Why Attend
This training course aims to provide the knowledge and skills to analyze and evaluate investment decisions— to distinguish value-creating from value-destroying ventures. Finding energy resources is an uncertain business. Historically, many ventures failed, yet some successful projects also led to business success and significant value creation. Then, what is a good project opportunity?
Instructor-led training that uses interactive learning methods, including class discussion, small group activities, and role-playing
Understand the principles of finance and economic decision analysis in the energy business; Gain skills in effective formulation of investment decisions; Understand the challenges of investment under uncertainty; Gain skills in using analytical tools, including probabilities and decision trees; Apply the knowledge and skills to the analysis of value-creating decisions
Day 1 Analysts working on feasibility analysis of energy projects; Engineers involved in the investment decision process; Managers with responsibility or interest in the investment decision process; Decision-makers within corporations or government bodies; Individuals interested in expanding their skills and knowledge in the field of energy value creation
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Day 1
PRINCIPLES OF CORPORATE FINANCE AND VALUE CREATION
Introduction to Energy Value Chain
Analysis of decision making and corporate objectives
Understanding uncertainty in Energy Projects
Modelling Uncertainty
Using probability to encode uncertainty
Economic Consideration: Informed Analysis for value-creating decisions
Day 2
FROM UNCERTAINTY TO VALUE
Comparative Analysis of Value
Comparisons of Value Across Time
Comparison of value across various levels of uncertainty
Risk vs Uncertainty: Theory and Practice
Principles of Discounted Cash Flow
Day 3
PROJECT CASH FLOWS, UNCERTAINTY, AND RISK
Technical and Market Risks
The Effect of Diversification
Risk-Return Tradeoffs
The Capital Asset Pricing Model (CAPM)
Discounting Risk Premiums
Day 4
PROJECT APPRAISALS
Uncertainty, risk, and financial return at Project and Portfolio Level
Financing Leverage and its Effect
General Investment Analysis, Energy Markets, and Prices
Estimation of the Discount Rate
Introduction to certainty-equivalent approach to investment analysis
Day 5
CHALLENGES IN THE ENERGY LANDSCAPE
Managerial flexibilities and uncertainty
Energy commodities and exchanges, market instruments to hedge risk
Decision trees as a modeling and communications tool
An integrated approach to valuation and analysis of value creation
Future Challenges: environmental issues, emission taxes, and emission markets