Fundamental of Oil and Gas Business Valuation

Transkripsi

1 Fundamental of Oil and Gas Business Valuation Oil and Gas Economics Techniques and Application Course http;//explorerealoptions.com

2 The Investment Environment 1 Cash Intensive 3 High Uncertainty And Risk 2 Long Lead Time 4 Unique Tax and Contract Structure

3 Konsep Penilaian SDA pada PMK 98/PMK.06/2010 Sumber daya alam meliputi semua kekayaan alam baik berupa benda mati maupun benda hidup yang berada di bumi, yang dapat dimanfaatkan untuk memenuhi kebutuhan hidup manusia. Objek Penilaian: Minyak Bumi Gas Bumi Panas Bumi Mineral logam Batubara Hutan

4 Tujuan Penilaian Pemanfaatan Penilaian Minyak Bumi, Gas Bumi, Panas Bumi, Mineral dan Batubara Pengusahaan Perkiraan Potensi Nilai Wajar Pemanfaatan Penilaian Hutan Penggunaan Perkiraan Nilai Ekonomi Nilai Ekonomi

5 Konsep Penilaian SDA pada PMK 98/PMK.06/2010 (3) Nilai Wajar adalah perkiraan jumlah uang pada tanggal Penilaian, yang dapat diperoleh dari transaksi jual beli, hasil penukaran, atau penyewaan suatu aset, antara pembeli yang berminat membeli dan penjual yang berminat menjual atau antara penyewa yang berminat menyewa dan pihak yang berminat menyewakan dalam suatu transaksi bebas ikatan, yang penawarannya dilakukan secara layak dalam waktu yang cukup, kedua pihak masing-masing mengetahui kegunaan aset tersebut, bertindak hati-hati, dan tanpa paksaan

6 Valuation Process Technical Input General Assumptions Fiscal/ Economics Modeling Economic Result & Analysis Management Decision

7 Key Valuation Drivers for Upstream Business Cycle Fiscal terms Life of field depends on production rate Development strategy Cost Operating expense (opex) Capital expenditure (Capex) Price Quality of oil/gas Crude reference price Gas contract Reserve Production Classification between resource and reserve Reserve Certification Proven & probable reserve for production base Revenue Factors

8 1. Business Cycle Seismic & Exploration Reserve Development Production Discovery yrs No discovery Plan of Development (POD) Work Program & Budget (WP&B) 30 years

9 2. Price Gas Sold under long term contracts More stable price Some gas formula linked to oil price Difficult to assume Valuation based on different oil prices Oil

10 What factors influence the price? 2. Price Oil & Gas Quality Market condition Supply & demand Global financial & market behavior Historical price & trends

11 3. Reserve : Production Reserve/ Resource Identified Reserve Contingent Resource Possible Reserve (P3) Probable Reserve (P2) Proven Reserve (P1) Underdeveloped Developed Initial Oil/Gas in place Recoverable Reserve Notes: For purposes of valuation use proven and probable reserves Production Profile

12 Production Profile Factors : 3. Reserve : Production Recoverable reserves Quality if the oil, condensate and gas Average well productivity, number of wells Transportation methods Production constraints Affect the shape and timing of the production curve impact values General rule: The earlier the production starts, the higher the value of the asset

13 3. Reserve : Production Oil Production Profile : Build Up Period Number of pre-drilled wells Constraints on number of wells and facilities capacity Decline Phase Rule of thumb: 40-50% of the reserves of Plateau an offshore oil field will be produced before the decline phase begins Absolute level dictated by recoverable reserves. Rule of thumb: 8-10% of oil reserves will be produced in each plateau year. Affected by number of wells, facilities capacity, reservoir performance, facilities life, lease terms, tax regime/economics.

14 4a. Cost Factors - Operating Expense (OPEX) Operating Expense Fixed production costs Variable costs Intangible drilling cost Depreciation expense Abandonment Cost to plug wells Remove facilities Return the land to its original condition Economic cutoff = revenue < OPEX = loss stop operation

15 4b. Capital Expenditure (CAPEX) Exploration & Appraisal Cost Acquisition costs / signature bonus Seismic acquisition and interpretation, Dry hole / discovery costs, Appraisal well costs Development Cost Tangible development drilling Production and processing facilities Transportation & storage Note: Intangible drilling cost is treated as expense in PSC regime

16 Source: WoodMac QUIZ Unit Cost Reserve = 500 MBO Offshore (1,087 m) Floating Processing Storage Operation (FPSO) Reserve = 500 MBO Onshore Tie-in to main central production and processing facilities Reserve = 500 MBO Offshore (115m) Fixed platform Cote d lvoire Basin East Siberia, Rusia Pearl river mouth basin, China TASK: Please match each project with its development & operating cost!

17 PSC Cash Flow-Data Input 1. EXPLORATION Signature bonus G&G studies Speculative Resources Probability of exploration success Wells & testing cost Appraisal Costs PSC 2. DEVELOPMENT Recoverable Reserves Development concept Development Cost: facilities, piping etc Drilling Cost Timing and phasing of development costs 4. ABANDONMENT Timing of abandonment cost Salvage value 3. PRODUCTION First of production Oil Production profile Gas demand forecast and delivery rates Typical operating cost (fixed and variable) Prices Government take fiscal terms applied

18 EXERCISE PSC CASH FLOW Please see file : 2. Exercise (master model).xls

19 EXERCISE PSC CASH FLOW Contract & Assumption Unit FTP share 20% Contractor split share % Government split share % Final Tax rate 48.00% DMO share 25% DMO fee 15% Investment Credit 17% Lamanya tahap konstruksi 2 tahun Mulai produksi 2012 Lamanya tahap produksi 16 tahun Unrecovered Cost (Sunk Cost) 11,500 ribu $ Harga minyak selama produksi $/bbl DATA Profil produksi Produksi/hari (ribu barel) Jumlah hari produksi setahun Produksi/tahun (ribu barel) ,401 1,951 1,956 1,970 1,613 1,320 1, Profil belanja kapital (Capex) Jumlah sumur 1 1 Biaya Intangible drilling (ribu $) 31,080 25,900 Biaya tangible drilling (ribu $) 10,920 9,100 Biaya fasilitas (ribu $) 12,277 10,216 3,028 total - 54,277 45,216 3,028 - Profil biaya operasi (Opex) Biaya produksi /tahun (ribu $) 1,981 13,236 20,218 20,510 20,689 17,295 14,430 12,009 9,964 8,235 6,773 Biaya Administrasi/tahun (ribu $) total 738 2,738 14,011 21,013 21,324 21,524 18,151 15,307 12,908 10,885 9,180 7,741

20 EXERCISE PSC CASH FLOW PROFILE Maximum Exposure of negative CF