CFA Society Chicago Events

Event Detail

Wall Street Training: Integrated Oil & Gas Financial Modeling (Limited Space)

Date, Time, and Location:
Tuesday, April 10, 2018 (add this event to your Outlook Calendar)
9:00 am - 5:00 pm
The Standard Club, 320 S. Plymouth Court, Chicago, IL  60604   (Driving Directions)

The energy industry impacts everyone in one way or another, from commuters to bottled water consumers. Oil and natural gas are the world’s leading energy supply, with gas stations in every neighborhood fueling cars and trucks that travel millions of miles a day. However, oil’s ubiquity should not be mistaken for simplicity; sound investment decisions require the exploration of the many intricacies within this space. In this abridged version of our full blown oil & gas integrated analysis, we explain the various sectors and subsectors of an E&P company with our short introductory primer to familiarize the concepts and terminology. We then introduce and build a basic, simplified version of our oil & gas integrated model to communicate how one should approach modeling out the key drivers of growth and basic NAV analysis.

Learning Goals:

Oil & Gas Integrated Industry Primer:

  • What is oil & gas? How was oil formed? What are the different worldwide benchmarks?
  • Products that use petroleum; different types of oil (light vs. heavy, sweet vs. sour)
  • Upstream: Onshore & offshore well drilling/pumping; primary, 2ndary & tertiary recovery
  • Downstream: converting unusable crude oil into refined, useable various end products
  • Summary review of refining, distillation and cracking; transportation and petrochemicals
  • Understanding Nelson complexity index for refineries and economics of crack spreads
  • Brief overview of oil & gas taxation and concession vs. production based contracts
  • Financial statements analysis: oil reserves (P1, P2, P3) & expense treatment (SE vs. FC)
  • Operating metrics & ratios: reserves- production, reserve replacement, production curves

Oil & Gas Integrated – Segment Build-up:

  • Build simplified oil & gas model, highlighting the important modeling concepts for oil & gas
  • Upstream segment build-up analysis: project future exploration & production revenue and EBITDA based on oil-equivalent production volume, realized prices, % realized vs. benchmark and other key drivers of growth
  • Downstream segment: project refining capacity, throughput, capacity utilization, gross vs. net refining margins, crack spreads, realized vs. crack spreads to calculate refining & marketing revenue and EBITDA
  • Petrochemicals segment: project volume, product price differentials to derive revenue
  • Roll-up upstream, downstream and petrochemicals segments to start IS projection model

5-Year Income Statement Projection Model:

  • Input historical financial results and recast as necessary for one-time adjustments
  • Incorporate segment build-up as the start of future projection years into IS
  • Calculate historical growth rates & margins which serve as basis for projection assumptions
  • Calculate projected profitability from revenue down to EPS

NAV and PV-10 Valuation Model:

  • Analyze reported proven reserves which serve as the starting point NAV and PV-10 analysis
  • Incorporate production curve projections from larger financial model to project production
  • Estimate realized prices and production costs per barrel past projection period
  • Calculate revenue and costs to derive pre- and post-tax cash flows for NAV and PV-10
  • Include other segments (downstream and petrochemicals) to arrive at estimated TEV

Prerequisite: Intermediate proficiency using Excel and a solid grasp of basic accounting fundamentals is required. This Financial Modeling class is a fast-paced, hands-on, technical workshop.

Bring your PC laptop with Microsoft Excel installed and a working USB port. (Macs with Office 2008 will not be as effective). Laptops will not be provided.

Fee*:
Members - $495
Non-Members - $595
Student Members - $125 (Limited seats available)
*Function tickets cannot be used for this event

CFA Institute Qualified Activity: Eligible for 7 credit hours

Attire: Business Casual

Menu: Lunch Buffet (Vegetarian choices will be available)

Registration: Register online below

Hosted by: Education Advisory Group

Agenda: Class starts promptly at 9:00 am
8:30 am - 9:00 am - Registration
9:00 am - 5:00 pm - Seminar

Instructor: Hamilton Lin, CFA
Hamilton Lin, CFA, Founder & CEO of Wall St. Training, has a broad background in investment banking and mergers and acquisitions. His responsibilities have included analyzing, structuring and negotiating mergers & acquisitions. Lin custom-builds and develops all of the financial and merger models that he uses which have become corporate and departmental standards. Lin has closed over two dozen transactions and has diverse industry experience ranging from oil & gas to insurance to asset management and related sectors.

About Wall St. Training:
Wall St. Training provides professional financial training solutions to Wall Street through hands-on classroom training and customized corporate training programs for financial analysis which take a hands-on, interactive, practical, non-theoretical approach. Wall Street Training's clients include Bank of America/Merrill Lynch, Credit Suisse, Citigroup, Deutsche Bank, Fidelity, GE, Goldman Sachs, JPMorgan, Morgan Stanley, TPG, and many others. For more information: www.wallst-training.com and www.wstselfstudy.com.

*Special Notes Regarding Fees:
Student rate only available to students approved as a Student Member of CFA Society Chicago for 2017-2018. Credit card is required to guarantee ALL reservations, no function tickets accepted. Day-of-event registrations accepted on-site only if applicable and space available. There is a $10 surcharge for walk-ins. Visa, MasterCard, American Express, Discover and Diners Club are accepted. Cancellations accepted until 5:00 pm, April 4th.

Passport Program
Members of any CFA society may attend at the CFA Society Chicago member rate. If you are only a member of CFA Institute, you do not qualify for the Society member rate.

CFA Institute CE Qualified Activity
This program qualifies for credit under the guidelines for the CFA Institute Professional Development Program.

Content shared during CFA Society Chicago programs is not, and nothing in it should be construed as, an offer, invitation or recommendation of any specific financial services company or professional, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, any securities in any jurisdiction. By registering for and attending this event, you acknowledge that any photographs that may be taken are the property of CFA Society Chicago and give your consent to their use in CFA Society Chicago's online and print business communications and marketing.