By the end of this programme, participants will:
- Develop advanced proficiency in financial modeling using Excel.
- Enhance their skill set to effectively contribute to corporate decision-making processes.
- Cultivate the ability to critically evaluate significant decisions derived from financial models.
- Conduct thorough analyses of company performance utilizing contemporary techniques.
- Design and implement effective financial models tailored to the petroleum industry.
- Assess the economic viability and perform risk assessments of petroleum projects.
WEEK 1 – FINANCIAL MODELLING IN THE OIL & GAS
DAY 1 :
Navigating the Excel Environment for Oil and Gas Applications
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- Quick-start tutorial for Excel.
- Descriptive statistics: Summarizing data sets.
- Graphical representation of data: Trends and time series.
- Understanding normal distribution and its applications.
- Conducting trend analysis for upstream and downstream operations.
- Time series analysis techniques.
DAY 2
Statistical Methods for the Oil & Gas Sector in Excel
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- Utilizing Excel functions for statistical analysis.
- Descriptive statistics: Mean, median, standard deviation, skewness, and kurtosis.
- Creating scatter diagrams, frequency distributions, and histograms.
- Applying regression techniques to determine the cost of equity financing.
- Analyzing equity returns within the oil and gas sector.
DAY 3
Analysing Oil Product Spreads
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- Examining relationships between various energy products.
- Identifying and interpreting differences between data sets.
- Performing correlation analysis.
- Establishing confidence intervals.
- Applying Analysis of Variance (ANOVA) techniques.
DAY 4
Advanced Investment Evaluation in Oil & Gas with Excel
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- Evaluating investments using Net Present Value (NPV), Internal Rate of Return (IRR), and payback period specific to the oil and gas industry.
- Employing Excel functions such as IRR, PV, and NPV for investment appraisal.
- Understanding and applying the Modified Internal Rate of Return (MIRR).
- Conducting scenario analysis and stress testing.
- Predicting financial distress indicators.
DAY 5
Financial Performance Analysis in Oil & Gas Operations
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- Introduction to financial statements relevant to the oil and gas sector.
- Performing ratio analysis to assess company performance.
- Understanding and utilizing pyramids of ratios.
- Developing financial models for cash flow forecasting using Excel.
WEEK 2 – PETROLEUM PROJECT ECONOMICS
DAY 6
Comprehensive Cash Flow Analysis
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- Familiarization with key economic terms.
- Setting up detailed cash flow calculations.
- Exploring various depreciation methods.
- Understanding loss carryforwards.
- Accounting for inflation in financial models.
- Distinguishing between nominal and real cash flows.
- Identifying and excluding sunk costs.
- Exploring project financing options.
DAY 7
Key Economic Indicators in Project Evaluation
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- Defining and understanding essential economic indicators.
- Applying the present value concept.
- Calculating discount factors.
- Determining Net Present Value (NPV).
- Assessing Internal Rate of Return (IRR).
- Evaluating the effects of project delays.
- Calculating payback periods.
- Computing profit/investment ratios.
- Analyzing incremental projects.
DAY 8
Managing Risks and Uncertainties
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- Differentiating between risk and uncertainty.
- Applying the expected value concept.
- Utilizing decision tree analysis.
- Making informed farm-out decisions.
- Conducting probability analysis.
- Performing sensitivity analysis.
- Understanding probability distributions.
- Implementing Monte Carlo simulations.
DAY 9
Developing Spreadsheet Calculations
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- Introduction to creating spreadsheet-based calculations.
- Building simple cash flow models using Excel.
- Performing NPV calculations.
- Applying economic indicators in financial models.
- Engaging in class discussions to reinforce learning.
DAY 10
Constructing an Oil Field Development Model
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- Developing an integrated economic model for a typical oil field development.
- Conducting sensitivity analysis for the selected model.
- Introducing the Russell Field Model.
- Providing final remarks and course wrap-up.
