Executive Advanced Master Classes

Content

Objectives

Provides a comprehensive overview of the practices of exploration and development economics and its application in valuing oil and gas assets to aid corporate decisions.

Content

Course outline

Introduction
The oil and gas industry
Risk v reward
Exploration economics
Development economics

Cash flows
Input requirements
Production and investment profiles
E&A costs
DRILLEX, CAPEX, OPEX and ABEX
Tariffs - incoming and outgoing
Oil and gas pricing and forecasting
Net cash flow
Profit and loss
Payback, maximum exposure and
return on investment
Working and carried interests

Exploration economics
Drill or drop
Expected Monetary Value (EMV)

DCF model - development
economics
Discounted cash flow
Time value of money
Inflation
Cost escalation
Interest
Exchange rates
Discount rate
Cost of capital
Real v nominal economics
Evaluation metrics - NPV, IRR, DPIR
etc

Oil and gas contracts
Reserves - SPE & SEC definitions
Concessions
Production sharing contracts/
agreements (PSCs/PSAs)
Joint ventures
Service contract

Risk analysis
Project risks
Cost uncertainty
Probability analysis - Monte Carlo
Sensitivity analysis - spider diagram,
Tornado charts

Workshop
Project development and economic
analysis

Learning outcomes

Participants will construct economic models, to include basic fiscal terms, production and cost profiles and project timing. The resulting models will provide insights of how the various inputs impact value and their relative affect through sensitivities - field case studies will be used throughout the course.

Who should attend?

• Professionals who need to learn about the industry
• Personnel within the industry
• Technical support staff entering the industry
• Technical staff who want to expand their understanding of the industry
• Students considering the industry as a career

For further information, please contact:

Executive Education Department
+4420 7443 8800