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An Interactive 5 - Day Training Course

Energy Value Creation

Analysis for Investment Decisions

Upcoming Sessions

30 Jan - 03 Feb 2022 Dubai - UAE $4,950 Register Now
31 Jul - 04 Aug 2022 Dubai - UAE $4,950 Register Now

Mark Twain famously said, “buy land—they’re not making it anymore”. This adage had a similar appeal in the early energy industry. Investors went for “find energy—wherever it is and as much—they’re not making it anymore”. And at least in the early decades of the petroleum industry, the advice worked. Yet, as real estate investors soon found out that not all property has value, energy investors also realised that not all energy projects create value. The energy business is facing new challenges, from harder to find resources to an uncertain market. The energy version of Mark Twain's adage has effectively lost its appeal.

With their technical and market uncertainty, then which projects should we invest in and which ones to reject? We should select those that create value. Here, analytics and valuations have become increasingly significant. We should understand the uncertainty, describe its effects, and make informed decisions. This course discusses the art and science of analysis for value creation. It discusses theory and practice and aims to generate insights about value creation.

Objectives

This course aims to provide the knowledge and skills to analyse and evaluate investment decisions— to distinguish value-creating from value-destroying ventures. Finding energy resources is an uncertain business. Historically, many ventures failed, yet some successful projects also led to business success and significant value creation. Then, what is a good project opportunity?

The answer is likely multi-dimensional; it is about understanding disciplines from subsurface to economic, comprehensive coverage that eventually reflects our understanding of the value potentials of energy projects.

By the end of this training course, the participants will be able to:

  • Understand the principles of finance and economic decision analysis in the energy business
  • Gain skills in effective formulation of investment decisions
  • Understand the challenges of investment under uncertainty
  • Gain skills in using analytical tools, including probabilities and decision trees
  • Apply the knowledge and skills to the analysis of value-creating decisions

Methodology

The training course participants will receive thorough training utilising various proven adult learning teaching and facilitation techniques, including lectures, discussions, and computer applications. The sessions are interactive, and we encourage active engagement in the discussions. At the heart of the informed analysis is clear thinking. This course promotes economic reasoning and logical thinking through the discussion of real-world case studies.

Organisational Benefits

Any energy firm primarily runs a business, and creating value should be the goal. 

  • The energy business entails technical and economic risks
  • Understand and analyse risk and uncertainty for good decision making
  • Firms that understand good decision making and invest in valuable ventures will be poised to succeed
  • Focus on the essential knowledge and techniques that enhance organisation’s analytic and decision-making capabilities
  • Use modern techniques in analysis that is both useful and effective in practice
  • The analytics supports communications with business partners

Personal Benefits

This course focuses on everyone who can think and act clearly and effectively in energy value creation.

This course cultivates individuals that:

  • Have gained general understanding of value creation in an uncertain world
  • Understand the sources of uncertainty, both subsurface and commercial
  • Identify key uncertain factors in investment decisions and analyse energy investment decisions
  • Use computer models to analyse risk and uncertainty for value creation
  • Have the skills to apply quantitative models to crucial energy investment decisions
  • Generate value-creating decision insights

Who Should Join?

This training course is beneficial to anyone involved in valuations and investment decision making. Likewise, individuals in technical and managerial positions interested in the energy business will benefit from this course.

This training course is suitable to a wide range of professionals but will greatly benefit: 

  • Analysts working on feasibility analysis of energy projects
  • Engineers involved in the investment decision process
  • Managers with responsibility or interest in the investment decision process
  • Decision – makers within corporations or government bodies
  • Individuals interested in expanding their skills and knowledge in the field of energy value creation

Course Outline

DAY ONE: PRINCIPLES OF CORPORATE FINANCE AND VALUE CREATION 

  • Introduction to Energy Value Chain
  • Analysis for decision making and corporate objectives
  • Understanding uncertainty in Energy Projects
  • Modelling Uncertainty
  • Using probability to encode uncertainty
  • Economic Consideration: Informed Analysis for value-creating decisions

 DAY TWO: FROM UNCERTAINTY TO VALUE 

  • Comparative Analysis of Value
  • Comparisons of Value Across Time
  • Comparison of value across various levels of uncertainty
  • Risk vs Uncertainty: Theory and Practice
  • Principles of Discounted Cash Flow

 DAY THREE: PROJECT CASH FLOWS, UNCERTAINTY, AND RISK 

  • Technical and Market Risks
  • The Effect of Diversification
  • Risk-Return Tradeoffs
  • The Capital Asset Pricing Model (CAPM)
  • Discounting Risk Premiums

DAY FOUR: PROJECT APPRAISALS 

  • Uncertainty, risk, and financial return at Project and Portfolio Level
  • Financing Leverage and its Effect
  • General Investment Analysis, Energy Markets and Prices
  • Estimation of the Discount Rate
  • Introduction to certainty-equivalent approach to investment analysis

 DAY FIVE: CHALLENGES IN THE ENERGY LANDSCAPE 

  • Managerial flexibilities and uncertainty
  • Energy commodities and exchanges, market instruments to hedge risk
  • Decision trees as a modelling and communications tool
  • An integrated approach to valuation and analysis of value creation
  • Future Challenges: environmental issues, emission taxes, and emission markets

The Certificates

Certificates

The Energy Training Centre Certificate of Completion will be given to the participants who
attended and completed the training course.

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