drilling for the gas can be written off in the first year of the investment.

If the project is successful, you can write off the profits over a period of years. This can often include depreciation over the life of the well. Many investors will do a straight line depreciation over a course of seven years. You cannot do this when you are investing in stock, for example, that makes huge gains. There is a significant decrease in the capital gains that you have to claim on your investment.

If the project is unsuccessful and it ends up with a dry well, you can write off as much as 65 percent of the loss. This can actually reduce your tax bracket, saving you money when you prepare your income tax. The 65 percent loss write off is one of the reasons why many investors are eager to participate in the investment of gas or oil exploration as even a loss can end up again when it comes to tax time.

The reason that there are such tax incentives when you are investing in natural gas exploration is that the government wants to encourage these types of investments. While investing in stock that goes up can benefit both you and the company that owns the stock, a profit in the field of natural gas exploration can benefit the entire nation. This is the reason for the significant tax benefits when investing in natural gas exploration.

Even if you lose, you win, when you choose this type of investment. If the investment does pan out and the drilling is successful, you can find that you earn a high return on your initial investment that can often be stretched out to the life time of the well, allowing your tax benefits to continue well into the future.

Ebele Kemery a Portfolio manager and associated with JPMorgan Investment Management. Ms. Kemery is responsible for formulating our view and investment decisions for major energy commodities including, but not limited to: crude oil, gasoline, heating oil and natural gas.

Ms.Ebele Kemery is a Commodities Leader with a track record of consistently profitable trading efforts, and expanded business through understanding of client needs and developing customized solutions that leverage a wide variety of techniques and market intricacies.
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