DESIGNED FOR

Personnel new to the oil and gas accounting industry, and others desiring to understand or refresh their knowledge of basic petroleum accounting concepts, including bankers or CPAs who have oil and gas clients and other financial personnel needing to understand unique issues as they relate to the petroleum industry. Participants are encouraged to bring their company's financial reports. This course may qualify for up to 34 hours of CPE for US CPAs

ABOUT THE COURSE

Making the most efficient use of your resources is critical to the success of any company. Finance and accounting comprise the universal business language and help you manage those resources effectively. Planning and decision making that occur in an informal financial context permit better application of resources and promote competitive advantage. The aim of this course is to improve delegates’ job performance by enhancing their understanding of current international practices in finance and accounting within the E&P industry. This is achieved through an examination of: (a) accounting standards, policies and practices in the oil and gas industry (b) the accounting and financial management implications of exploring for and producing oil and gas.

An understanding of accounting also allows a company to trace a competitor’s actions from its financial statements and to plan accordingly. These concepts will be presented and reinforced using relevant examples and case studies.

COURSE CONTENT

Getting started: Financial terms and definitions, the language of business; Accounting rules, standards and policies

Constructing the basic financial statements: Data collection and analysis; constructing the basic financial statements; the financial reports; 4 basic statements; cash flow statement, Profit and loss or Income statement, Balance sheet, and Statement of equity and retained earnings; the accounting cycle; special accounting elements including accrual accounting versus cash accounting; tying the statements together

Comparing different accounting elements: Four different sets of accounting books; Identifying and classifying costs – pre-drilling, drilling, development, production and other costs; Full cost, successful efforts and revenue recognition methods of accounting; for oil and gas companies; profits versus cash flows; calculating different methods of depreciation for assets; capital versus operating leases; criteria for capitalization and expense; consolidating subsidiaries of less than 100% ownership; accounting for joint ventures and joint operating agreements (JOA); contractual accounting records such as Production Sharing Agreements (PSA); inventory valuation methods; Disposition of long-term assets (FAS 144)

Sarbanes – Oxley: What compliance means for all personnel; internal controls

Accounting and reporting: Distinguishing between financial accounting and managerial accounting; defining Generally Accepted Accounting Principals of different countries; finding, understanding and incorporating footnotes and other disclosures; special issues in oil and gas accounting (FASB 19); classifying reserves for financial purposes

The latest issues: The role of International Financial Reporting Standards (IFRS) in today’s environment, IFRS 6; COPAS and SORP involvement; intangible drilling costs and their treatment; minority investments, Present Value 10 construction; Standardized Measure of Oil and Gas (SMOG) disclosures (FAS 69 and FRS 3)

Comparative Analysis of Financial Statements: Analyzing the financial statements, common sizing; rate of change; basic ratios; oil and gas industry standards; trends over time