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Oil & Gas Economics
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Oil & Gas Economics

2-Day Training Course: A Practical Guide to Petroleum Project Valuation & Analysis. This quality training course will help you to create a decision making framework for analysing, interpreting & evaluating the vast economic, financial & risk parameters of oil & gas projects.

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overview

Key Learning Objectives

  • Identify the role of project economics in the petroleum industry
  • Learn the language of project commercial decision making
  • Discover cash flow and profit analysis techniques
  • Perform discounted cash-flow economic evaluations
  • Examine profitability and capital efficiency indicators including:
    – Net Present Value (NPV) and Internal Rate of Return (IRR) analysis
    – Finding, lifting and development costs
    – Profitability Index, payback time and maximum exposure
  • Explain screening and ranking techniques
  • Discover probability, expected monetary value and value of information
  • Appreciate uncertainty through risk and sensitivity analysis
  • Explore the differences between additional vs. accelerated reserves
  • Understand the different petroleum fiscal environments

About the Course

Financial considerations for projects and investments are an ever increasing concern. This is especially true as petroleum projects become more complex and costly.

Successful companies work using a decision making framework which includes a strict project progression (or gating) procedure to allow sound financial decisions to be made based upon a rigorous analysis of risk and uncertainty.

It is therefore critical that all key members of the team understand the financial risks involved in business decision making. This training is an excellent primer for professionals outside the financial field as well as a refresher course across a wide range of financial topics for the finance or accounting professional.

Development of projects using multidisciplinary teams is a necessity. These professionals will learn terms and concepts that are vital in developing the understanding that is required.

The career path to increased responsibilities and corporate advancement must include a clear understanding of business financial considerations and risk analysis.

Laptop based case studies will be included to stimulate discussions and illustrate concepts of the course. Laptops are required

Who Will Benefit

  • Any professional involved in the planning, execution or auditing of upstream oil and gas projects
  • Project decision making contributors, including: petroleum and chemical engineers, geologists, geophysicists, legal and government
  • Finance/accounting staff and commercial personnel desiring a refresher or an opportunity to apply economic and finance tools in project decisions
  • Petroleum engineers and geologists who wish to understand the differences between conventional and CSG projects
  • Potential investors in CSG projects
  • CSG managers who wish to understand the reserve process, reserve bookings and risk in CSG
  • Anyone wishing to establish a basic understanding of CSG and how to optimise reserve bookings

Testimonials

“The instructor has extensive experience and knowledge of a wide range of topics and how economics can be applied”
Production Technologist, Woodside Energy

Terms & Conditions

To read the training course terms and conditions read more here

Course Outline

PETROLEUM ECONOMICS
Cash flow revenues and physical systems

  • Cash flow vs. profits
  • Revenue concepts – cash flow, revenue vs. costs
  • Fiscal systems and petroleum agreements

PROJECT ECONOMICS
Financial parameters

  • Input requirements for an economic analysis
  • Revenues
  • Capital costs
  • Fixed vs. variable operating costs
  • Taxes and royalties
  • Depreciation
  • Inflation

Case study: Setting up a project cashflow

Cash flow analysis

  • The Discounted Cashflow (DCF) technique
  • Net Present Value (NPV) and discount rates
  • Cost of Capital
  • Company financing

Case study: NPV and discount factors

Profitability and project performance indicators

  • Profitability
  • NPV
  • Rate of Return (IRR, RRoR)
  • Payback time and maximum exposure
  • Profitability Index
  • Unit Technical Cost (UTC – finding, development and lifting costs)
  • Breakeven analysis

Case study: Performance indicators

Risk and uncertainty in decision making

  • A logical method for defining uncertainties and risks
  • Technical risks (volumetric and production forecast uncertainty)
  • Project risks (cost estimates and project timings)
  • Economic risks (fiscal system, oil price)
  • Mitigating risks – sensitivity analysis

Case study: Sensitivity analysis

EXPLORATION AND APPRAISAL DECISION MAKING
Probability concepts

  • Probabilistic volumetric estimates
  • Probability of success
  • Expected monetary value
  • Decision Tree Analysis (DTA)

Case study: DTA in the context of field appraisal

MATURE FIELD PROJECTS
Accelerated and increased reserves

  • Accelerated reserves – economics
  • Increased or new reserves – economics
  • Review of performance indicators for ranking mature projects

Case study: Analysis of an acceleration project

On-site & in-house training

Deliver this course how you want, where you want, when you want – and save up to 40%! 8+ employees seeking training on the same topic?

Talk to us about an on-site/in-house & customised solution.

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