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Introduction to Petroleum Economics

PTTC Rockies

Wednesday, November 8, 2017 from 8:00 AM to 5:00 PM (MST)

Introduction to Petroleum Economics

Ticket Information

Ticket Type Sales End Price Fee Quantity
Standard Nov 8, 2017 $250.00 $7.24
Unemployed Professional (Sponsored by RMS-AAPG Foundation) Nov 8, 2017 $125.00 $4.12

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Event Details

The fee of  $250 includes lunch, class notes, and PDH certificate. The Instructor wiill be  Dr. Larry G. Chorn

Course Content

The course begins with an overview of a hypothetical multi-national oil and gas company with existing production assets, development investment opportunities and exploration projects. Concepts of cash flow, debt service, capital and expense budgets and return to shareholders are revealed. In the second portion of the course, the nuts and bolts of cash flow estimation, time value of money, cost of capital are discussed. The attendees will have an exercise to estimate cash flow, NPV and IRR from a production profile. In the third portion of the course, the attendees will be introduced to decision analysis and capital budgeting by returning to the hypothetical multi-national's portfolio with a closing exercise to develop an 'un-risked' capital budget.

Topics Covered

  • What does an E&P company do?  

    Discussion of hypothetical multi-national E&P company’s business activities and performance metrics. How a Corporate Planning Group identifies, manages and supports management’s decisions regarding resource allocations to projects.      

  • Drilling down into the economics   

    Cash flow, time value of money, net present value, IRR and cost of capital issues      

  • Project Economics

    Using a production profile, price deck and economics to evaluate the economic quality of an investment opportunity. A simple example of decision analysis is introduced at the conclusion of this section.      

  • Exercise and Review

    Calculating a cash flow profile, determining NPV and IRR.      

  • Identifying Risk

    Few projects go as expected because of uncertainties. In this section we spend time identifying what can happen, if it can be mitigated and how we can quantify uncertain outcomes. We also look at how price risk is managed.      

  • A Portfolio of Projects

    We return to the hypothetical multi-national to consider how to allocate three years of capital to meet the corporate goals over the next 10 years.      

  • Team Exercise

    Attendees are divided into 2,3 or 4-person teams, given a budget, a subset of projects to choose from and competing corporate goals. Two teams will have each goal. At the end of the period each time will report out its selections and we’ll see how the corporation performs with each selection set.      

  • Adding in Risk

    We look at the addition of risk to the total portfolio and just how difficult the role management has in making the final decision to invest to achieve shareholder goals and grow the company.      

Have questions about Introduction to Petroleum Economics? Contact PTTC Rockies

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When & Where

Denver Place Conference Room
999 18th Street
Denver, CO 80202

Wednesday, November 8, 2017 from 8:00 AM to 5:00 PM (MST)

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