Exploration and Production Accounting - Level 2 - 5 day In-house Training Course
The aim of this training course is to raise to an intermediate level your knowledge and understanding of international E&P finance and accounting. 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
- Enhanceyourknowledgeofaccountingandreportingissuesunique totheE&Pindustry with emphasis on the application of International Financial Reporting Standards (IFRS).
- Improve your understanding of the accounting and reporting of Sales Revenue, Farm In/Farm Out, and Carried Interest.
- Enhance your knowledge of Production Sharing Contacts 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 your awareness of the E&P business activity for which we are accounting and reporting.
Suitability - Who should attend?
This Exploration and Production Accounting - Level 2 training course is suitable for personnel with a good foundation knowledge in exploration and production accounting.
It is strongly recommended that, depending on current level of E&P Accounting knowledge, maximum benefit from this course would be increased by attending our predecessor Level 1 course.
Outcome / Qualification etc.
Participants on this course are eligible for 35 hours of CPD accreditation on completion.
Training Course Content
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 Petroleum 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’ factors and their application.
- Risk Service 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.
Contact MDT International if you would like to arrange this in-house course.
Following this Level 2 course, the next level is Level 3 which introduces more advanced knowledge and techniques.
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