Question :

How can i answer this assignment - if possible provide steps to solve the case

1.Using the data from the case "ExxonMobil and Shale Oil",- file attached

A-Quantify the cost disadvantage of ExxonMobil vis--vis its industry competitors.

B-Decompose the total cost disadvantage into their sub-components [Attach a table showing your calculations of relative costs]

2.Outline a strategy for Amy to deploy her $500 million capital budget

Case:

ExxonMobil and Shale Oil Amy Curry was the business unit head of ExxonMobil's shale oil division. She started out as an oil services engineer and moved through a variety of roles in Schlumberger, Halliburton, and EOG. She was recruited by ExxonMobil in 2012 to head up the shale oil division. She was promised that the company was looking to grow and expand aggressively in the shale space. Her experience in growing the shale business at EOG (an industry leader in shale oil) was an important factor in her hiring. In 2016, after four years at ExxonMobil, Amy was frustrated with her lack of progress. She received very little budgetary support and experienced all the company talk about the increased thrust on shale oil to be just lip service. The division heads of conventional oil exploration (North America, Europe, and Africa/Middle East) were old timers and wielded significant power over budgets. As a relative newcomer, she had very little influence in budgetary allocation decisions. She was preparing to meet with her boss the Director of oil exploration for her upcoming performance review. She had decided that she would announce her resignation effective January 2017. Her meeting with her boss turned out to be a surprise. He showed her a draft strategy document where ExxonMobil had committed to growing its shale business from less than 150K barrels per day in 2016 to over 400K barrels by 2025. In aggregate terms it still dwarfed the conventional oil portfolio which accounted for over 3.8 million barrels per day. However, the conventional oil business was forecast to grow only in single digits. Her boss asked her to come up with a business plan to translate the strategy into action. She went back to her office and dusted off the shale oil market analysis report that she had commissioned from an MBA inter, Kim Loeb, she had hired in summer 2015. Kim had done a benchmarking study of seven major shale oil players in four major oil producing states in the United States (Texas, New Mexico, North Dakota, and Montana) and had concluded that ExxonMobil was among the least efficient players in 2016. She began reading Kim's report