Energy Finance

This course is designed for professionals involved in energy financial and investment decisions, including:

• Financial Officers, Controllers, and Accountants
• Treasurers and Treasury Analysts
• Corporate Planning and Business Development Professionals
• Managers from Non-Financial Areas
• Investors

Day 1: Financial Analysis for Energy Firms

• The Importance of Financial Data Analysis in the Energy Sector
• Key Users and Sources of Financial Information
• Understanding the Purpose of Published Annual Reports and Accounts
• The Structure and Key Components of Annual Reports
• Addressing Agency Problems and Creative Accounting in Energy Firms
• Overview of the Three Core Financial Statements:
  • Income Statement
  • Balance Sheet
  • Statement of Cash Flows

Day 2: Business Performance for Energy Firms

• Importance of Ratio Analysis in Assessing Business Performance
• Performing Ratio Analysis from Various Perspectives:
  • Management’s Viewpoint
  • Owner’s Viewpoint
  • Lender’s Viewpoint
• Pyramids of Ratios: A Systematic Approach to Financial Performance Analysis
• Conducting Distress Analysis for Energy Firms

Day 3: Financing Decisions for Energy Firms

• Overview of Long-Term Sources of Finance:
  • Types of Equity Capital
  • Types of Debt
• Determining the Optimal Capital Structure: Equity vs. Debt
• Calculating Weighted Average Cost of Capital (WACC) and Capital Asset Pricing Model (CAPM)
• Practical Application of WACC and CAPM
• Short-Term Financing Options for Energy Firms

Day 4: Investment Appraisal for Energy Firms

• Investment Appraisal Techniques: NPV, IRR, Payback Period
• Using Excel for Investment Appraisal (IRR, PV, NPV Functions)
• Modified Internal Rate of Return (MIRR)
• Scenario Analysis and Stress Testing in Investment Decision-Making
• Economic Value Added (EVA) for Performance Measurement

Day 5: Understanding Energy Markets

• The Physical Forward and Future Energy Markets
• Exploring the Spot Market for Energy Trading
• Introduction to Energy Derivatives and Pricing Models
• Understanding Energy Options:
  • Call Options
  • Put Options
• Volatility and Its Impact on Energy Market Pricing