• Understand the dynamics of gas market, monetization of shale gas and impact of shale gas on LNG imports
• Maximize the return on investments by good decision making processes based on the commercial viability of projects
• Practice the hands on experience in building your own economic evaluation models and solving case study based examples
•  

At the end of the program, you will be able to :

• Understand the dynamics of gas market, monetization of shale gas and impact of shale gas on LNG imports
• Learn how to reduce exposure and mitigate risks in projects and handling uncertainty
• Clarify concepts such as: time value of money, cash-flow models, capital budgeting, IRR, NPV, income producing investments
• Maximize the return on investments by good decision making processes based on the commercial viability of projects
• Improve your decision process, investment and opportunity analysis
• Practice the hands on experience in building your own economic evaluation models and solving case study based examples

• Planning managers
• Oil & gas engineers
• Project managers
• Analysts
• Commercial managers 6. Economists
• Government officials
• Geologists
• Business advisors
• Asset managers
• E&P managers
• Product managers

This interactive Training will be highly interactive, with opportunities to advance your opinions and ideas and will include:

• Lectures
• Workshop & Work Presentation
• Case Studies and Practical Exercise
• Videos and General Discussions
• pre and post assessments 

Day1: General Industry Overview

• The Nature of Natural Gas
• The Global Market Place
• Estimating Gas Reserves
• Development & Economics of Shale Gas
• Shale Gas Development
• Impact of Shale Gas on LNG Market
• Shale Gas Development Costs & Economics
• Evaluation of New UG Plays
• Problems & Solutions

Day2: Why economic evaluation

• Typical oil & gas company objectives
• Inflation
• Types of inflation
• Consumer price index (CPI) – USA
• Italian consumer price index
• Interest
• Simple and compound interest
• Nominal and effective interest.
• The Time Value of Money
• Risk factors (simple illustration)
• The time value of money
• Interest table
• Future value of present sum
• Present value of future sum
• Future value of ordinary annuity
• Future value of annuity due
• Present value of ordinary annuity
• Conditions of annuity
• Spreadsheet Applications
• Problems & Solutions

Day3: Before-Tax (BTAX) Cash-Flow

• Cash-Flow (CF) defined
• Forecasting cash-flow
• Brainstorm session – identifications
• Basic data requirements
• Forecasting product stream
• Revenue stream components
• Cost elements
• Before-tax net cash-flows
• Natural gas processing
• Typical oil production facilities
• The history of oil price
• Capital (front end) costs
• Breakdown of facilities’ cost
• Economies of scale
• Capital costs during production
• Breakdown of OPEX
• Develop rules of thumb
• Transfer pricing
• Types of cost estimates
• Dependence of cost estimates
• Gross revenue
• Sample before-tax cash-flow
• Schematic of typical cash-flow
• After-Tax (ATAX) Cash-Flow
• After-Tax – additional variables
• Depreciation types
• Straight line depreciation
• Declining balance depreciation
• Declining balance with switch to straight line
• Sum-of-the years digits depreciation
• Depreciable asset lives
• Sample after-tax cash-flow
• Spreadsheet applications
• Problems and Solutions

Day 4: Capital Budgeting Techniques

• Decision yardsticks/profitability indicators
• Payback period
• Discounted payback period
• Net present value calculation
• Misuse of NPV
• Internal rate of return (IRR)
• Limitations of IRR
• Multiple rates of return
• Economic solution for projects with multiple IRR
• Profitability index (PI)
• Unit technical cost (UTC)
• Long-run marginal cost of gas
• Cash-Flow Discounting Frequency
• Funds flow and discounting frequency
• Common cash-flow & discounting frequency
• Spreadsheet functions Discrete probability distributions
• Cost of Capital and Cash-Flow
• Cost of capital relationship
• Defining cash-flows
• Equity cash-flow (ECF)
• Free cash-flow (FCF)
• Capital cash-flow (CCF)
• Combining cash-flow and WACC
• Netback Value & Pricing
• Netback value (NBV)
• Base year and ROR approach
• LRMC approach
• Indexed netback pricing
• Sample gas netback from LNG
• Problems & Solutions

Day 5: International Petroleum Economics

• Global energy consumption
• Why collaboration
• The need for collaboration
• Parties to upstream agreement
• Typical contract terms
• Contractual arrangements
• Fiscal systems
• Concessionary system’s cash-flow
• Production sharing system
• Dynamic terms of contracts
• Main objectives of these contracts
• Investment Selection Decision Making
• Types of investment decisions
• Investment decision-making (screening)
• Investment decision-making
• Revenue producing investments (NPV)
• Revenue producing investments (IRR & PI)
• NPV/IRR conflict
• Incremental investment analysis
• Ranking investments (non-mutually exclusive)
• Ranking investments under budget constraints
• Service producing investments
• Service producing investments (unequal life)
• Lease versus buy decision-flow
• Introduction to Decision Analysis
• Detailed Case Study
• Problems & Solutions

BTS attendance certificate will be issued to all attendees completing minimum of 75% of the total course duration.

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