Financial Management
of Energy Projects

By the end of this Financial Management of Energy Projects training course, the participants will be able to:

• Appreciate the specificities of the accounting standards in the energy projects
• Understand financial reporting requirements for the energy sector under IFRS and GAAP
• Analyze the financial statements of his organization
• Use the financial ratios to analyze the financial situation
• Manage the cash and working capital effectively
• Define fundamentals of cost analysis and capital budgeting
• Determine the cost of capital to evaluate alternative sources of financing
• Use the techniques of investment Appraisal
• Understand the derivatives and types of option in the energy sector

The participants in this training course will receive thorough training on the subjects utilizing a variety of proven adult learning teaching and facilitation techniques. It includes a mix of interactive techniques to ensure maximum understanding, comprehension, and retention of the information presented. Evaluation of case studies of energy projects using the latest techniques, brief presentations, group exercises, and discussion followed by participants' presentations of the results.

This Energy Training Centre training course is of direct relevance to the energy sector, and as a result, the organizations will benefit significantly from their employees' participation.

The organization will benefit from this training course through:

• More effective financial support for the financial mangers
• Greater relevance and reliability of financial management information
• More strategic thinking and focus on performance
• More efficient use of the corporate financial statements, its co-ventures, and its competitors
• The power of Finance Managers and staff to figure with less supervision
• Preparation of staff for increased responsibility

The Financial Management of Energy Projects training course is designed to strengthen the financial management knowledge and skills of the participants from the energy sector.

The training course will be of personal benefit to the participants by providing them with:

• A better understanding of the context and importance of the work you do
• Greater awareness of industry practices, problems, and solutions
• Increased understanding and assurance to finish tasks successfully
• Increased your level of confidence in working with financial information
• Greater job satisfaction in providing quality support to management
• Greater ability to supervise, develop, and motivate colleagues

This training course is ideally suited to those who work in the energy sector, particularly those in finance, accounting, and performance measurement roles.

This Energy Training Centre training course is suitable for a wide range of Professionals of Energy Sector but will greatly benefit:

• Board of Directors & Senior Management
• Financial & Accounting Department Managers
• Corporate Accountants, Financial Controllers, and Treasury Officers
• Management Accountants
• Financial and Investment Analysts
• Joint Venture Accountants and Auditors
• External, Financial, and Internal Auditors
• Government Regulators and Auditors

DAY ONE: OVERVIEW OF ENERGY PROJECTS & TOOLS OF FINANCE

• Definition of Energy Management Projects & the Objectives
• The Nature of the Energy Projects and Renewable Energies
• Finance for the Energy Projects: A Summary
• Financial Decision-Making in the Energy Projects
• The Business Environment
  • Business Objectives
  • Stakeholders
  • Corporate Governance
• A Review of the Tools of Finance
• Types of Financing Models in Energy Projects

DAY TWO: ACCOUNTING ISSUES IN EXPLORATION & EVALUATION OF ENERGY PROJECTS

• Accounting System and Principles
• International Accounting Standards
• Pre-Exploration Activities
• Successful Efforts Method
  • Acquisition Costs
  • Exploration Costs (Drilling vs. Nondrilling)
  • Unproved vs. Proved Property
  • Development and Production Costs
  • Impairment
• Full Cost Method
• Revenue Recognition
• IFRS within the Energy sector

DAY THREE: BASICS OF FINANCIAL MANAGEMENT OF ENERGY PROJECTS

• Objectives & Functions of Financial Management
• Financial Arrangements: Details and Terminology
• Short-term Financial Management:
  • Cash and Cash Equivalents
  • Short-Term Debts
  • Cash Management
• Understanding Financial Statements
  • Profit and Loss Account (Income Statement)
  • Balance Sheet
  • Cash Flow Statement
• The Term Structure of Interest Rates
• External & Internal Financial Audit
• Management Reports
  • Responsibility Reporting
  • Analysis of Variances

DAY FOUR: FINANCIAL ANALYSIS IN ENERGY PROJECTS

• Fundamentals of Financial Analysis
• Ratio Analysis
• Measures of Operating & Financial Performance
• Sensitivity and Risk Analysis
• Tax Implications
• Financial Annual Reports
• Energy Audits

DAY FIVE: FINANCING ENERGY PROJECTS

• Long-term Financial Resources
  • Risk assessment and management
  • Returns
• Basic Types of Financing
  • Debt
  • Equity
  • Grants and Guarantees
• Cash Management & Banking Facilities
• Mergers and Acquisitions Practices Today
• Project Financing/Shared Saving/Performance Contracting
• Screening Energy Efficiency Projects Using Financial & Economic Rates of Return
• Dividends and Share Repurchases Compared

DAY SIX: CAPITAL BUDGETING OF ENERGY PROJECTS

• Investment Proposals & Means of Project Evaluation
• Estimating Cash Flows for Capital Budgeting
• Cash Flows from Accounting Figures
• Biases in Capital Budgeting
• Options in Capital Budgeting
• Risk Analysis and Capital Budgeting
• Risk and Cost-Sharing Arrangements
  • Joint Ventures
  • Transfers of Interests or Risks
  • Production Sharing Contracts
  • Long-term Gas Contracts

DAY SEVEN: FINANCIAL STRUCTURE COSTING OF ENERGY PROJECTS

• Fundamentals of Cost Analysis
• Cost of Capital
• Cost of Debt
• Cost of Equity
• Weighted Average Cost of Capital (WACC)
• Equity and Commodity Risk
• Optimal Capital Structure

DAY EIGHT: ENERGY PROJECT VALUATION & INVESTMENT APPRAISAL

• Why Firms Merge
• Valuation Methods
• Payback
• Net Present Value (NPV) and Cash Flow
• Return on Investment (ROI) and Internal Rate of Return (IRR)
• Discounted Payback
• Investment Need, Appraisal, and Criteria
  • Criteria
  • Energy Proposals vs Other Competitive Proposals
  • Investment Appraisal
  • Protecting Energy Investment

DAY NINE: CAPITAL STRUCTURE OF ENERGY PROJECTS

• Capital Structure Concept
• Capital Expenditures
• Capital Structure and Financial Distress
• Agency Costs in Financial Distress
• Causes of Financial Distress
• Costs of Financial Distress
• Design Aspects for Measures to Attract Privet Investment

DAY TEN: THE ROLE OF FINANCIAL INSTRUMENTS OF ENERGY PROJECTS

• Derivative Markets
• Forward Contracts
• Futures Contracts
• Swap Contracts
• Option Contracts
• Types of Options
• Risk Modification with Options