Key Facts
CPE Credits: 24
Dates:
Venue: Please refer to the calendar.
Laptop required:
Participants will be provided with a pre-built financial model and will be learning to build their own models on Excel. A laptop computer equipped with Excel is a must.
Fee:
$2995 + GST
Early bird fee: $2745 + GST
Early bird fee applies if registered by indicated deadline.
Application Process: Click here to register.
Course Contact: If you have any questions about this course, email analyst@oakleaftraining.com or give us a call at 403-457-0260
Description
This 3 day course is intended to develop a greater understanding of building comprehensive, strategic Economic and Financial models for investment making decisions with a focus on Oil and Gas related projects. The course is in-depth and hands-on, with participants walking through the creation of a model which includes:
• Model Development and Construction, including inputs sourcing;
• Forecasting/predicting Project Economics, including key financial parameters that are used in ‘GO/NO-GO’ decisions;
• Sensitivity analysis with the incorporation of Scenario Probabilities; and
• Creation of the resulting Pro Forma Financial Statements
The session also incorporates the Financing aspect of the project and the Treasury related concepts including:
• Debt vs. Equity depending on the Life Cycle of the firm;
• Fixed vs. Floating rate Debt, and
• Credit Ratings impact on cost of capital.
• Calculation of the Weighted Average Cost of Capital which is then used as the NPV discount rate in Project Economics
The difference between Accounting and Economic Evaluations are covered in depth, as this is a critical piece of the decision making process within all levels of Oil and Gas entities. This understanding is required from all disciplines including (but not limited to) Geologists, Petroleum Engineers, Exploration and Development Engineers, and Finance Professionals, to highlight the interaction and integration that is required collectively to advance projects that add value for the corporation.
Course Outline
Day 1:
1. Introductions/Overview
2. Economic Modeling 101
• Thinking thru the goal of the model before building and structuring planning
• Strategic Financial Modeling and Financing – Process Road Map
• Construction to enable easy gaming and changes in future
• Economic Model Structures (and how to build them)
• Modeling & Investment Concepts
• Avoiding Garbage In/Garbage Out
• Decision Making
3. Review of the In-Depth Course Model
• VLookups
• SumIf Count
• Decline curves to generate production profiles
• Modeling Play types using model examples
• Not all Subject Matter Expert (SME) input arrives in an analyst friendly format:
• Modeling Play types using model examples:
4. Price Decks and sources of benchmarking materials
• Sources of Pricing materials
• Capital Intensity, Finding and Development (F&D) Costs, Lifting Costs, Energy Intensity, etc.
Day 2:
1. Review of Day 1
2. Review of the In-Depth Course Model
• Real vs Money of the Day and converting from one to the other
• Capex (base, sustaining, maintenance and debottlenecking)
• Opex
• Interest and Interest During Construction
• Royalties
• Dividends
• Asset Retirement Cash Obligations
3. Financing the Project – Building in Equity & Debt Financing Parameters and Scenario Capabilities
• Using industry metrics for projected debt & equity costs and splits (finding a comparative to benchmark against)
• Strategies for securing the funds from debt to equity investors
• Weighted Average Cost of Capital (WACC) determination and elements that go into decisions on how to fund a project
• Examples of valuations variances due to WACC and importance of the financing decision
4. Sensitivities – Typical Tools to Demonstrate Sensitivity Parameters to Corporate Decision Makers
• Toggles
• Expected Monetary Values
• Sensitivity Drivers
• Change Log and important uses
• Waterfall, Angel Cake, & Tornado Charts
5. Group work to determine funding decisions and presentation preparation
Day 3:
1. Review of Day 1 & 2
2. Development of the Pro-Forma Financial Statements
• Review of the differences between Economics and Accounting
• Balance Sheet
• Income Statement
• Cash Flow Statement
• Asset Retirement Obligation (ARO)
• Accretion Provision
• Working Capital Assumptions
• Continue development of the Balance Sheet, Income Statement and Cash Flow Statement
3. Group work to determine funding decisions and presentation preparation
4. Group presentations/large group discussion on funding decisions and
Course wrap-up
Key Learning Objectives
- Understand and apply important terms & concepts
- Economic and Financial models for investment making decisions with a focus on Oil and Gas related projects
Support Materials & Assessment Tools
- Industry-specific group activities
- Case studies & examples
- A certificate of attendance & completion of course. CPE credits on certificate.
Who Should Attend?
In the Oil and Gas industry, participants need to have a sound understanding of the value creation levers in their organization. Economic and Financial Modeling tools and knowledge of financing options are critical to this understanding in an economic environment where investment alternative choices can lead to the success or detriment of the company. This course is intended for a wide range of individuals at different levels of seniority, and will help develop and refine their ability to strategically build tools to ensure they drive accountability within their organization as they strive for a more “balanced scorecard” approach to decision making regarding projects.