1 - Introduction & Objectives

1.01 - Introduction (6 min.) Sample Lesson
1.02 - Understanding A&D Objectives (10 min.) Quiz: 1.02 - Understanding A&D Objectives
1.03 - Evaluation Phase (6 min.) Quiz: 1.03 - Evaluation Phase

2 - Acquisition Underwriting

2.01 - Virtual Data Room (VDR) - What To Expect (8 min.) Quiz: 2.01 - Virtual Data Room (VDR) - What To Expect
2.02 - Proved Developed Reserves (PDP) Forecasting (15 min.) Quiz: 2.02 - Proved Developed Reserves (PDP) Forecasting
2.03 - Type Curve Areas (7 min.) Quiz: 2.03 - Type Curve Areas
2.04 - Type Curve Volumes (4 min.) Quiz: 2.04 - Type Curve Volumes
2.05 - Development Planning (9 min.) Quiz: 2.05 - Development Planning
2.06 - Capex & Lease Operating Expense (10 min.) Quiz: 2.06 - Capex & Lease Operating Expense
2.07 - Commercial, Midstream & Marketing (18 min.) Quiz: 2.07 - Commercial, Midstream & Marketing
2.08 - Uncertainty Quantification (9 min.) Quiz: 2.08 - Uncertainty Quantification
2.09 - Synergies & Upside (4 min.) Quiz: 2.09 - Synergies & Upside
2.10 - Qa/Qc (9 min.) Quiz: 2.10 - Qa/Qc

3 - Valuation

3.01 - Price Modeling, Sensitivity , Risk & Accretion/Dilution (15 min.) Quiz: 3.01 - Price Modeling, Sensitivity , Risk & Accretion/Dilution

4 - Divestitures

4.01 - Asset Selection, VDR Data & Sales Case (10 min.) Quiz: 4.01 - Asset Selection, VDR Data & Sales Case
4.02 - Diligence Q&A (7 min.) Quiz: 4.02 - Diligence Q&A

Workflows for Acquisitions and Divestitures / 1 - Introduction & Objectives

Lesson 1.01 - Introduction

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Transcript

01. Lesson 1.01: Introduction 02. Course Outline 03. Introduction: Instructor Bio 04. Course Objective

01. Lesson 1.01: Introduction

Welcome to Acquisitions and Divestitures in Oil and Gas. I'm your instructor, Phil Flores.

02. Course Outline

In this course, you're going to learn how to understand, one, your acquisition and divestiture objectives. Two, Ultimately how to underwrite an acquisition and that's the amalgamation of reservoir engineering, data analysis, corporate finance operations, and all slammed into a 2-week period. So you're gonna have to get comfortable with being uncomfortable. Then understanding kind of the basics of valuation, understanding how to price risk, understanding how all of your, essentially, technical engineering inputs fit into a financial model. And then finally we're gonna kind of look at the flip side of the coin. We're going to look at divestitures. How can you take everything you've learned from acquisitions to prepare a clean, simple sales case? How do you manage buyer questions and answers? And how do you one manage your very limited resources through a very time-demanding process?

03. Introduction: Instructor Bio

My background: I am a reservoir engineer by training. I've been doing business development for the better part of the last 7 years. I have worked for large public companies, small public companies, small private companies, private equity. They all have different goals, and honestly, what you're going to learn here is how all these different goals essentially create the A&D market. What makes sense for one person to sell makes sense for another person to buy. And having seen all these perspectives, it makes it all a lot clearer why this market exists. I have been the technical lead for over $2 billion in asset A&D, I have done over $4 billion in corporate M&A, and over $10 billion in restructuring. So, really seeing it from assets changing hands to buying other companies all the way to bankruptcies and how essentially you take the same technical foundation and work all the way through building these models and understanding how you can do this to reach your goal for be it acquiring, selling, buying another company, how it all fits together.

04. Course Objective

So, when we get down to the objectives of what I would want to really share with everyone in this course. One, just to get a very basic introduction into how the process of A&D works, because it is almost like combining your normal asset management world, replicating that entire process, and cramming it into 2 weeks is the simplest way I can put it. And so if nothing else, please take away that when you think about your everyday job managing an asset for the long-term and all the great work projects that they get put together into managing that asset over months and years. And your ability to perfect managing and running that asset and developing that asset. Now think about cramming that into a 2-week window. And now you need to understand you're going to have to be comfortable being uncomfortable. You have to understand that perfection is going to be your biggest enemy. It will be the greatest enemy of good, or perfection will be your biggest enemy and your goal is to do really good to great work as fast as you possibly can. I would love to give for you to take away the context of how all the engineering, the data analysis, financial modeling, all have to come together in a short period of time for any acquisition or divestiture. I want to establish at least a very simple framework for you to manage your time and resources, because those will be the most limited things. Time is going to be the most limited thing you have. And so when there's 5 assets you could possibly buy, how do you want to manage your time to figure out and prioritize what you want to look at? After that, we're going to talk through some at least basic tips and considerations when you're now underwriting an asset, and especially for the depth under which you're underwriting it, what stage in the evaluation process you're in. We want to talk through considerations for modeling risk and uncertainty, and then how you can think about valuing that risk and uncertainty. Because as everyone knows, a PDP that's been online for 5 years has a lot more certainty in its cash flows than a PUD with a very, very uncertain outcome. And so how do you want to think about compensating yourself for that extra risk. And then we're going to take all of that and basically flip it on its head. And how do you want to manage. Take everything you've learned from the underwriting and acquisition perspective and leverage that in a sales process when you're now the seller, and how do you want to manage that sales process? How do you want to guide potential buyers to see the asset the way you do, given that they may have no exposure to it? And so how do you want to frame that story for them?
So, I'm really excited to share all the tips and tricks, and mistakes that I've learned and made over the last handful of years. And so without any further ado, let's get to it.