Course Description

In business, whatever your specialism, you will benefit from a keen sense of commercial awareness.

 This five-day programme has been designed specifically for non-finance specialists in the oil & gas exploration & production (E&P) industry who need to understand the financial implications of the work they do.

·         Understand how your activities and decisions are reflected in your company’s reporting to shareholders and other stakeholders

·         Find out what happens to financial and economic data that is provided by you and your departmental colleagues

·         Raise your level of confidence in working with financial information and interactions with Commercial colleagues

·         Prepare yourself for increased responsibility and a more strategic role in the management of your company

Course Objective

This programme will provide you with a sound foundation in the financial aspects of oil & gas exploration & production. It will have immediate and practical application back at your workplace since all activities have financial implications for the assets, departments and ultimately the company for which you conduct your specialist activities.

On completion of this programme you will be able to:

·         appreciate the financial impact of your day-to-day decisions and actions

·         work more confidently and effectively with colleagues on financial matters

·         improve the quality of information you receive from and provide to Finance

·         increase the success rate of requests for authorisation of expenditure and make more effective use of funds allocated

·         use departmental budgets and monthly management reports to help you exercise financial control of your area of operations

·         understand the financial information disclosed in your company’s annual report and accounts

Learning throughout the programme will be reinforced by case studies, worked examples, and illustrative extracts from oil and gas company annual reports.

 

Who Should attend?

This programme will benefit all who work within oil and gas companies and need a better understanding of accounting and finance in the industry. It is especially relevant to those who have some financial responsibility within their area of activity and those whose career development involves progression to supervisory or management positions.

 The programme is specifically intended for those who have had little or no previous exposure to company finance and accounting.

Suggested attendees include those from technical disciplines such as Petroleum and Reservoir Engineering, Drilling, Facilities Design and Construction, Maintenance and Production; and those from support functions such as Business Planning and Development, Economics, Executive and Administrative Assistance, Human Resources, Information Systems, Legal Services, Logistics, Procurement and Supplies.

 The course is also suitable for Government Negotiators, Regulators and Petroleum Industry Consultants.

Course Outline

 

DAY 1

 - The E&P Business and Project Economics

The Business Environment

·         Business objectives

·         Stakeholders

·         Corporate governance

The E&P Business

·         Risk and reward

·         Commercial arrangements

·         The field life cycle

Project Economics

·         Project cash flows

·         The time value of money

·         Discounting and the cost of capital

·         Project economic models

·         Decision criteria

DAY 2

 - Accounting, Exploration and Development Costs

The Accounting System

·         Capturing and recording data

·         Cash and accruals

·         The balance sheet

·         The income statement and profit measurement

·         Accounting principles and standards

Capital and Operating Expenditure

·         Matching costs and benefits

·         Assets and expenses

Exploration and Appraisal Costs

·         Full cost and successful efforts

·         Intangible assets

Development Costs

·         Commitments

·         Tangible assets

DAY 3

 - Reserves, Production and Cost of Sales

Reserves of Oil & Gas

·         Classification of reserves

·         Reserve quantity disclosures

Production Costs

·         Lifting costs

·         Maintenance costs

·         Royalties

Depreciation, Depletion and Amortisation (DD&A)

·         Unit of Production (UOP) method

·         Changes in costs and reserves

Ceiling or Impairment Tests

·         Test requirement and process

·         Accounting for test results

Decommissioning, Removal and Restoration

·         Obligations to remove and restore

·         Reporting of decommissioning liabilities and costs

 

DAY 4

 - Risk and Cost Sharing Arrangements

Joint Ventures

·         Cash calls

·         Billing statements

·         Entitlements and liftings

Transfers of interests or risks

·         Farm outs

·         Carried interests

Production sharing contracts

·         Cash flow implications

·         Reserve implications

Long-term gas contracts

·         Pricing mechanisms

·         Take or pay

DAY 5

- Financial Analysis, Budgets and Management Reports

Analysis of Financial Statements

·         Profitability, liquidity and solvency

·         Investment measures

Budgets

·         Authorisation of expenditure

·         The budget process

Management reports

·         Responsibility reporting

·         Analysis of variances