About this course
This course aims to raise to an intermediate level your knowledge and understanding of international E&P finance and accounting concepts. This is achieved by in-depth examination of international practices and current developments across a broad range of relevant topics. You are encouraged to challenge existing methods as a basis for reviewing procedures and introducing improvements in your own work place.
What you will learn
- Enhance your knowledge of accounting and reporting issues unique to the E&P industry with emphasis on the application of International Financial Reporting Standards (IFRS).
- Improve your understanding of accounting and reporting of Sales Revenue, Farm In/Farm Out, and Carried Interest.
- Enhance your knowledge of Production Sharing Contracts and Joint Venture Accounting issues, including Unitisation & Redetermination.
- Improve your knowledge of the Corporate Budget and Planning process including a review of Key Performance Indicators and Company Strategy.
- Raise awareness of the E&P business activity for which we are accounting and reporting.
The course is delivered using a combination of instruction, facilitation of group discussions, and the regular use of practical examples and exercises. This offers participants the opportunity to understand both the theory and the practical application of various E&P Accounting topics.
35 hours CPD Certified
Regulation of oil and gas company accounting
- Accounting standards applicable to E&P companies.
Accounting for Exploration & Appraisal Costs
- Understanding the scope for the use of differing accounting policies and practices in the capture and reporting of exploration and appraisal costs - all of which are permitted under IFRS.
- The nature of commercial reserves and their significance in accounting and reporting.
The DD&A calculation
- Calculating DD&A on a Unit of Production basis.
- Dealing with changes in costs and reserve estimates.
- Raise awareness of the differing approaches in use by E&P companies when interpreting and applying IAS 37 in accounting for decommissioning.
- Testing for impairment of assets. Comparison of IAS 36 and FAS 144 requirements.
Accounting Policies - Review
- Team exercise to consolidate E&P accounting policy topics covered to date.
Accounting for Financing Arrangements
- Common practice on accounting for E&P company financing and risk sharing arrangements, such as, farm in/farm out and carried interests.
Accounting for Sales Revenue
- Recommended practice on accounting for oil and gas sales, including pipeline blends and overlift/underlift adjustments.
Accounting for E&P Company Taxes
- Introduction to types of E&P taxes and specifically deferred tax accounting.
State Frameworks for the Control & Exploitation of Petroeum Reserves
- Overview of issues pertaining to the ownership of oil & gas.
- Comparing the Concessionary System to the Contractual System.
Production Sharing Agreements / Contracts
- Understanding the difference between cash flow and cost recovery.
- The relationship between cost oil & profit oil.
- Calculating and accounting for entitlement barrels.
- Understanding 'R' factos and their application.
- Risk Services Contracts.
- Accounting for production bonus in a PSA/PSC.
- Reserves movements in a PSA/PSC.
- Overview of Joint Ventures and the Bidding Process.
- The Joint Operating Agreement (JOA) and the Accounting Procedure.
- The principles of JV Accounting.
JV - Unitisation and Redetermination
- How to account for product and cost sharing changes following an equity redetermination.
JV Cash Management
- Cash calling, invoicing and cash management.
JV Billing Arrangements
- How to account for JV billing statements.
- Accounting for redetermination adjustments.
JV Cost Allocation
- Key issues in allocating JV costs such as transportation costs, PCO and G&A.
- A review of typical JV audit issues.
Planning & Budgeting
- The top down/management by objectives approach.
- Using the Budget <=Model.
- Review of the most commonly used industry key performance indicators.
- Compare and contrast Large v Small E&P company strategy.
- Team exercise to prepare and present an E&P company strategy.
Who should attend
We recommend that, to derive maximum benefit from this course, you should first attend our predecessor Level 1 course. Otherwise, this course is suitable for personnel with a good foundation knowledge in exploration and production accounting.
"I cannot think of a better value for money training I have attended, worth every penny. Drew and team passionately shared with us practical experience throughout our interaction in the course. "Joseph Kyeyune, Uganda Revenue Authority
"Overall understanding of the E&P industry. Give good grasp of the industry and give a starting point for interested professionals. "Ibrahim Issa Said Al Aamri, Daleel Petroleum
"This course has exceeded my expectations; I shall definitely recommend it to my staff and peers. "Edwin Kamar, Office of Auditor General
"Really excellent, I learned a lot. Deepened my knowledge of upstream business, made me appreciate the operations side more and made financial accounting side more clear. "Christine Magno, UT Global Services