Fundamentals of Finance, Accounting & Project Investment Analysis in Oil & Gas

This 3-day separately book-able course is not designed to skill Oil & Gas engineers to be accountants, but
to give participants the confidence and ability to communicate with accountants and finance managers and
to improve their own financial decision making.
For engineering professionals, a high level of technical expertise is no longer sufficient for superior
management performance. Oil & Gas engineering professionals who wish to succeed in the resources
industry are required to develop skills beyond their core functional knowledge. An understanding of financial
information and management, and an awareness of the economic theory that drives value creation, are an
integral part of the managers required suite of skills.
This course is specifically designed for those with engineering training from the Oil & Gas sector and
requires only basic mathematical ability as a pre-requisite. The course is presented in a manner that
reduces the jargon to basic principles and applies them to numerous real life examples.

Day 1: Financial Reporting & Analysis
Introduction
• Course Overview and Objectives
• The Value Chain
The Financial Statements
• The Balance Sheet
• The Profit & Loss Statement
• The Cash Flow Statement
The Financial Statements cont..
• Integrated Exercise
Accounting Ratios & Key Performance
• What are the key financial ratios
• How to use accounting KPIs to manage the
business
• Comparative analysis and trend analysis
The Corporate Budget
• The master budget
• Top Down and Bottom Up Budgeting
• The budget process
The Budgeting Game

Day 2: Management Reports and
Project Investment Decisions
Cash Versus Profit
• The difference between cash flow and profit
• The concept & implications of accrual
accounting
Managerial Accounting
• Cash Cost and Full Cost Accounting
• Transfer Pricing
Project Investment Analysis
• The time value of money
• Preparing a discounted cash flow statement
Ranking Competing Project Investments
• Net Present Value, Internal Rate of Return,
Payback
• What ranking criteria do I use and when?
DCF Case Study
Risk & Sensitivity Analysis
• Sensitivity analysis
• An introduction to Monte Carlo Analysis
The Budgeting Game: Results
Cash Planning and Control
• Managing Working Capital

Petroleum Fiscal Regimes and Applied Finance for Oil and Gas Industry
Professionals
Decision Analysis
• Decision Trees
• Probability of success
• Expected Monetary Values
• Portfolio approach to exploration decisions
• Valuing Exploration Properties
Petroleum Fiscal Regimes
• The concept of economic rent
• Exploration Prospectivity vs Government
Take
• Royalty/Excise Regimes
• Production Sharing Contracts (PSC)
Cash Flow Analysis of Production Sharing
Contracts (PSC’s)
• Cost Recovery
• First Tranche Petroleum
• Domestic Obligations
• Profit Oil/Gas Splits
Energy Company Valuations
• Interpreting Reserves Statements
• Earnings Multiples, Reserves Multiples
• Share price valuation
Course Review, End of Course