Foundation Certificate in Financial Principles - Oil & Gas (FCFP O&G™) (4 days)

Course Overview

QualifiOrganisations within the O&G sector are under unprecedented pressure to deliver value to their shareholders be they individuals, institutions or governments. The efficient utilisation of resources is paramount to the success of any organisation and it is Finance and Accounting that comprises the universal business language that enables organisations to effectively manage those resources.Competitive advantage can be gained by the better allocation and utilisation of resources driven by informed financial planning and decision making not only internally but also by understanding what the Competition is up to by forensic examination of their published financial statements.

The purpose of this 4 day foundation level course is to assist in improve delegates’ skills and knowledge by building upon their understanding of current international practices in finance and accounting within the O&G industry. The course will cover the key accounting standards, policies and practices in the oil and gas industry including the accounting and financial implications of Exploration and Production.

Course Contents

Getting Started

  • Introductions and Expectations
  • Financial terms and definitions
  • The language of the O&G Finance business

Basic Principles

  • Basic accounting concepts
  • Basic Accounting rules, standards and policies
  • GAAP and other common terms
  • The Balance Sheet
  • The Profit Statement
  • The Cashflow Statement
  • Difference between Profit and Cashflow
  • Interpreting Financial Statements

O&G Standards

  • The role of International Financial Reporting Standards (IFRS)
  • IRFS vs GAAP

O&G Accounting principles

  • Accounting concepts in O&G
  • Full Cost Method
  • Successful Effort Method
  • Costs and Expenditures
  • Appraisals
  • Pre-Licencing
  • Acquisitions
  • Exploration
  • Development
  • Production
  • Impairment
  • Decommissioning

Classifying assets and Liabilities

  • Property, plant and equipment
  • Intangibles and in particular exploration and evaluation activities

Production Sharing Agreements

  • Acquisition Costs
  • Operational Costs
  • Capital Costs
  • Non Capital Costs
  • Exploration Costs
  • Development Costs
  • Support Costs
  • Depreciation and Amortisation
  • Inventory
  • Other Considerations
  • PSC Accounting vs GAAP

Managing Cashflow

  • Sources of finance
  • Cost of capital
  • Working capital
  • Preparing cashflow forecasts

Managing and improving profit

  • Understanding how profits generate cashflow
  • The fundamental nature of costs: fixed and variable business costs
  • Understanding gross margin and break-even
  • How common pricing methods affect gross margin and profit
  • Effective strategies to improve gross margin

Measuring and managing business performance

  • Interpreting published financial statements
  • Measures of financial performance and strength
  • Return on investment (ROI):
  • How profit margin and net asset turnover drive return on net assets
  • Understanding competitive advantage: cost and differentiation advantage
  • Key Performance Indicators in the O&G Sector

* Only those who attend the course in full, participate effectively and pass the open book examination will receive the Foundation Certificate in Financial Principles O&G (FCFP O&G™)

Benefits, knowledge, skills gained by attending this FCFP O&G™ Course

By attending this Course you will learn the skills required in order to:

  • Apply the basic concepts and terminology for accounting and finance in the Oil and Gas sector
  • Understand the different financial statements and their roles; Profit Statement, Balance Sheet and Cashflow Statement
  • Understand fundamental business finance concepts; understand, analyse and interpret financial statements
  • Understand the differencebetween financial, managerial, and contract (joint operations) accounting
  • Appreciate the various different oil and gas accounting methods
  • Understand the vital difference between profit and cashflow; identify the key components of working capital and how it can be managed to generate strong cashflow
  • Understand financial reporting requirements for oil and gas companies under IFRS, U.K. and U.S. GAAP
  • Understand and apply accepted capitalization rules and depreciation methods
  • Recognize the accounting treatments of joint ventures including Production Sharing Agreements (PSA)s
  • Read and interpret footnotes and disclosures for oil and gas companies
  • Recognize how financial and accounting decisions affect earnings, cash flows and operational decisions
  • Analyze and understand the generally accepted oil and gas key financial ratios

Who should attend?

This course is aimed not only at newcomers and /or delegates with a technical background wishing to understand the basic concepts of accounting and finance in the Oil and Gas sector but is also for experienced financialhands or other financial related personnel who wish to refresh their understanding of petroleum accounting concepts or to better understand some of the unique issues as they relate to the petroleum industry.

Trainers

Meet your training course director: Alan Mayo

Alan MayoAlan is a highly experienced accounting and finance professional. For over twenty years Alan has specialised in consulting and the delivery of in-house and public financial training delivering programmes in IFRS, local GAAP, interpretation of financial reports and financial management. During this time he has worked across many sectors and in many countries.

Alan started his career at PwC, where he worked for eight years in London in their audit and business advisory division where he obtained his chartered accountancy qualification. After qualifying he was seconded for two years to their Paris office. On his return to London from Paris he co-founded the client training business for PwC in London.

Within the oil, gas and petrochemicals sector Alan has worked on IFRS financial reporting, oil and gas accounting and performance issues with finance and management teams from Saudi Aramco, Petronas, Kogas, Eni, Mubadala, Nigerian LNG and the Ugandan Revenue Authority and has taught numerous others through open courses.

Previously at PwC Alan worked on the audit and privatisation of British Gas and ran a highly successful financial controller programme for management teams in Shell’s upstream businesses worldwide. Also as a senior consultant with PwC he led a team of financial training consultants responsible for developing and delivering programmes in financial reporting, business valuation and shareholder value.

 

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