Introduction

This comprehensive 5-day course on Oil and Gas Financial Modelling is designed to equip participants with the necessary skills to build, analyze, and interpret complex financial models specific to the oil and gas industry. Through a combination of theoretical knowledge and practical applications, attendees will gain a robust understanding of industry-specific financial dynamics and modeling techniques.

Objectives

• Understand the key financial components unique to the oil and gas industry.
• Develop the ability to construct detailed financial models from scratch.
• Acquire expertise in analyzing financial performance under varying market conditions.
• Learn to integrate risk and sensitivity analysis into financial models.
• Enhance decision-making skills through scenario and strategic planning modeling.

Course Outlines

Day 1: Introduction to Financial Modelling in Oil and Gas

• Overview of the oil and gas industry and financial modeling basics.
• Discussion of key terms and concepts in financial modeling.
• Introduction to the structure and format of financial models.
• Understanding revenue streams and cost structures.
• Hands-on exercise: Building a simple financial model.

Day 2: Building the Financial Model Framework

• Detailed breakdown of upstream, midstream, and downstream operations.
• Constructing balance sheets and income statements for oil and gas projects.
• Developing cash flow statements.
• Linking financial statements within your model.
• Practical exercise: Setting up a comprehensive model framework.

Day 3: Advanced Financial Modelling Techniques

• Methods for incorporating project financing and capital structure.
• Exploration of depreciation, depletion, and amortization (DD&A).
• Modeling production profiles and reserves estimation.
• Applying forecasting techniques for commodity prices.
• Interactive session: Implementing advanced modeling techniques.

Day 4: Risk Analysis and Scenario Planning

• Introduction to risk management in financial models.
• Conducting sensitivity analysis to evaluate model robustness.
• Scenario planning for market volatility and operational uncertainties.
• Developing decision-support tools through scenario analysis.
• Group exercise: Building dynamic models incorporating risk factors.

Day 5: Valuation and Performance Analysis

• Essential valuation techniques for oil and gas projects.
• Understanding market multiples and comparative company analysis.
• Application of discounted cash flow (DCF) analysis.
• Evaluating project and company performance metrics.
• Final project: Creating a detailed valuation model for an oil and gas asset.