question archive The Case: Hashim and Pedro are two friends who met each other at SAIT when they enrolled into the Petroleum Engineering Diploma program three years ago
The Case: Hashim and Pedro are two friends who met each other at SAIT when they enrolled into the Petroleum Engineering Diploma program three years ago
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The Case:
Hashim and Pedro are two friends who met each other at SAIT when they enrolled into the Petroleum Engineering Diploma program three years ago. Both of them have experience in the Energy industry. Hashim had worked for an international major oil and gas company in the Middle East as a drilling engineer for several years. Pedro is a geologist and had worked for the state-owned Oil and Gas Exploration and Production Company of Venezuela.
Both of them immigrated to Calgary about four years ago and got connected into the Calgary industry through Immigrant Services Calgary. They are working part-time as contractors in the North American Shale Oil drilling industry. Hashim has extensive knowledge in drilling oil wells. He came up with an idea of a drill head technology that would collect real-time seismic data and transmit that data instantly to the experts on the site, who would then decode that data and direct the drilling trajectories accordingly. This directional drilling technology would help save both time and money. Hashim shared his idea with Pedro, who is an expert in analyzing seismic data and reservoir properties. After several hours of discussion, they decided to take this idea to the next level.
The two friends met with their lawyer and incorporated a private company, Alberta Drill Corp Ltd. The Initial share structure of the company consists of 100 shares - 50 shares for Hashim and 50 shares for Pedro. They each invested $5,000 of their own savings, this was the initial cash contribution for Alberta Drill Corp.
With the help of a $25,000 Government grant obtained by SAIT's - ARIS research program, they conducted some proof of concept studies. The results of those studies were very encouraging. They now want to take this technology from proof of concept to commercialization. Based on their initial findings, this technology would be a good fit for tight oil formation in the Bakken area in North Dakota. They have already talked to a couple of Oil and Gas companies that are operating in that area, and agreed to test this technology in the field.
Hashim and Pedro have designed a detailed plan for a pilot project that would cost them approximately $300,000. They are now looking for third party investors (Minority shareholders) who are interested in financing their project in return for an equity interest (or ownership) in their business. However, they have little or no business experience let alone securing funding for their business venture.
They have approached one of the business instructors at SAIT looking for advice on business valuation basics and how to raise the first $300,000.00 tranche of private capital.
The Assignment:
Assuming the initial financing and technology pilot project is successful, a second round of financing would be required of 5mm CAD at some point to build tools and move the business forward. What other organizations in Calgary and Alberta may be of assistance in supporting the business moving forward. List the organization and the services which may be helpful and why.
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Answer:
Alberta Export Expansion Program
The program and services provider are;
- advice and coaching
- financing and training
- information about market expansion and grant funding
The Alberta Export Expansion Program provides funding support to Alberta small and medium-sized enterprises (SMEs), municipalities, industry associations, Indigenous communities and economic development organizations promoting Alberta exports through outbound international business travel or bringing international buyers to Alberta.
Canada-Alberta Job Grant
The Canada-Alberta Job Grant is an employer-driven training program where employers and government share the cost of training new and existing employees to increase their knowledge and skills and meet the needs of Alberta's changing economy.
Film and Television Tax Credit
The Film and Television Tax Credit offers a refundable Alberta tax credit certificate on eligible Alberta production and labour costs to corporations that produce films, television series and other eligible screen-based productions in the province.
Self-Employment Training program
The Self-Employment Training program supports unemployed and marginally employed individuals who have a viable business idea and require additional training to become self-employed.
Regional Economic Development Services
Regional Economic Development Services (REDS) specialists have local knowledge of the economic opportunities and challenges facing Alberta's regions.
Alberta Purchasing Connection
Each year we purchase goods and services to operate from businesses like yours. The Alberta Purchasing Connection (APC) is a convenient online tool for the tendering of public sector opportunities for goods, services and construction. Alberta public sector purchasers use the APC to advertise procurement opportunities, while vendors use it to seek opportunities to sell their products or services.
Temporary foreign workers
Programs and resources for Alberta employers to hire, train and retain temporary foreign workers.
Indigenous supports
Programs and services for Indigenous (Métis and First Nations) entrepreneurs. Find a listing of contact information, resources and financing programs available for Indigenous business development.
