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Exploration and Production companies often must evaluate their potential E&P investment using proper present value analyses of expected future cash flows. From the projected cash flows and required investments, the annual rate of return and other project economic indicators can be extracted to evaluate the significance of company investment.
- Understand various economic terms used in the oil & gas industry.
- Understand how to develop economic models of various petroleum fiscal regimes.
- Carry out cash flow analysis, different economic analyses for petroleum related project and determine economic indicators.
- Evaluate and quantify risks and uncertainties.
- Make the right investment decision in the presence of risk.
- Carry out a comprehensive economic evaluation study for any petroleum related project including risk analysis and sensitivity study using spreadsheet.
- Contribute to the petroleum project investment within a solid economic system and do a detailed economic evaluation.
- Contribute to the decision making process for any petroleum related project.
Who Should Attend?
- Oil & Gas Field Engineers
- Oil & Gas Managers
- Oil & Gas Auditors
- Oil & Gas Planners
- Financial Analysts
Module (01) Cash Flow Analysis
- Familiarization with Economic terms
- Setting up Cash Flow Calculation
- Depreciation Methods
- Loss Carry Forwards
- Nominal & Real Cash Flow
- Sunk Costs
- Project Financing
Module (02) Economic Indicators
- Economic Indicators Definitions
- Present Value Concept
- Discount Factor
- Net Present Value
- Internal Rate of Return
- Effect of Project Delay
- Payback Period
- Profit/Investment Ratio
- Incremental Projects
Module (03) Risks and Uncertainties
- Risk & Uncertainty
- Expected Value Concept
- Decision Tree Analysis
- Farm-out Decision
- Probability Analysis
- Sensitivity Analysis
- Probability Distribution
- Monte Carlo Simulation
Module (04) Setting up Spreadsheet Calculation
- Introduction to Spreadsheet Calculation
- Simple Cash Flow using Excel
- NPV calculations
- Application of economic indicators
- Class discussion
Module (05) Setting up Oil Field Development Model
- Group activities
- Setting up an Integrated Economic Model of a Typical Oil Field Development
- Project Sensitivity Analysis for the selected model
- Introduction to Russell field model
- Final remarks