Could you answer the following three questions for your next project? What will it cost? What is it worth? Will it earn sufficient profit? Before undertaking any project, these questions should be answered. This course will provide the fundamentals necessary to enable you to do so. Budgeting and financing, accounting, and contractual arrangements, which also significantly impact the economic viability of a project, are covered. Participants practice cash flow techniques for economic evaluations and investigate frequently encountered situations. Participants are invited to submit their own economic problems (in advance), if appropriate.
Managers, engineers, explorationists, field accounting supervisors and other personnel who need to develop or improve their skill and understanding of basic economic analysis and profitability of petroleum exploration and production.
You will learn
- How to evaluate the economic viability of a project
- Cash flow techniques applicable in economic evaluations
- Models to weigh risk and uncertainty
- Techniques to determine expected value
- The effect finance, budgeting, and contractual agreements have on a project
- The basic principles of accounting.
- Forecasting oil production
- Defining: reserves, operating expenses, capital expenditures, inflation, factors effecting oil and gas prices
- Cash flow techniques
- Economic criteria: interest, hurdle rate, time value of money, selection, ranking criteria
- Risk, uncertainty: types of risk, mathematical techniques, probabilistic models, uncertainty in economic analysis
- Financing, ownership in the oil and gas industry: business arrangements between operators, between mineral owners
- Accounting versus cash flow: accounting principles and definitions, differences between accounting cash numbers, depreciation, depletion, amortization
- Budgeting: types, processes, selecting of projects for the budget
- Economic analysis of operations
- Computer economics software
- Tips on economic factors in computer spreadsheet analysis
- Ethics in economic analyses,