Course Syllabus
Professor
Zhen Zhu
Adjunct Professor, Natural Gas Finance
Petroleum & Geological Engineering
Areas of Expertise: Natural Gas Market and Energy Finance
Phone: 405-325-2921
Email: zhen.zhu-1@ou.edu
Live Session (Zoom link): https://zoom.us/j/6432826790
Course Description:
This course is the second in a two-course sequence in natural gas finance. The first course covers valuation and investment topics; and this course covers risk management and natural gas trading topics.
The gas risk management course exposes students to basic concepts and practices of risk management in the natural gas industry. Topics include basic structure of the gas physical and financial markets, derivatives, hedging strategies, futures and forward price determination, option pricing theories, value at risk, and market fundamental and technical analyses. The emphasis of the course will be on the application of the basic financial risk management theories to the natural gas industry.
Learning Outcomes:
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- To familiarize students with basics of the natural gas derivatives markets
- To enable students to apply basic hedging strategies to the gas industry
- To enable students to understand risk management principles and policy requirements
- To enable students to conduct fundamental and technical analyses of the gas markets
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Course Materials:
Our main course materials will be the lectures I post each week. Please watch each lecture carefully and take notes. Your understanding of the course material will be evaluated through our problem sets and exams. You cannot succeed in this course without paying close attention to each lecture.
In addition, these books in financial and commodity risk management and trading are needed for the course:
- Fundamentals of Futures and Options Markets by John C. Hull (JH; required)
- A Complete Guide to the Futures Markets by Jack Schwager (JS; recommended)
- A Nontechnical Guide to Trading Natural Gas by Fletcher Sturm (FS; recommended)
Course Grades:
Online discussion/live session participation 10%
Problem Sets 20%
Midterm Exam 35%
Final Exam 35%
The date for the midterm exam is set on Thursday, March 7th, 2019, from 6:30 to 9:00 p.m. The final exam will be from 6:30 to 9:00 p.m. on Thursday, May 2. No make-ups for missed exams. Special requests may be considered on a case-by-case basis.
No make-ups for missed exams. Special requests may be considered on a case-by-case basis.
The final course grade will be determined based on the following table:
≥90% A
≥80% B
≥70% C
≥60% D
Receiving a grade of “D” or less in this course will stop your progression through the Petroleum Engineering curriculum. You will not be allowed to take advanced PE courses until satisfying the requirement of passing with at least a “C.” Be aware that this will add a year to your projected graduation date.
Online Discussion Board (5% of the grades)
Student will receive credit for participating in our online discussion board. There are two ways a student can participate: 1. Start a discussion thread. Student can pick a topic in energy risk management to start the discussion. Student should provide the general background of the activity and provide a description and pose comments and questions regarding the activity. For a more complete start of the thread, this task should not be less than three full paragraphs. 2. Student can comment on any issues in a thread and provide a brief analysis of the issues. The comments/analyses should be informative, relevant, and helpful to others. This task should not be less than two full paragraphs. Each student will receive up to 2% of the total grade on starting a thread and up to 1.5% of the total grade on commenting on issues within a thread. A maximum of 8% can be awarded for online discussion board discussions, which implies a 3% bonus. This board will appear in each unit, so feel free to keep adding on to it as the semester progresses.
The course professor will grade the student online discussion board participation based on the information content, relevance and depth of the issues and analysis.
Problem Sets
Regarding the problem set, students will typically have a week’s time to complete the assignment (due one week after the assignment – exact due date will be specified in PS assignment). Problem set can be turned in to Canvas. Students can either turn in their answers in Word/Excel and/or upload the scanned work on paper. No late assignment will be accepted.
Live Sessions (5% of the grades)
There will be three live sessions during the semester. These sessions are scheduled for Week 4 (February 7), Week 7 (February 28), and Week 14 (April 25). They will take place on Thursdays from 7-8 pm, so please plan accordingly. Students will submit questions before the live sessions via our “Live Session Discussion Board” (you must submit at least one question before each session). The question can be a specific calculation question or a general question. Students who are unable to attend the session can watch the recording (which will be posted in the “Live Session” assignment tab), and compose a brief (1-2 page) written response to our discussion. Your attendance will be part of your participation grade.
Exams
You will take a midterm and final exam. Your exams will be proctored by Remote Proctoring (specific instructions for how to use the software are provided in the exam modules), but note that the service costs $15 per exam ($30 total for our course).
Course Evaluations
The Mewbourne School of Petroleum and Geological Engineering utilizes student ratings as one of the bases for evaluation in the teaching effectiveness of each of its faculty members. The results of these ratings are important data used by the faculty members to improve their own teaching effectiveness, and programs use the data to assess achievement of a set of learning outcomes. The original request for the use of these forms came from students, and it is the students who eventually benefit most from their use. Please take this task seriously, evaluate courses on-line, and respond as honestly and precisely as possible, both to the machine-scored items and to the open-ended questions. We appreciate your feedback.
Late Policy:
Students will typically have a week’s time to complete the assignment (due Thursday midnight one week after the assignment). HW can be turned in to Canvas. No late assignment will be accepted.
No make-ups for missed exams. Special requests may be considered on a case-by-case basis.
UNIVERSITY OF OKLAHOMA
ACADEMIC POLICIES AND STUDENT SUPPORT
Catalog
Please familiarize yourself with the student catalog: http://catalog.ou.edu/courses/courses.htm
Online Library
Students in the MAcc program can use the University of Oklahoma library by visiting:
Academic Misconduct
In addition to the course conduct policies outlined by your professor in the Course Syllabus in the online classroom, please review the Graduate Student Handbook.
It is the responsibility of each student to be familiar with the definitions, policies and procedures concerning academic misconduct. The Student Code is available from the Office of the Vice President for Student Affairs and is contained in the Student’s Guide to Academic Integrity, available at http://integrity.ou.edu/students_guide.html This site also defines misconduct, provides examples of prohibited conduct, and explains the sanctions available for those found guilty of misconduct.
Plagiarism
Plagiarism is the most common form of academic misconduct at OU. There is basically no college-level assignment that can be satisfactorily completed by copying. OU's basic assumption about writing is that all written assignments show the student's own understanding in the student's own words. That means all writing assignments, in class or out, are assumed to be composed entirely of words generated (not simply found) by the student, except where words written by someone else are specifically marked as such with proper citation. Including other people's words in your paper is helpful when you do it honestly and correctly. When you don't, it's plagiarism.
Go to http://integrity.ou.edu/students_guide.html to learn more about the rules for avoiding plagiarism. Test your skills in avoiding plagiarism by taking the library’s plagiarism tutorial, available at https://libraries.ou.edu/content/academic-integrity-tutorial
Reasonable Accommodation for Disabilities
The University of Oklahoma is committed to providing reasonable accommodation for all students with disabilities. Students with disabilities who require accommodations in this course should contact their professor as early in the semester as possible.
Students with disabilities must be registered with the Disability Resource Center prior to receiving accommodations in this course.
If you have a disability and you would like to make a request for reasonable accommodation, please see the Graduate Student Handbook or visit the Disability Resource Center and other disability services at OU at: http://drc.ou.edu/
Adjustments for Pregnancy/Childbirth Related Issues
Should you need modifications or adjustments to your course requirements because of documented pregnancy-related or childbirth-related issues, please contact me as soon as possible to discuss. Generally, modifications will be made where medically necessary and similar in scope to accommodations based on temporary disability. Please see www.ou.edu/content/eoo/faqs/pregnancy-faqs.html for commonly asked questions.
Title IX Resources
For any concerns regarding gender-based discrimination, sexual harassment, sexual misconduct, stalking, or intimate partner violence, the University offers a variety of resources, including advocates on-call 24.7, counseling services, mutual no contact orders, scheduling adjustments and disciplinary sanctions against the perpetrator. Please contact the Sexual Misconduct Office 405-325-2215 (8-5, M-F) or OU Advocates 405-615-0013 (24.7) to learn more or to report an incident.
Religious Holidays
It is the policy of the University to excuse absences of students that result from religious observances and to provide for the rescheduling of examinations and additional required classwork that may fall on religious holidays without penalty. It is the responsibility of the student to make alternate arrangements with the instructor at least one week prior to the actual date of the religious holiday.
Copyright Policy
It is illegal to download, upload, reproduce, or distribute any copyrighted material, in any form and in any fashion, without permission from the copyright holder or his/her authorized agent. The University of Oklahoma expects all members of its community to comply fully with federal copyright laws. If such laws appear to have been violated by any user, the university reserves the right (1) to terminate that user’s access to some or all of the university’s computer systems and information resources and (2) to take additional disciplinary actions as deemed necessary or appropriate. Repeat offenders will be sanctioned and their privileges terminated.
Registration and Withdrawal
If you choose to withdraw from this course, you must complete the appropriate University form and turn the form in before the deadline. If you stop attending the course and doing the course work without doing the required paperwork your grade will be calculated with missed homework and examination grades entered as zero. This could result in receiving a grade of F in the course. Deadlines are shown in the Academic Calendar, which is available from the Office of Admissions and Records or online at http://www.ou.edu/admissions/home/academic_calendar.html
Student Grievances
In addition to any policies outlined related to submitting an informal or formal grievance by your professor in the Course Syllabus in the online classroom, please review the Graduate Student Handbook for more information about the process of submitting a formal grievance.
Course Summary:
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