Financial Modelling and Petroleum Project Economics

This course is designed for professionals involved in financial planning, economic evaluation, and investment decision-making within the oil and gas sector, including:

• Financial Analysts and Economists in the Energy Sector
• Petroleum Engineers and Project Managers
• Investment and Risk Analysts
• Oil and Gas Consultants
• Energy Industry Executives and Decision-Makers

Module 1: Financial Modelling in the Oil & Gas Industry

Day 1:  Excel Foundations for Oil & Gas Financial Analysis

• Introduction to Excel for Financial Modeling
• Working with Data: Organizing and Analyzing Information
• Statistical Tools for Financial Data Interpretation
• Graphical Representation of Financial and Industry Data
• Normal Distribution and Trend Analysis in Energy Markets
• Introduction to Time Series Analysis for Oil and Gas

Day 2:   Statistical Analysis for Energy Finance

• Utilizing Excel for Statistical Calculations
• Key Statistical Metrics: Mean, Median, Standard Deviation, Skewness, and Kurtosis
• Building and Interpreting Scatter Plots, Frequency Distributions, and Histograms
• Regression Analysis and Cost of Equity Estimation
• Analyzing Industry Equity Returns and Financial Performance

Day 3:   Understanding Oil Product Spreads and Market Analysis

• Examining Relationships Between Energy Commodities
• Comparative Analysis of Different Data Sets and Their Significance
• Correlation Analysis in Oil Market Pricing
• Establishing Confidence Intervals for Financial Projections
• Application of ANOVA in Market Trend Analysis

Day 4: Investment Appraisal Techniques for Oil & Gas

• Evaluating Energy Investments Using NPV, IRR, and Payback Period
• Excel Functions for Investment Appraisal: IRR, PV, and NPV
• Modified Internal Rate of Return (MIRR) for Enhanced Decision-Making
• Conducting Scenario Analysis and Stress Testing
• Techniques for Predicting Financial Distress in the Energy Sector

Day 5:Financial Analysis for Upstream and Downstream Operations

• Introduction to Oil & Gas Financial Statements
• Ratio Analysis and Performance Benchmarking in the Industry
• Understanding Financial Ratios in a Systematic Framework
• Cash Flow Forecasting and Capital Budgeting Using Excel
• Introduction to Financial Modeling Techniques

Module 2: Petroleum Project Economics & Risk Analysis

Day 6:Cash Flow Modeling for Petroleum Projects

• Key Economic Terminologies and Concepts
• Structuring a Cash Flow Model for Oil & Gas Investments
• Depreciation Methods and Their Impact on Project Valuation
• Handling Inflation and Distinguishing Between Nominal & Real Cash Flows
• Sunk Costs and Their Role in Project Decision-Making
• Introduction to Project Financing in the Oil & Gas Sector

Day 7:Economic Indicators for Project Evaluation

• Defining and Applying Key Economic Indicators
• Present Value and Discount Factor Concepts
• Net Present Value (NPV) and Internal Rate of Return (IRR) Calculations
• Assessing the Impact of Project Delays on Profitability
• Payback Period and Profitability Index Metrics
• Evaluating Incremental Projects for Investment Decisions

Day 8:Managing Risks and Uncertainties in Oil & Gas Projects

• Understanding Risk and Uncertainty in Energy Investments
• Applying the Expected Value Concept to Decision-Making
• Decision Tree Analysis for Oil and Gas Ventures
• Evaluating Farm-out Decisions and Joint Venture Scenarios
• Sensitivity Analysis and Probability-Based Financial Modeling
• Monte Carlo Simulation for Risk Forecasting

Day 9:Hands-on Spreadsheet Modeling for Petroleum Economics

• Introduction to Spreadsheet-Based Economic Calculations
• Constructing a Simple Cash Flow Model in Excel
• Applying Economic Indicators to Petroleum Projects
• Conducting Financial Analysis and Sensitivity Testing
• Interactive Group Discussion on Financial Modeling Strategies

Day 10 :Developing an Oil Field Development Economic Model

• Building an Integrated Economic Model for Oil Field Development
• Conducting Sensitivity Analysis for Investment Decisions
• Application of Russell Field Model for Financial Evaluation
• Reviewing Project Economics and Risk Considerations
• Final Discussion and Course Wrap-Up