CORE SKILLS

Oil and Gas: Valuation Techniques and Modeling

For further information on dates or how to enrol on to our courses, please call +44 (0)20 7549 2591 or alternatively email our bookings team.

Course details

Whole Company Financial Modeling for E&P Companies

This section will allow delegates to learn how to build a three statement model for an E&P company. It will highlight the key value drivers and their inter-relationships.

Learning outcomes

  • Oil price benchmark and realised premium/discount to the benchmark
  • Production growth
  • Production cost per barrel
  • Replacement costs per barrel (finding & development)
  • Exploration & development expenditure
  • Movement in undeveloped vs. developed reserves
  • Movement in abandonment provision
  • Effective tax rate
  • The model will subsequently be used to perform a DCF and NAV valuation

DCF and NAV Valuation

This section will allow delegates to learn how to build a DCF valuation model for an E&P company and cover the five key stages.

Learning outcomes

  • Calculating FCF from EBIT
  • Estimating WACC
  • Estimating Terminal Value (Gordon growth vs. terminal EBITDAX multiple)
  • Discounting to derive an enterprise
  • Reconciling enterprise value to target share price

We will compare a DCF ‘going concern’ model with a ‘finite life’ NAV model, in which all exploration is discontinued and existing reserves are monetised over their expected production profile.

Finally, as a case study, we will examine the competent persons valuation report and M&A defence document covering a full NAV.

Learning outcomes

  • 2P reserves
  • Contingent resources
  • Best Estimate of Prospective resources (EMV)
  • Operating Working capital
  • Other balance sheet adjustments
  • Base case vs. best case

Comparable Transactions Analysis

Learning outcomes

  • Select comparable transactions
  • Obtain historic and projected data
  • Normalise the results and exclude extraordinary charges
  • Calculate premiums
  • Compute operations metrics: EV/1P or 2P reserves, EV/MCFE
  • Compute operational metrics: EV/DACF, EV/EBITDA, EV/EBITDAX, Price/NAV
  • We will examine E&P transactions in the US and Europe

 

Putting the Analysis Together

Review a football field of the various valuation methodologies and benchmarks.

Learning outcomes

  • 52 week high and low
  • Equity research
  • Trading comparables
  • DCF (with and without synergies)
  • NAV
  • Transaction comparables

Course materials

While this is a face to face training course, a blended learning approach is taken and delegates will be provided with access to AMT Online. Our study materials contain both the knowledge and practice materials required to assist with the learning process and help you in your job role. Course materials include:

  • e-binder
  • laminated summary sheets
  • 24/7 access to DELTA online learning environment
  • class recordings
  • course notes
  • quizzes
  • electronic homework/study files

“It’s great to have access to the AMT online platform. I found the videos and quizzes really useful to refer back to after my public course. The videos in particular were simple and easy to understand.” ~ analyst, private equity firm

Virtual Classroom

Who should attend the course?

  • New hires who have joined the firm late and missed the in-house program
  • Individuals looking to fill a knowledge gap
  • Experienced bankers looking to refresh their technical skills
  • Teams employed in financial strategy roles from non-banking corporations
  • Graduates preparing to interview for a role in the finance sector
  • Students at business school and looking for a career in finance

View video to get a flavour of the course

What is a Virtual Classroom

Virtual Classroom training is a new and highly engaging way of delivering programs remotely with enhanced levels of interactivity compared to conventional webinars. In AMT's Virtual Classroom participants are encouraged to activate their own webcams and mics throughout the class allowing for real-time engagement, both verbal and non-verbal, with fellow participants and their trainer. Participants can also share their screens to get instant assistance in any technical exercise; just like asking the trainer to walk over and help in the classroom! We have seen a step-change in participant engagement with this new technology. The trainer's ability to see a selection of their participants' faces in real-time, and to react to their verbal and non-verbal cues creates a remarkably realistic classroom-like experience. For an example of the technical requirements of for our Virtual Classrooms click here.

Course trainers

Prerequisite