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STR 581 Week 3 Team External and Internal Environmental Analysis

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Running head: EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS 1
External and Internal Environmental Analysis
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EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS 2
External and Internal Environmental Analysis
U.S. Energy Corporation (USEC) provides service in the production and development of
natural gas and oil in the United States. Founded in 1966 in Wyoming and focusing on “the
development of natural resource assets acquiring properties on favorable terms, adding value
through the application of its expertise in the natural resources sector, and seeking joint venture
partners to assist in the development of its projects”. USEC is an independent exploration and
production company that has large and diverse prospects through North Dakota and Montana as
well as Texas and the Gulf of Mexico. Team B will be identifying and analyzing the external
environmental factor in the remote, industry, and operating environments in addition to the
internal strengths and weaknesses of USEC.Included will be an assessment of the company’s
resources.
Remote factors
USEC economic remote factors can have a huge effect on the company. The market is
one of the largest factors because this can affect the prices of natural gas and oil. The demand for
natural gas and oil as well as geothermal, and molybdenum are also another factor.USECkeeps
constant trends and motoring on these factors because it can affect the production. The company
so far has maintained the financial part of the business without outsourcing for capital. Other
economic factors are the contracts in developing and mining and the commodity derivative
contracts. The commodity derivative contract, also called “economic hedges” objective is to
reduce the effect of price changes on a portion of future oil production; achieve more predictable
cash flows in an environment of volatile oil and gas prices, and to manage exposure to
commodity price risk. The use of these derivative instruments limits the downside risk of adverse
price movements. The commodity derivative prices can effect the changes in the market

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EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS 3
Demand, pipeline capacity constraints, weather, and the economic activities, and other
factors.
Social Factors
The USEC has built a strong culture that has made it possible for the company “to create
opportunities which we can then convert into positive return for shareholders”. The company
does not deal directly with the consumer but the company does have stockholders and
intermediates bonded by contracts to sell the company’s products. The company as of 2011 has
employed 19 full-time well trained professionals dedicated in following the company’s code of
ethics. USECis a company with an excellent cultural environment, and values. The company has
very low employee turnover with exceptional work ethics.
Political Factors
USEC is affected by political factors.As Pearce and Robison, 2011 states political
factors define the legal and regulatory parameters within which firms must operate”. USEC is
obligated to follow the rules and regulation of local, state and federal law requirements. Other
laws that apply are NEPA, Federal Water Pollution Control Act of 1972 and the Clean Air
Act.The company is follows the tax laws for assets and liabilities, security laws for real estate,
and environmental laws for quality and pollution laws.
Technological and ecological factor
The technological factor involves the technological changes. USEC has adopted all
technological changes, including the purchase of new equipment and improving machinery to
improve the drilling and the production. The ecological factors are air pollution, land pollution,
and water pollution. These factors are extremely important because they can affect the living
conditions natural life. The company constructs fully functional water pipelines on sites that

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