Night School – Building the Portfolio (Virtual Course)

Part 1 | Portfolio Management in the energy sector
Facilitator: Gavin Ward
Date: Monday 23 November
6:00pm – 8:00pm

Part 2 | Data Rooms and Farmouts, Oil and Gas Property Evaluation Techniques
Facilitator: Stuart Harker
Date: Thursday 26 November
6:00pm – 8:00pm

Part 3 | Negotiation Skills
Facilitator: Paul Keighley
Date: Tuesday 1 December
6:00pm – 8:00pm

Part 4 | Oil and Gas really can be found in nice places
Facilitator: Stuart Harker
Date: Wednesday 9 December
6:00pm – 8:00pm

What will we cover?

Session 1:

The session will describe what  portfolio management is all about and how small, medium and large energy companies assess and select drilling candidates (investment opportunities). We’ll cover the theory and show examples of what happens in practice using methodologies in place at a few companies in the energy sector.

Outline

• Theory of portfolio/investment management
• Small v large portfolios (Focus v Diversification)
• Trade-off between financial & oil field metrics (ROCE, NPV, VIR, Reserves, $/Boe)
• Deterministic ranking V Probabilistic modelling
• Efficient Frontier & investment selection process
• Examples of portfolio management In practice
• Pitfalls (theory v practice)

Session 2:
Outline

• What is the purpose of a data room and reasons for farmouts
• How to construct a user friendly data room set
• Types of Oil and Gas Properties
• Evaluation Approaches and Methodologies
• Pitfalls to avoid
• Report and Presentation Guidelines
• How to make a technically robust, yet time efficient and cost effective reports
• Important Data Room and Farmout Evaluation Take-Aways

Session 3:

This two hour course will focus on the 5 steps to follow to have an effective negotiation.
The steps are:

• How to prepare for a negotiation
• How to initiate a negotiation
• How to present your case
• How to enter the bargaining phase
• How to close out a negotiation

We will also look at how to handle “difficult people”. And if time permits have a question and answer session.

Session 4:

• Examples from California and Greece.

Abstract

There is the myth that you don’t find oil in nice locations using examples like the cold hostile waters of the North Sea plus hot and arid areas of the Middle East.  This lecture demonstrates that this is untrue and examples are given from California and Greece – two popular tourist destinations and thus considered to be “nice places”.  Both areas have production from Mio-Pliocene structures and are earthquake prone.  However, California has vast and long established production from both on and offshore, whereas Greece has only small offshore production from the Prinos Basin.  Potential for new oil and gas discoveries in California is very good and lies in deeper targets and unconventionals.  The upside for Greece lies largely in deep water areas and is as yet unproven.

Gavin has an economic, accounting and technical skill set from over 30 years in the oil and gas industry at major operators and independents. He has peer reviewed and valued assets and companies in Europe, Africa, Middle East, Asia and North America. He is author of many papers on valuations, risk and volume estimation and is able to translate technical evaluations into meaningful economic and financial assessments as a Chartered Accountant and professional Geoscientist. He has used these skills as the Europe & Mediterranean Portfolio Manager for Noble Energy during their gas discoveries in the eastern Mediterranean; as Reserves and Economics Manager for Centrica Energy during their acquisition of over $2 billion of assets; as Regional Subsurface Manager for a major gas field complex and development of satellite fields and as Non-Operated Production Manager for 23 producing North Sea fields for Centrica Energy. He is now a partner in RISC Advisory which provides expert technical opinion on acquisitions from RISC’s offices in London and Australia for operators, private equity and banks.

Stuart gained his BSc in Geology in 1972 from the University of London, followed by an MSc (1975) and PhD (1978) at the University of Saskatchewan, Canada.  He joined Texaco as an exploration geologist in 1976, completing his PhD remotely.  A company transfer to Aramco in Saudi Arabia followed in 1978, where he worked on both Mesozoic and the then new Palaeozoic plays.  Stuart returned to Canada to work for Murphy Oil in 1980, responsible for exploration in Alberta and British Columbia.  The lure of international work led to him taking a job with Occidental in California in 1981, where he was Involved in the discovery and appraisal of Harriet, Jabiru and Blina fields in Western Australia; Dhurnal field in Pakistan and Safah field in Oman, becoming Chief Geologist for the Middle and Far East in 1982.  In 1985 Stuart transferred to Occidental’s Aberdeen office and worked on the Producing Fields and Exploration of the UKCS including the discovery and appraisal of West Claymore, Saltire and Scapa oil.  Elf bought Occidental’s UK assets in 1991 and Stuart worked in several management roles in Exploration and Development, before transferring to the Paris Headquarters in 1998 to work on International Prospect Evaluation.  In 2000 he moved back to Aberdeen following the Total takeover of Elf to be responsible for Exploration and Development around the operated North Sea fields, including the discovery of the Forvie North gas-condensate field.  Stuart took early retirement from Total in 2004 and worked for the following four years in consulting, latterly with PGS on a variety of international exploration and development projects, prior to joining Circle Oil as VP Geology in 2008. After joining Circle, Stuart was involved in the discovery and development of 13 gas fields in Morocco and two oil fields in Egypt, as well as the evaluation of multiple exploration and field redevelopment opportunities.  Stuart has taught on the Masters course in Hydrocarbon Exploration in Aberdeen and was appointed a Visiting Geoscientist of the AAPG and an Honorary Professor at Heriot Watt in late 2014.  On retirement from Circle Oil in June 2015, Stuart established Morningside Petroleum Geology as his own consulting company in Edinburgh for the exploration and production industries.

Paul has over 40 years Exploration and Production upstream expertise. He has held senior executive positions with Crescent Petroleum (General Manager), Buttes Gas and Oil (President), Neste Oil (Vice President) and Burmah Oil (Production Manager) (now part of BP) as well as managing director of a drilling contracting company.

He lived in the Middle East for 11 years and has travelled and negotiated contracts in many Middle Eastern countries and many other countries in the World.

Since 2006 he has been an international consultant advising and training companies in leadership, communication and negotiation skills.