Decision & Risk Analysis

Course Description

Strategic and tactical decisions about your company’s future – lease or company acquisitions, oil and gas field developments, selecting drilling locations, initiating seismic and reservoir studies, R&D investments – are often complex and have highly uncertain outcomes and consequences. Acquiring decision quality in such situations means making properly framed decision with clear alternatives, appropriate information, considered preferences, and impeccable logic. You know quality has been achieved when you have clarity of action. Sometimes clarity of action is obtained immediately, for example, when you are asked whether you would like a free, no-strings-attached $100 bill. However, in most situations in the E&P world we begin with “confusion.” Should we acquire the right to explore a new area with highly uncertain reserves? How much should we be willing to pay for more information? What’s the value of building extra flexibility into a development? Should we continue or terminate a R&D program? How should we balance the corporate portfolio of investments? What share of a risky project is right for our company? What partners should we seek?

Attaining clarity of action in such decisions means engaging in a conversation that is guaranteed to lead to a clear course of action. Decision analysis shapes the conversation, which may be as brief as a mental review of the decision or as extensive as a multi-month process involving many experts and computer models. But the guidance of decision analysis and the goal of clarity remain the same.

The workshop format combines lectures, group work, and individual study. A number of examples and practical decision problems will be addressed – both in the lectures as well as in the practice sessions. Microsoft Excel will be used for many of the examples and exercises.

Workshop participants will find the concepts and techniques stimulating and beneficial - enabling them to apply risk and decision making concepts to their jobs . . . immediately.

Who Should Attend

This workshop provides participants a practical, hands-on approach to modern techniques in petroleum risk management and strategic decision-making. The techniques presented are applicable to all aspects of petroleum exploration and production - prospect evaluation, resource allocation, diversification, risk sharing, and corporate planning. This seminar helps participants develop problem solving, leadership, and functional skills necessary to manage the modern petroleum enterprise. The workshop is designed for anyone involved in asset valuation: executives, managers or technical experts; producers or users of valuations. It is suitable for people with a range of technical experience, from those who have not been exposed to advanced valuation methods to those who may have explored the use of the latest in valuation ideas.