Financial Modelling and
Petroleum Project Economics

This 10-day Financial Modelling and Petroleum Project Economics training course is designed to provide participants with an integrated and practical understanding of financial analysis tools and techniques for the oil and gas industry. The focus of the training is building proforma analysis, learning different methods of financial analysis and forecasting, and applying different risk analysis tools to investments or projects.

The training course format is based on a careful balance of formal lecturers by leading experts and cases, which illustrates the applications of the different techniques using Excel. The training course will be valuable to those working in the upstream to downstream and provide them with sufficient knowledge of modern financial analysis and forecasting.

Highlights of this GLOMACS Financial Modelling and Petroleum Project Economics training course include: 

• Use of Excel from basics to the most advanced level
• Real world approach to the discipline
• Numerous examples based around the oil and gas industry
• Dual approach that not only develops modelling skills but also financial management skills

The seminar is split into two modules:

MODULE I - Financial Modelling in the Oil & Gas Industry

MODULE II - Petroleum Project Economics &
Risk Analysis

Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Module 1 and 2 back-to-back as a two-week training course.

This Financial Modelling and Petroleum Project Economics training course provides delegates with the tools required to find better answers to questions such as:

• How to improve the quality of the quantitative analysis of my corporate presentations
• How to model and advise on hedging price changes in the oil and gas industry
• How to model investment appraisal techniques and utilise decision trees to model the option to abandon
• How to analysis the company and highlights areas that need improvement

Each of the sessions will involve formal lectures, demonstration of modelling techniques and the opportunity for practical application. Screen recordings of important techniques and examples will be made available to delegates to assist in the practical applications and to facilitate application of the techniques used when they approach to the workplace

By sending delegates on this Financial Modelling and Petroleum Project Economics training course, your organisation will benefit by:

• Providing your staff with the opportunities to develop high level financial management techniques appropriate to the Oil and Gas industry
• Updating their quantitative techniques
• Enabling them to make better informed decisions
• Transforming their Excel skills so that they leave with advanced knowledge of Excel for financial modelling
• Ability to understand area that requires improvements within the organisations

By attending this GLOMACS Financial Modelling and Petroleum Project Economics training course, you will:

• Have advanced ability in financial modelling using Excel
• Have a better skills set when contributing to corporate decisions
• The ability to question important decisions formed using financial modelling
• A thorough analysis of the company performance using modern techniques

This Financial Modelling and Petroleum Project Economics training course is suitable to a wide range of professionals but will greatly benefit:

• Oil & Gas Field Engineers
• Oil & Gas Managers
• Oil & Gas Auditors
• Financial Analysts
• Supervisors
• Decision-makers and Financial Modelers in the up-stream and down-stream Oil and Gas industry
• High level Managers integral to the decision making process who wish to develop their financial modelling skills
• Project manager who wishes to expand their knowledge of financial modelling and petroleum project economics

Module I: Financial Modelling in the Oil & Gas Industry

DAY 1

Introduction to the Excel Environment with Oil and Gas  

• A Quick-start Tutorial for Excel
• Describing Data Sets Using Statistics
• Representing Data sets Graphically
• Understanding the Concept of Normal Distribution and practical application
• Trend Analysis Using Excel
• Time Series Analysis

DAY 2 

Statistical Analysis (Applied to the Oil and Gas Industry) Using Excel 

• Use of Excel Functions for Statistical Analysis
• Descriptive Statistics and their applications:
  • Mean
  • Median
  • Standard Deviation
  • Skewness
  • Kurtosis
• Use of Scatter Diagrams, Frequency and Histogram Distribution
• Regression Techniques to Calculate the Cost of Equity Financing
• Analysis of Equity Returns of Oil and Gas Industry and Companies

DAY 3

Oil Product Spreads  

• Examining the Relationship between Energy Products
• Differences between Data Sets and their importance.
• Correlation Analysis
• Confidence Intervals
• Application of Analysis of Variance (ANOVA)

DAY 4

Investment Appraisal Using Excel  

• Investment Appraisal using NPV, IRR, and Payback as Applied to the Oil and Gas Industry
• Use of Excel Functions for Investment Appraisal: IRR, PV and NPV
• Modified Internal Rate of Return (MIRR)
• Use of Scenario Analysis and Stress Testing
• Predicting Financial Distress

DAY 5

Financial Analysis in the Up and Down Stream Oil and Gas Industry 

• Introduction to Financial Statements
• Ratio Analysis Applied to the Oil and Gas Industry
• Ratios as a System – Pyramids of Ratios
• Financial Modelling
• Cash Flow Forecasts Using Excel

Module II: Petroleum Project Economics & Risk Analysis

DAY 6

Cashflow Analysis

• Familiarization with Economic terms
• Setting up Cashflow Calculation
• Depreciation Methods
• Loss Carry Forwards
• Inflation
• Nominal & Real Cashflow
• Sunk Costs
• Project Financing

DAY 7

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

DAY 8

Risks and Uncertainties

• Risk & Uncertainty
• Expected Value Concept
• Decision Tree Analysis
• Farm-out Decision
• Probability Analysis
• Sensitivity Analysis
• Probability Distribution
• Monte Carlo Simulation

DAY 9

Setting up Spreadsheet Calculation

• Introduction to Spreadsheet Calculation
• Simple Cashflow using Excel
• NPV Calculations
• Application of Economic Indicators
• Class Discussion

DAY 10

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

In Association With

Oxford Management Centre

A GLOMACS - Oxford Management Centre collaboration aimed at providing the best training services and benefits to our valued clients.

PetroKnowledge

Our collaboration with Petroknowledge aims to provide the best training services and benefits for our valued clients

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All rights reserved. Any unauthorized copying, distribution, use, dissemination, downloading, storing (in any medium), transmission, reproduction or reliance in whole or any part of this course outline is prohibited and will constitute an infringement of copyright.

P.O. Box 74653, Dubai, United Arab Emirates
Tel : +971 - 04 - 425 0700, Fax : +971 (04) 425 0701, Email : info@glomacs.com