Oil & Gas Company Valuation

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Overview

During the course, participants will:

  • Discuss the background industry economics and fiscal structures.
  • Learn how to model individual oil and gas assets, and how asset models consolidate into corporate accounts.
  • Understand the accounting issues that are specific to the industry relating to reserves, exploration, treatment of inventory and proportionate consolidation of joint ventures.
  • Understand the accounting treatment of hedging activities and the interplay between use of hedging and the company’s cost of capital.
  • Learn techniques for building political risk into the cost of capital.
  • Apply oil and gas industry performance and valuation metrics to screen a universe of companies.
  • Learn how to adapt a standard going concern DCF routine to the valuation of exploration and production or integrated oil companies.
  • Discuss the drivers to and the techniques for assessing the potential success of industry consolidation and M&A activity.

Who should attend

The course will be of value to professionals in the following areas:

  • Energy investment bankers.
  • Oil and gas company corporate planners and strategists.
  • Oil and gas equity analysts.
  • Investors.
  • Oil and gas M & A accountants and lawyers. 
  • Credit analysts

Prerequisites

A basic understanding of Excel.

Methodology

Issues are introduced and discussed using slides and company information – reports and accounts, Bloomberg data and consensus forecasts – and then for each topic Excel spreadsheets are built and used to analyse the relevant problem. Simple models are used to illustrate the underlying points, but the larger case studies are based on real companies and the more substantial models used should form a solid basis for participants to apply to real investment decisions after the course.

Course Outline

Basic financial accounting information provides a very poor view of performance in the oil and gas sector, because of the timing differences between value addition through discoveries and the resulting uplift to profitability. This presents challenges both when conducting comparative and intrinsic valuations of companies.

The course will explain application of upstream performance measurement and adjusted return on capital analysis to provide delegates with the ability to detect underlying value addition and to reflect it in their valuations.

The course provides the industry knowledge to enable participants to produce and interpret useable models of assets and companies in the oil and gas sector. It shows how to model the often complex tax regimes, under which as much as 80 percent of the value of assets may accrue to the host government, rather than the private contractor. And it explains the techniques required to value commercial reserves, uncommercial reserves and exploration opportunities.

Oil and gas corporate valuations, whether produced for investment purposes or for acquisition targets, may take the form of liquidation models or of going concern models. Participants will thoroughly review both approaches, and their strengths and weaknesses. Throughout the course, techniques such as discounted cash flow, probability trees and real options analysis are explained and applied to case studies from the oil and gas industry.

Related Courses

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Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

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Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.

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Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product