Introduction to the Business of Upstream Oil and Gas

The exploration and production of energy resources is truly a process that has no parallel in business today. From the complex technology involved in the physical recovery of energy reserves to the intricate accounting and legal provisions, there is no industry more complex. This course deals with the fundamentals of the energy industry including geological, physical and economic influences as well as the flow of money and information through an Upstream energy company.

Who Should Attend:

Employees who are new to the energy industry or who need an update and review. IT employees who support business processes. Employees whose experience is limited to a single or a narrow work area. Public accountants and consultants who perform services for Upstream energy companies. Employees of financial institutions who fund energy exploration and production or who administer trusts. Sales personnel of companies who sell to Upstream energy companies. Energy company employees who need a better understanding of the functions of other departments.

Prerequisites: None

Upon Completion Of This Program, Participants Will Be Able To:

• Better interact with people in the energy business both inside and outside their company

• Better understand how their company fits in and what makes it successful

• Gain insight as to why things are done the way they are

• Work more efficiently with consultants, auditors and other professionals

Key Topics and Objectives:

Section A(1 day) addresses the industry, the roles of the US and International energy community, the

terminology, history and chemistry of the oil and gas business, key differences between oil and natural

gas, pricing issues in energy and geological and environmental concerns.

Section B(1 day) overviews key factors in oil and gas accounting, tracks the flow of information

through an Upstream company, examines the roles of each department in an Upstream company,

explores the principles of drilling and completing a well and handling the associated money and

ownership factors.

Section AB (1 to 2 days) combines sections A & B into a comprehensive program covering the topics

listed below culminating in an interactive game designed to test the participants’ understanding of the

industry.

I. Industry overview

a. US vs International

b. Integrated vs Independent

c. On-shore vs offshore

d. Oil vs Gas

e. Upstream vs Downstream

f. Terminology

g. Full cost vs successful efforts

h. A brief look at key FASB directives

II. Oil company overview

a. Executive and Departmental Roles

b. Operational lifecycle of an E&P project (G&G-Leasing-Permitting-Drilling-Completion-Production-P&A)

c. Business lifecycle of an E&P project (Land-AP-JIB-AR-Prod-Allocation-Valuation-Revenue-Balancing)

d. Ownership and Interest (WI, RI, ORRI, Farmouts, NPI, Prod Pmts)

e. Commodity pricing, sales and marketing

III. Oil & Gas Jeopardy Game/Quiz

Quality programs – offered on-site and adapted for your company. Contact Jim Hoffman at 214.763.9644 or via email at jhoffman@pdi.org. Visit us online at www.pdi.org