Focus

Value Creation: The Future of Exploration

25th May 2017

GCA held one of its regular industry seminars on the 18th May and welcomed over 130 senior attendees from the London, European and Global operating, financial and insurance sectors. The theme was “Value Creation in the Current Market” and GCA addressed this from the perspective of three business streams; Exploration, M&A and Gas to Power using its perception of existing drivers and opportunities in the current greenshoot environment. GCA’s extensive understanding of the market conditions and available opportunities, built on over 200 projects a year, was leveraged to feedback a consolidated international view to the audience.

Value Creation: The Future of Exploration

Exploration for hydrocarbons has been a pre-requisite to economic development since the industrial revolution. 

Conventional exploration is under attack.  With the growth of renewables in the energy mix, the slump in oil prices from the end of 2014 and a 'lower for longer' assumption, conventional explorers are employing different survival mechanisms to navigate a demanding environment. 

Reserves Replacement Ratios (RRR) and Reserves to Production Ratios (R/P) appear outdated balance sheet indicators of performance; since 2014, companies are focussed on three major metrics; rate of return, breakeven development costs/barrel and an overall reduction in risk.  There has been a shift away from high cost, complex projects with long lead times towards lower cost, lower risk projects. 

In this talk, GCA's Rebecca Jones, a Senior Geoscience Advisor, examines the key metrics of change from exploration past to exploration future for a number of exploration companies in different basins of the world, and shows how a radical rethink in exploration strategy is enabling conventional explorers to stay in business. 

You can read her presentation below, or download a copy here: 

Value Creation: Through Mergers & Acquisitions

25th May 2017

GCA held one of its regular industry seminars on the 18th May and welcomed over 130 senior attendees from the London, European and Global operating, financial and insurance sectors. The theme was “Value Creation in the Current Market” and GCA addressed this from the perspective of three business streams; Exploration, M&A and Gas to Power using its perception of existing drivers and opportunities in the current greenshoot environment. GCA’s extensive understanding of the market conditions and available opportunities, built on over 200 projects a year, was leveraged to feedback a consolidated international view to the audience.

Value Creation: Through Mergers & Acquistions

GCA has a long established business assisting on Mergers and Acquisitions (M&A) transactions for both buyers and sellers.  The company also has enviable experience in major production licence rounds for National Governments. 

This presentation on Value Creation through M&A distils some of the key lessons learnt over 25+ years of GCA experience in this business sector, focussing on best practice methods and pitfalls for sellers and buyers.  A few public domain examples of real transactions are considered, followed by a look forward to currently emerging areas of M&A activity, namely State Sector divestment, Russia and unconventional offerings outside North America.

You can read the presentation below, or download a copy here: 

Value Creation: Gas to Power - via LNG import or domestic development?

25th May 2017

GCA held one of its regular industry seminars on the 18th May and welcomed over 130 senior attendees from the London, European and Global operating, financial and insurance sectors. The theme was “Value Creation in the Current Market” and GCA addressed this from the perspective of three business streams; Exploration, M&A and Gas to Power using its perception of existing drivers and opportunities in the current greenshoot environment. GCA’s extensive understanding of the market conditions and available opportunities, built on over 200 projects a year, was leveraged to feedback a consolidated international view to the audience.

Value Creation: Gas to Power - via LNG import or domestic development?

“Gas to Power” can mean different things to different stakeholders.  Here at GCA, we like to look at it in terms of delivering sustainable value across the entire gas value chain from the reservoir to the wire, from molecules to megawatts.  In this presentation, Ryan Pereira (Principal Commercial Manager – Global Gas and LNG) gave an overview of changes in the global gas and LNG market, exploring 5 trends that we expect to transform traditional thinking over the next 15 years.  Ryan explored how a combination of factors are still providing an opportunity for LNG imports to be a fuel of choice. 

Mike Wood (Technical Director – Development Planning), balanced this argument by presenting the case for “stranded” gas development through utilisation of indigenous gas for power development. Mike focused on Africa in terms of assessing netbacks for domestic gas versus imports and showed competitiveness of domestic under specific State take principles.  In a range of projects, GCA considers that both domestic and import options have a role to play, but each project requires bespoke consideration. 

You can read their presentation below, download a copy here, or contact the authors directly for further discussion. 

OPEC and Russia Ponder their Next Move; Gas Needs a Bigger Slice

19th May 2017

Drillers added 14 onshore rigs, increasing activity for a 17th week in a row and bringing the total to 878. Onshore rigs now stand at 497 rigs above the same period a year ago.  

Are Bullish Forecasts for African Gas-to-Power Overheated?

16th May 2017

There is a great deal of excitement in the industry at the moment about the prospects for gas to power development in Africa, driven in part by LNG oversupply and resultant lower prices, plus the LNG-to-power initiative in South Africa.  But what lies behind the excitement, what are the hurdles that need to be overcome and where is an increase in gas-to-power likely to happen?

A Bottomless Pit?

12th May 2017

Drillers added 7 onshore rigs, increasing activity for a 17th week in a row and bringing the total to 860. Onshore rigs now stand 478 rigs above the same period a year ago. US shale producers are boosting their drilling budgets, with much of the spending flowing into the Permian Basin

Oil Market Déjà Vu

5th May 2017

Drillers added 4 onshore rigs, increasing activity for a 16th week in a row and bringing the total to 853. Onshore rigs now stand 465 rigs above the same period a year ago. 

Focus on FLNG Capacity and Reserves

4th May 2017

Introduction

A previous GCA Focus article looked at the costs and cost drivers of Floating LNG (FLNG) projects, based on GCA’s database of public domain FLNG scope and cost information. This article uses the same dataset to look at the factors that drive the sizing of current FLNG projects, offers a simple “rule of thumb” first pass sizing approach, and looks at the reasons that sometimes drive project proponents to pursue an alternative sizing.  Finally, we’ll have a look at field production rates and (F)LNG production capacities. Although only five FLNG projects have reached a Final Investment Decision (FID) so far (and only one is currently operating), over 25 projects have been proposed and discussed over the past five years - often in multiple configurations - providing a reasonable starting point for this analysis.