training specialists to the upstream oil and gas industry

Risk Analysis, Prospect Evaluation and Exploration Economics

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Course overview

Participants will learn how to take hydrocarbon volumes and risks and apply a structured decision analysis process to them. The portfolio optimization process will also be discussed in order to help participants understand how to select the “best” exploration projects.

The comparison of exploration projects under different fiscal regimes will be presented by incorporating discounted cash flow and net present value. The basics of decision analysis for exploration will be reviewed using sensitivities, decision trees, expected monetary value, and the value of information.

This course uses Excel so participants must bring a laptop.

The course is designed for

Exploration geoscientists and managers who need an understanding of the economics of petroleum exploration.Attendees should have a basic knowledge of Petroleum Geology and Petroleum Systems.

Course outline

Day 4: Decision Analysis

  • Sensitivity analysis
  • Decision trees
  • Expected monetary value
  • Value of Information

Participants will gain an overview of important concepts and examples of decision analysis. The uncertainties, risk, and various ways of incorporating them in the oil and gas project evaluations will be discussed. The use of a proven decision analysis process including sensitivities, decision trees, and the value of information in both deterministic and probabilistic approaches to evaluating oil and gas projects will be the key concepts covered.

Day 5: Portfolio Analysis

  • Comparing projects
  • Bringing it all together, from play ranking to EMV
  • Portfolio analysis and why it is important
  • Strategy and portfolio analysis

Participants will learn about portfolio level analysis and why it is especially important for companies involved in exploration. Also, portfolio management strategies involving exploration will be discussed. Finally, participants will work a comprehensive problem to determine play ranking in their portfolio.

Day 1: The Business of Exploration

  • Why companies explore
  • The value chain in the E&P industry
  • Justification for exploration
  • How a company’s vision, mission, and strategy drive exploration

Participants will learn why companies explore and what metrics are used to measure the success of an exploration program. The justification of exploration projects will be discussed. How a company's vision, mission, and strategy drive exploration and other parts of the E&P business will also be presented and discussed.

Day 2: Impact of Worldwide Fiscal Regimes on Exploration

  • Overview of worldwide fiscal regimes
  • Impact of fiscal regime on exploration
  • Comparing projects under difference fiscal regimes

The main types and elements of fiscal regimes around the world will be presented. Participants will learn to build cash flows for concessionary systems and simple production sharing contracts. Different types of service agreements will be reviewed, then investments under different fiscal regimes will be compared.

Day 3: Project Economics

  • The role of project economics
  • Calculating cash flow
  • Economic indicators
  • Net present value

The participants will receive an overview of petroleum economics, including an introduction to basic cash flow and net present value. A review of time value of money concepts and cash flow basics will also be presented. Common economic indicators and project selection fundamentals will be discussed.


Location Start Date End Date Cost Trainer Book
Upon request     £2,950 Jeannine Smith Make enquiry

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"The instructor is very knowledgeable and clear in delivering the message."
- Imtenan Almubarak, King Abdullah Petroleum Studies & Research Centre, Saudi Arabia

Website: Studio Beam Ltd