Duration: 2 Weeks
 

Course Objectives:

It was recently estimated that the annual global exploration and production expenditure that the industry requires was in excess of $400 billion. Profit margins, however, are under real pressure from many factors, including the higher costs of developing new reserves, less oil found per foot drilled, rising inflationary costs of doing business, oversupply of crude, crude oil price volatility, competition for oil company investments, competition for acreage/ concessions, competition for funds, and overall business risk and uncertainty. It is therefore crucial to carry out prudent economic evaluation of any capital investments before resources are committed. And for every capital project will typically have cash receipts and cash disbursements into or out of the treasury, respectively. Thus, ‘cash flow is king’ seems to be message for businesses today and in particular with respect to their capital investment decisions. This course therefore aims to provide participants with a thorough understanding of the techniques used by entities engaged in oil and gas exploration and production activities in the estimation of cash flow and associated risks.

Who Should Attend

Finance Managers, Executives in the Oil & Gas Industry, etc.
Prerequisite Courses

Course Overview

- Profit planning
- Basic principles of economics
- Uncertainty and risk
- The concept of interest
- Cash flow diagram
- The time value of money
- Funds flow and compounding/discounting
- Before tax cash flow models
- Product pricing
- Capital expenditures, Operating expenditures
- Types of cost estimates, Variations in actual project costs
- Severance and ad valorem taxes
- Cash flow estimation bias, Cash flow analysis and inflation
- The cost of capital, The cash flow spreadsheet, After tax cash flow model
- Depreciation, Amortization and depletion
- Intangible drilling costs, Spreadsheet application
- Capital budgeting techniques, Investment selection decision making
- Engage with management accounting standards as obtained in the oil and gas industry.