Accounting and Finance for the Oil & Gas Industry

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  • Fees : 2600 $
  • Date 09 Jun 2019
  • Location Abu Dhabi, English
 

ACCOUNTING AND FINANCE FOR THE OIL & GAS INDUSTRY

About the Course

This course will provide accounting and finance professionals with an enhanced awareness and understanding of the main technical accounting and finance issues directly related to oil and gas accounting.

Management, engineering and other skilled professionals will gain insight into the primary scorekeeping functions of their company and industry and an appreciation for the unique nature of oil and gas accounting. Investment and banking individuals will gain greater insight into how accounting information in the oil and gas industry indicates performance and valuations.

The course will begin with a general introduction to the industry and a quick review of the basics of accounting and financial statements. We will then highlight the big picture issues that make accounting in the oil and gas industry different from accounting in many other industries, including capitalisation and expensing of cash outlays and valuation of assets. 

A full range of specific accounting issues in each will be presented and discussed including: revenue recognition, determination of expensing or capitalisation, depreciation and amortisation issues and methodologies, exploration and development well drilling and costs, production costs, revision of reserve estimates, abandonment costs, etc.

Who Should Attend

Course Level: Introductory

This course is specifically designed for personnel involved with the financial accounting and reporting domains within the oil and gas sector.

It will benefit all those involved with and related to the oil and gas industry and are responsible for understanding, interpreting and reporting on accounting and financial data and analysis

Course Outline

 

Overview of the industry and review of oil and gas accounting

 
 
  • Overview of the current challenges in gaining access to reserves
  • The nature of the industry and the role of the financial accountant
  • Oil and gas financial accounting and reporting principles
  • What are the financial accounting and reporting challenges and how do they differ from other industries
  • Specific accounting terminology, concepts, policies and procedures
  • Various types of reserves
  • Basic differences between full cost and successful efforts accounting
  • Insights into why financial statements are so different
   
   
   
  Accounting for non-drilling exploration cost – Successful efforts
 
  • Accounting for geological and geophysical studies
  • Carrying and retaining costs of unproven properties
  • Dry-hole and bottom-hole contributions
  • How are the costs of evaluating a prospect handled?
   
  Drilling and development costs – successful efforts
 
  • Computing depreciation, depletion and amortisation (DD&A) on producing fields
  • Depreciation of supporting equipment and facilities
  • Accounting for future dismantlement and site restoration costs
  • How are capitalised costs written off?
  • What are the relevant accounting standards?
   
  Accounting for production activities
 
  • Computing depreciation, depletion and amortisation (DD&A) on producing fields
   
  Revenue accounting
 
  • Accounting for revenue from sales of oil and gas
  • How to account for revenue transactions
  • When is revenue recognised?
   
 

Joint Ventures (JVs) and Production Sharing Contracts (PSCs)

 
  • Examining JVs, PSCs and accounting procedures
  • Methods to allocate JV costs
  • How do operators and non-operators track and account for costs of joint operations?
   
  Financial disclosures
 
  • Required disclosures, source nature and examples
   
  Oil and gas financial statement analysis
 
  • Reading and interpreting financial statements
  • Examining ratios specific to the oil and gas industry
  • Examine various other ratios
  • Dealing with the ‘bean counter’ image. Examining the multiple skill sets required
   
  Ensuring good corporate governance
 
  • What is corporate governance?
  • Who is responsible for ensuring good governance?
  • What is the role of finance?
   
  Cost estimation
 
  • What is a cost estimate?
  • What are the elements that need to be considered?
  • Linking risk to the cost estimate
  • Determining and managing contingency reserves
     Activity: Cost estimation

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