N814 Petroleum Economics and Decision Analysis

Course Facts

Course Code:
N814
Duration:
2 days
Type:
Classroom
CEU:
2.4 Continuing Education Units
PDH:
24 Professional Development Hours
Certificate:
Certificate Issued Upon Completion

Summary

This course will focus on the economic analysis of oil and gas projects with particular emphasis on how to deal with uncertainty and risk. Probabilistic Reserves and Resource estimation methodology will be explained and volumetric aggregation explained. Participants will be introduced to basic probability theory and the impact of independence vs. dependence explained. This probability theory will be use to introduce probability tree valuation and decision analysis. During this course participants will also learn about the relationship between Reserves and Resources and the role economic analysis plays in determining net bookable volumes. 

Duration and Training Method

A two-day classroom course. The course uses a combination of lectures and practical exercises to ensure participants learn and develop an understanding of the concepts covered.

Participants will learn to:

  1. Understand the basics principles of petroleum economic analysis such as the time value of money, discounting and other project cash flow measures.
  2. Know what input data and assumptions are needed to undertake an economic analysis.
  3. Appreciate the link between hydrocarbon volumes and economic value.
  4. Demonstrate an understanding of petroleum fiscal systems and how these link to project net cash flows.
  5. Understand the valuation process for Reserves and Resources.
  6. Demonstrate an awareness of how this analysis can be used for investment decision purposes.
  • Introduction to project valuation and drivers of project revenue
  • Valuation process and valuation inputs
  • Fundamentals of Economic valuation
  • General framework of hydrocarbon fiscal systems
  • Details of Tax & Royalty vs. Production Sharing
  • Valuation of Reserves (unrisked), sensitivity analysis and evaluation of risk and
  • Valuation of Resources (risked)
  • Project cash flow analysis (calculation of future cash flows, cash flow metrics), incremental economics and sensitivity analysis
  • Sources of finance
  • Risk mitigation and management
  • Portfolio valuation

Who should attend

This course is designed for staff with a technical background who wish to gain a basic understanding of probability tree analysis and its use in commercial and economic decision making within an upstream exploration and production setting.

Prerequisites and linking courses

There are no prerequisites courses, however participants should have a very good to advanced knowledge of excel and numerical analyses.

Click on a name to learn more about the instructor

Ed Jankowski

An excellent introductory course with useful exercises