Petroleum economics and risk analysis : a practical guide to e&p investment decision-making / Mark Cook.

Format:

Book

Author/Creator:

Cook, Mark, author.

Series:

Developments in Petroleum Science Series

Developments in Petroleum Science Series ; v.Volume 71

Language:

English

Subjects (All):

Petroleum industry and trade--Risk assessment.

Petroleum industry and trade.

Petroleum industry and trade--Economic aspects.

Investment analysis.

Physical Description:

1 online resource (368 pages) : illustrations

Edition:

1st ed.

Place of Publication:

Cambridge, Massachusetts : Elsevier, [2021]

Summary:

Petroleum Economics and Risk Analysis: A Practical Guide to E&P Investment Decision-Making, Volume 69, is a practical guide to the economic evaluation, risk evaluation and decision analysis of oil and gas projects through all stages of the asset lifecycle, from exploration to late life opportunities.

Contents:

Front Cover

PETROLEUM ECONOMICS AND RISK ANALYSIS

PETROLEUM ECONOMICS AND RISK ANALYSIS: A Practical Guide to E&amp

P Investment Decision-Making

Copyright

Contents

Acknowledgement

1 - Introduction

1.1 Structure of the book

1.2 Gaining access to E&amp

P opportunity

1.3 Exploration

1.4 Appraisal planning

1.5 Evaluating field development opportunities - project cash flow

1.6 Risk analysis

1.7 Evaluating incremental project opportunities

1.8 Decommissioning

1.9 Portfolio investment

1.10 Abbreviations and units

Reference

2 - Trends in global energy supply and demand

2.1 Supply and demand curves for general commodities

2.2 Historical trends in global energy supply and demand

2.2.1 Immediate impact of Covid-19 on energy demand

2.2.2 Historical oil supply

2.2.3 Historical gas supply

2.2.4 Gas sales agreements and influence on gas sales price

2.3 Forecasts of global energy supply and demand

2.3.1 Overall energy demand forecasts and role for renewables

2.3.2 Oil demand forecasts

2.3.3 Gas demand forecasts

References

3 - Gaining access to E&amp

3.1 Options for accessing E&amp

P investment opportunity

3.2 Strategic choices for investment

3.3 Bidding processes

3.4 Acquisition and disposal

3.5 Merger

3.6 Joint venture and partnership

3.7 Unitisation and equity determination

3.8 Financing the project

3.8.1 Debt seniority ranking

3.8.2 Debt financing

3.8.3 Equity financing

3.8.4 Mezzanine financing

3.8.5 Reserves-based lending

3.8.6 Volumetric production payments

3.8.7 Islamic finance

4 - Exploration

4.1 Introduction

4.2 Risk and uncertainty in exploration

4.2.1 Prospect risking

4.2.2 Volumetric uncertainty

4.2.3 Combining exploration risk and volumetric uncertainty.

4.2.4 The risk-reward balance

4.2.5 Decision tree analysis - an introduction

4.2.6 Expected monetary value in exploration using decision trees

4.2.7 Summarising the opportunity

4.2.8 Formulating the bid - theory and practice

5 - Appraisal planning

5.1 Reservoir appraisal and project assessment in context

5.2 Justifying reservoir appraisal assuming perfect information

5.2.1 Appraising for comfort

5.2.2 Appraising to prove commerciality

5.2.3 Appraising to add hydrocarbon volume

5.2.4 Appraising to avoid sub-optimal expenditure

5.3 Incorporating imperfect information

5.3.1 Bayesian revision of probabilities

5.3.2 Imperfect information from a seismic survey

5.4 Reservoir appraisal planning

5.4.1 Target of appraisal - tornado diagrams

5.4.2 Appraisal tools

5.4.3 Impact of appraisal on project schedule

5.4.4 A medical example of Bayesian revision

6 - Project cash flow

6.1 Cash flow components

6.2 Production profile and sales price - the revenue source

6.2.1 Oil price assumptions

6.2.2 Gas price assumptions

6.3 Capex and opex - the technical costs

6.3.1 Capex estimation

6.3.2 Opex estimation

6.3.3 Benchmarks and industry performance on capital costs

6.4 Fiscal systems - the host government take

6.4.1 Classes and influence of fiscal systems

6.4.2 Tax and royalty (concessionary) systems

6.4.3 Production sharing contracts/agreements

6.4.4 Service contracts

6.4.4.1 Pure service contracts

6.4.4.2 Risk service contracts

6.4.5 Association contracts

6.4.6 Joint ventures

6.4.7 Comparison of fiscal systems

6.5 Constructing the project cash flow

6.5.1 Project cash flow under tax and royalty terms

6.5.2 Project cash flow under Production Sharing Contract terms

6.6 Discounting - the time value of money.

6.6.1 Cost of capital

6.6.2 Opportunity cost

6.6.3 Internal rate of return

6.7 Incorporating inflation into the project cash flow

7 - Economic indicators from the DCF

7.1 Indicators from the cash flow and discounted cash flow

7.2 Indicators of efficiency

7.2.1 Capital efficiency

7.2.2 Technical cost efficiency

7.2.3 Unit technical cost and break-even price

7.2.4 The interpretation and application of IRR

7.2.5 Cautionary use of Excel = IRR function

7.2.6 IRR and RROR as a hurdle rate

7.3 Summary of economic indicators

7.4 Incorporating decommissioning cost

7.5 Choosing between alternative projects

7.6 Distinguishing net cash flow from net income

8 - Risk analysis and decision-making for development

8.1 Development planning using a scenario approach

8.2 Describing subsurface uncertainty - reservoir realisations

8.3 Creating development concepts

8.4 Applying investment themes

8.5 Selecting the favoured concept

8.6 Risk management of the development concept

8.6.1 Spider diagrams

8.6.2 Bow Tie model

8.6.3 The risk matrix

8.6.4 The risk register

8.6.5 A financial adviser's view on risk

8.6.6 Utility

9 - Incremental projects and decommissioning

9.1 Identifying incremental projects

9.2 Incremental project economics

9.3 Ranking incremental project opportunities

9.4 Decommissioning

9.4.1 The economic limit and cessation of production

9.4.2 Decommissioning activity

9.4.3 Decommissioning costs

9.4.4 Fiscal treatment of decommissioning costs

9.4.5 Decommissioning cost liabilities

10 - Portfolio management

10.1 Managing value and risk

10.2 Portfolio effect on volumes and risk

10.3 Portfolio effect on value and risk

10.3.1 Combining assets parametrically.

10.3.2 Combining assets using Monte Carlo simulation

10.3.3 Systematic and unsystematic portfolio risk

10.3.4 Markowitz diversification

10.4 The efficient frontier - balancing the portfolio to match strategy

10.5 Gambler's ruin and exploration portfolios

Abbreviations, symbols and units

Index

Back Cover.

Notes:

Description based on print version record.

Description based on publisher supplied metadata and other sources.

ISBN:

9780128232064

0128232064

9780128211908

0128211903

OCLC:

1235761333