Business of Energy

Business of Energy

  • Congratulations to Dr John Barker

    Congratulations to Dr John Barker

    26th June 2017

    GCA would like to congratulate Dr John Barker, winner of the 2017 Society of Petroleum Engineers (SPE's) North Sea Regional Award for Reservoir Description and Dynamics.  

    All your friends and colleagues here at GCA are delighted for you and proud of this deserved recognition.  

    The SPE's wide-ranging interview with Dr Barker (who is GCA's Technical Director for Reservoir Engineering) can be be found on page 10 of the June 2017 edition of SPE London Section Review

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  • Value Creation in the Current Market

    Value Creation in the Current Market

    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” which GCA addressed 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.

    The abstracts and  presentations are available to view or download using the links above. 

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  • Value Creation: The Future of Exploration

    Value Creation: The Future of Exploration

    25th May 2017

    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    Reserves Replacement Ratios (RRR) and Reserves to Production Ratios (R/P) appear outdated balance sheet indicators of performance; since 2014, companies are focussed on three major metrics; rate of return, breakeven development costs/barrel and an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

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  • Value Creation: Through Mergers & Acquisitions

    Value Creation: Through Mergers & Acquisitions

    25th May 2017

    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

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

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

    25th May 2017

    “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. 

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  • Value Creation in the Current Market: GCA London Seminar, Thursday 18th May, 2017

    Value Creation in the Current Market: GCA London Seminar, Thursday 18th May, 2017

    20th April 2017

    Gaffney, Cline & Associates will be holding their next industry seminar on Thursday, 18th May, 2017 in London.  The overall theme of the seminar will be: "Value Creation in the Current Market".

    There will be three presentations, each addressing different routes to value creation, so that there will be something of interest for everyone. 

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  • Power Africa

    11th January 2017

    GCA is pleased and proud to have participated in the US Department of Energy’s Power Africa initiative. 

    The Energy Power initiative’s latest collaborative publication, “Understanding Natural Gas and LNG Options” was launched in Nairobi, Kenya in December, 2016.  This is a detailed guide to developing gas resources in Africa, especially via LNG, and also emphasizes the increasing importance of LNG imports across the continent, with a focus on gas/LNG to power, with the wave of FSRU/FLNG type projects under consideration. 

    GCA’s Nicholas J. Fulford, Global Head of Gas & LNG was a key contributor to the book and is pleased it is now available to a wide audience of decision makers in this important arena.  

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  • Experts in the Business of Energy (English)

    Experts in the Business of Energy (English)

    1st December 2016

    For over 50 years, Gaffney, Cline & Associates' involvement in projects has spanned the entire oil and gas industry lifecycle; upstream, midstream and dowstream.

    The list of Gaffney, Cline & Associates' clients is equally diverse and includes major and independent oil companies, national oil companies, government ministries and lending/investment institutions.  

    To download this brochure as a PDF please click here or in the sidebar below (276KB).

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  • The Necessity of a Holistic View for Asset Evaluation

    The Necessity of a Holistic View for Asset Evaluation

    26th October 2016

    GCA's Drew Powell had an article on an 'Holistic View for Asset Evaluation' published in the October 2016 SPE Review.  The article is re-produced below, or you can download the original version here.

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  • Project Investment Risk Management

    Project Investment Risk Management

    24th October 2016

    GCA understands and has developed the processes needed to identify and manage the business plan risks associated with common project issues. We offer an independent structured approach as well as a depth of technical expertise combined with global experience that is unmatched by any other company. GCA is able to use that experience and expertise to evaluate and manage any business plan through the investment life cycle and value chain from acquisition and appraisal through evaluation to concept definition and ultimately execution.

    To download this brochure as a PDF please click here or in the sidebar below (919KB).

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  • The Power of the Customer: the New Byword for LNG

    The Power of the Customer: the New Byword for LNG

    6th October 2016

    Continuing their long relationship with the Petroleum Institute of Thailand (PTIT), GCA is pleased to share this special article published in the June edition of PTIT Focus.  It was written by our own Nick Fulford and Ryan Pereira of GCA's Gas & LNG Team.

    You can view the full article on the Petroleum Institute of Thailand website here, or download a copy of the article here.

    Further related articles are planned so keep following the activities of both PTIT and also GCA's busy Gas & LNG team.  Several more of GCA's Gas & LNG articles are available through the "More Insight" links to the right of this page. 

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  • Mexico - A Pathway to the Prize?

    Mexico - A Pathway to the Prize?

    24th August 2016

    Ever since the announcement of the 2013 Reforma Energética in Mexico, the international energy industry has held its collective breath for the opportunity to invest in the so called “Pemex Farmouts”.  This article explains the challenges that the process has faced, and offers some suggestions to try and help PEMEX, and the regulators involved in the process (Secretaria de Energía (SENER), Comisión Nacional de Hidrocarburos (CNH), Secretariat de Hacienda y Crédito Público (SHCP) forge a path forward. 

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  • Mature Fields Optimisation

    Mature Fields Optimisation

    16th August 2016

    There are many angles to be considered when describing a field as mature. An oil field can be considered as mature when its production rate has significantly declined and/ or when it is close to reaching its economic limit. A field might also be considered mature when it has been in production for many years and has depleted its primary and secondary recovery. Consequently, facilities and technology at mature fields could be old. However, far from being diminishing assets, these mature fields offer one of our most important opportunities to extract further oil and gas resources to meet future energy demands.

    GCA recognises through direct and extensive experience the typical needs of mature fields and the significance of fit for purpose models and technically appropriate solutions for such fields.

    To download this brochure as a PDF please click here or in the sidebar below (541KB).

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  • I know what Reserves are, but what are Contingent and Prospective Resources?

    I know what Reserves are, but what are Contingent and Prospective Resources?

    29th July 2016

    Before answering that question, are you sure you know what Reserves are?  People have been arguing about that for decades, and have yet to reach complete agreement on a definition.  Part of the problem is that estimates of Reserves and Resources are required for various different purposes, including company management, raising finance (either publicly or privately), national planning and more.  Finding a single definition that is fit for all these purposes is not straightforward.

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  • Focus on Valuation of Assets Moves From Exploration Upside to Mature Asset Cash Flow

    Focus on Valuation of Assets Moves From Exploration Upside to Mature Asset Cash Flow

    8th July 2016

    The Acquisition and Divestment (A&D) market has changed. Previously, exploration and discovery upside was sought after with new development potential or undeveloped acreage firmly part of the transactional value expectation. 

    However the A&D market has moved, with value now focussed on mature, developed assets that bring instant cashflow. With the change in focus, the due diligence of assets for a potential transaction also requires modification, with the focus now being on enhancement and improvement of current operations, and as such, asset due diligence now requires far more detailed consideration of the surface facilities, costs and abandonment liabilities. 

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  • Reserves and Resources Estimation

    Reserves and Resources Estimation

    7th July 2016

    Gaffney, Cline & Associates (GCA) is a global consultancy that has been offering technical, commercial, and strategic advice to the oil and gas sector for more than 50 years. GCA is well known as one of the leading suppliers of Reserves and Resources assessments, which are required for many purposes including statutory reporting, stock exchange listing, development planning,project finance, and asset valuation.  GCA has undertaken many thousands of Reserves and Resources assessments covering all types of reservoirs and hydrocarbons and all the world's major petroleum basins.  To illustrate the breadth and depth of GCA's work, brief summaries of some projects recently undertaken by GCA have been provided in the following pages.

    Read on, or download a copy of the brochure, here

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  • The Impact of Commodity Prices on the E&P Sector: Reserves Write Downs and Impairments

    The Impact of Commodity Prices on the E&P Sector: Reserves Write Downs and Impairments

    24th June 2016

    In previous articles this week, GCA has discussed the impact of commodity prices on the project CAPEX cycle and also on the mechanisms involved in Reserves and Resource estimation and reporting. This final article looks at the empirical impact of commodity prices on actual oil company reporting.

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  • The Impact of Commodity Prices on the E&P Sector: Reserves and Resources Reporting

    The Impact of Commodity Prices on the E&P Sector: Reserves and Resources Reporting

    22nd June 2016

    This is the second of three articles originating with GCA's "The Impact of Lower Commodity Prices on the E&P Sector" event, held in May 2016 at the Royal Institution. 

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  • The Impact of Commodity Prices on the E&P Sector:  Project Costs

    The Impact of Commodity Prices on the E&P Sector:  Project Costs

    20th June 2016

    In a series of three articles this week, GCA will present a summary of the presentations given at its recent event held at the Royal Institution, entitled: "The Impact of Lower Commodity Prices on the E&P Sector". Over 120 people attended and more wished to but were unable due to space limitations and a transport emergency in London.  This article is for all those interested parties who were unable to make it to the live event.  Do contact article authors if you wish to pursue any of these subjects further. 

    The three articles in turn will consider: 

    - The Impact of Lower Commodity Prices on the E&P Sector: Project Costs

    - The Impact of Lower Commodity Prices on the E&P Sector: Reserves and Resources Reporting

    - The Impact of Lower Commodity Prices on the E&P Sector: Reserves Write Downs and Impairments.

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  • The Competent Person’s Report

    The Competent Person’s Report

    11th May 2016

    A Competent Person’s Report (CPR) is an independent technical report on the oil and gas assets (or mineral assets) of a company.  It is normally required for an Initial Public Offering (IPO) in the oil and gas (or mineral mining) sector and for other material transactions such as mergers, acquisitions and takeovers involving a listed company in this sector.  While the term CPR is used for the London Stock Exchange (LSE) and other European exchanges, other terms such as Qualified Person’s Report or Technical Expert’s Report may be used for such a report elsewhere in the world.

    The aim of a CPR is to provide a responsible, unbiased and independent opinion on the technical aspects of the company, with the ultimate purpose of informing and protecting investors. 

    This article discusses the Competent Person’s Report and its preparation, particularly in the context of the London Stock Exchange.  

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  • Field Unitisation & Redetermination

    10th May 2016

    Field Unitisation and Redetermination (U&R) can be a time consuming and costly activity for any company involved in the process.  U&R requires specialist skills and experience that may not be readily available within the company. These issues can be managed by appropriate planning and training, and by the use of teams skilled and experienced in Technical and Commercial U&R Matters. 

    Read below for more on how GCA's unrivalled understanding of the U&R process can work for your company or download a copy here.

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  • Reserves and Resources Reporting: Seminar for Financial and Legal Advisors

    3rd May 2016

    GCA is pleased to offer its extensive experience in hydrocarbon reserves/resource evaluation and reporting through focussed Seminars specifically tailored to the requirements of Financial and Legal Service Providers.

    Estimates of hydrocarbon volumes, commonly reported as reserves and/or resources are often the basis for project financing, financial forecasting and portfolio management, as well as the basis for assessing the value of a company. Volumes also play a role in unitisation and redetermination of assets that straddle boundaries between production licences. Legal disputes may also arise as a result of contracts that make reference to reserves and resources volumes.

    We are able to tailor our seminars for audiences of different disciplines, backgrounds and levels of experience. All of the seminars include actual experience including case studies to enhance the training process.

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  • Due Diligence for Asset or Corporate Acquisition and Project Finance

    Due Diligence for Asset or Corporate Acquisition and Project Finance

    1st May 2016

    GCA's analysis provides our clients reduced risk for investment decisions.  

    GCA's personnel bring extensive experience in the petroleum industry, gained from numerous projects around the world, to every assignment. The diverse backgrounds of our people include employment with international and national oil companies and major consulting and contracting firms. This diversity, breadth and depth of expertise and experience enhances our capability and reputation in providing consistent, high quality, impartial, technically sound and commercially astute advice.

    To download this brochure as a PDF please click here or in the sidebar below (469KB).

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  • New role for GCA in the Singapore Exchange

    29th April 2016

    GCA can report that  Mr Doug Peacock (a Technical Director) has recently taken up a role as  a member of the Singapore Exchange (SGX) Mineral, Oil and Gas Working Group. This follows the retirement of his colleague, Mr Tony Harrison.  The purpose of the group is to review the listing rules of the Singapore Exchange Securities Trading Limited (SGX-ST) relating to the mineral, oil and gas (MOG) industry. The working group comprises of MOG specialists from various sectors, including listed issuers, technical experts and corporate finance advisers. The working group will meet quarterly over the course of this year and will examine the listing rules holistically, with a view to benchmarking against international standards, and will incorporate feedback from industry participants on potential areas for improvement.

    GCA is proud to continue to serve as  a participant in such an important endeavour.

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  • Experts in the Business of Energy (Mandarin 能源领域的专家)

    Experts in the Business of Energy (Mandarin 能源领域的专家)

    22nd April 2016

    For over 50 years, Gaffney, Cline & Associates' involvement in projects has spanned the entire oil and gas industry lifecycle; upstream, midstream and downstream.

    The list of Gaffney, Cline & Associates' clients is equally diverse and includes major and independent oil companies, national oil companies, government ministries and lending/investment institutions.

    Read on for more information or to download this brochure as a pdf please click here or in the sidebar (1.4 MB).

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  • Mergers & Acquisitions

    Mergers & Acquisitions

    22nd April 2016

    Gaffney, Cline & Associates  can assist throughout the Mergers and Acquisitions Process, with Strategy and Portfolio Management, Technical and Commercial Assurance and with Valuation, Negotiation and Bidding.  GCA's contribution is explained below, along with some examples of our recent project work in this field.  Please download a copy of the summary here, or read on for more information.

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  • Reserves and Resources Reporting: Seminars for Exploration and Production Companies

    20th April 2016

    GCA's extensive experience in hydrocarbon reserves/resource evaluation and reporting is offered through dedicated seminars specifically tailored to the requirements of Exploration and Production Companies.

    Two seminars are offered, a short ‘Introduction to Reserves and Resources’ and a longer ‘Practical Estimation of Reserves and Resources’. Each will give attendees an understanding of all the basic concepts associated with the definition, evaluation and reporting of reserves and resources, with an option to extend into practice. The seminars can be tailored to the client's particular requirements and are designed to add value and understanding to all experience levels who are involved in the process of reserves and resources reporting or those who would benefit from an enhanced understanding of the process.

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  • Unitization and Redetermination - a Petroleum Industry Seminar

    13th April 2016

    The aim of the seminar is to provide attendees with an understanding of the methodologies used to determine equity participation in hydrocarbon reservoirs, both at the initial unitization stage and during any subsequent redetermination exercises. The interdisciplinary nature of field unitization, which can involve geoscientists, engineers, administrators, lawyers and accountants is primarily technical in the determination of equity but by its nature the outcome is commercial.

    The seminar will complement industry best practice, offer appropriate examples and incorporate the client's data and requests.

    Follow this link to download the seminar flyer (115KB) or read more below. 

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  • UK Taxation on Oil and Gas Extraction is Cut Again, but Remains Volatile

    UK Taxation on Oil and Gas Extraction is Cut Again, but Remains Volatile

    17th March 2016

    The UK Treasury’s announcement in the 2016 budget of abolishing much of Petroleum Revenue Tax (PRT) and reducing the Supplementary Charge from 20% to 10% will be a welcome relief to many Oil and Gas companies. However, it does little to reassure investors who have witnessed over the last 25 years the frequent tweaking of taxation in response to the rise and fall of oil price, which has created a legacy of uncertainty in the UK fiscal regime. 

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  • No Need to Cry For Thee, Argentina

    No Need to Cry For Thee, Argentina

    18th February 2016

    With oil priced at US$67.60 per barrel, natural gas at US$7.50 per MMBTU, and a rig count that has been going up over the past five years, it may be tempting to think that you have just stumbled across an old article.  However, this is very much 2016 Argentina, and with a new market-oriented government just installed, you would also be thinking that seats on the flights to EZE would be getting hard to come by!

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  • Borrowing Base Redeterminations and Impairments: Wait…See…and Then What?

    Borrowing Base Redeterminations and Impairments: Wait…See…and Then What?

    14th December 2015

    Two topics have had more than their usual shares of attention this year: Redeterminations and Impairments.  2016 seems set to be even more challenging for both.

    Redeterminations and Impairments are two different things, governed by separate standards and requirements.

    • Redeterminations are commercially driven and follow discretionary criteria established by lenders.

    • Impairments are standard driven and follow international accounting rules and country specific regulatory reporting requirements.

    While impacted by the same driver, current hydrocarbon prices are not the only factor that affects Redeterminations and Impairments.   This article looks at the degree to which judgment can influence Redetermination and Impairment decisions and the impact these decisions may have on future industry activity.

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  • Practical Options for Natural Gas Monetisation

    Practical Options for Natural Gas Monetisation

    12th July 2015

    A New Study by Gaffney, Cline & Associates

    Natural gas is predicted to have a bright future. As the fastest growing fossil fuel almost US$9 trillion is expected to be invested by 2035 in providing future supplies of natural gas.

    However, the monetisation of natural gas discoveries can still present a very diverse, and sometimes difficult, set of challenges for resource owners.  Technological developments potentially offer new solutions for monetising gas fields while markets for natural gas and its products continue to evolve with volatile prices observed.  Recent downward trends in energy prices may lead to limitations on capital expenditures on gas projects as companies focus on high-return projects with rapid paybacks.

    Against this competitive background GCA presents its new multi-client study "Practical Options For Natural Gas Monetisation".  This study identifies, discusses and compares the relative merits and risks of gas monetisation options and provides a methodology for the identification of the optimal monetisation route.

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  • Preparing for a New Battlefield in the Global Oil and Gas Market

    Preparing for a New Battlefield in the Global Oil and Gas Market

    20th May 2015

    20th May 2015

    In May 2015, GCA hosted an event at the Royal Institution on "Acquisitions, Divestitures and Restructurings in a Difficult Market".

    At the event Eraj Weerasinghe, Ernst & Young, gave a presentation called "Preparing for a New Battlefield in the Global Oil and Gas Market".

    You can download the presentation here as a pdf (2MB), or view the full presentation by clicking below.

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  • Case Studies in Portfolio Management

    Case Studies in Portfolio Management

    20th May 2015

    20th May 2015

    In May 2015, GCA hosted an event at the Royal Institution on "Acquisitions, Divestitures and Restructurings in a Difficult Market".

    At the event Ricardo Barreto gave a presentation called "Case Studies in Portfolio Management".

    You can download the presentation here as a pdf (736KB), or view the full presentation by clicking below.

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  • The Oil Price Crash: Opportunities to Transform Portfolios in 2015 and Latest Trends in M&A Markets

    The Oil Price Crash: Opportunities to Transform Portfolios in 2015 and Latest Trends in M&A Markets

    20th May 2015

    20th May 2015

    In May 2015, GCA hosted an event at the Royal Institution on "Acquisitions, Divestitures and Restructurings in a Difficult Market".

    At the event Chris Rachwal gave a presentation called "The Oil Price Crash: Opportunities to Transform Portfolios in 2015 and Latest Trends in M&A Markets".

    You can download the presentation here as a pdf (931KB), or view the full presentation by clicking below.

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  • Is it Safe to go Back in the Water?

    Is it Safe to go Back in the Water?

    20th May 2015

    20th May 2015

    In May 2015, GCA hosted an event at the Royal Institution on "Acquisitions, Divestitures and Restructurings in a Difficult Market".

    At the event Mike Cline gave a presentation called "Is it Safe to go Back in the Water?".

    You can download the presentation here as a pdf (868KB), or view the full presentation by clicking below.

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  • Unlocking Value in the UK North Sea

    Unlocking Value in the UK North Sea

    19th May 2015

    In times of low oil price and rising costs, the North Sea can’t escape the doom and gloom headlines. Drilling activity is grinding to a halt and operators are trimming their waistlines with reduced capital spending and workforce down sizes. In this climate could anyone really argue with the savvy investor looking to invest in other more promising regions around the globe? Yes, the North Sea has problems, but the size of the remaining prize is still considerable. There are 7,100 million barrels of oil plus gas equivalent of reserves and resources currently under production or about to be developed (WoodMac). This is almost 20% of what has already been recovered and doesn’t include the potential development of new discoveries or previously uncommercial accumulations. The question is not whether there is value in the UK North Sea, but rather how can this value be unlocked?

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  • Groundhog Day or Something New?

    Groundhog Day or Something New?

    6th May 2015

    As we have been reminded in the most dramatic fashion in the last nine months, the petroleum industry is cyclical, unpredictable and capable of rapid, value-destroying downturns.  While these kinds of events tend to have their own harbingers and seemingly unique characters, similarities can be observed and comparing past events to the current situation may offer some useful insights.  Two historic events seem particularly useful as analogues: the price crash of 2008 and, more distantly, the price drop and related events beginning in the mid-1980s.  Looking back to these earlier events and comparing them with the current situation can be both informative and useful, as we endeavour to answer the question of whether we are experiencing a downturn very much like other downturns, or whether this is something new altogether.

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  • Weathering the Storm - 2014-2015 Oil Price Crash Impact on the E&P Industry

    Weathering the Storm - 2014-2015 Oil Price Crash Impact on the E&P Industry

    26th March 2015

    The past ten years have seen immense change in the petroleum industry.  Oil price has risen at 12% p.a., but global production has grown at only 1% p.a.  In North America however over the past five years, technology breakthroughs have driven production to grow by 9% p.a.  A phenomenon initiated in 2004 when Continental Resources completed the first commercially successful “fracked” well in North Dakota in shale. In 2009, oil prices reached breakeven levels for unconventionals in the US and domestic operators were able to “surf this wave” and bring US production back up to heights not seen for 25 years.  Whilst over many years we have become accustomed to Saudi Arabia acting as a swing producer for OPEC, today, oil production from US unconventionals represents around five times the flow rate that Saudi Arabia would normally use to control the market and prices.

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  • Being Proactive on Reserves Write-Downs and Impairments

    Being Proactive on Reserves Write-Downs and Impairments

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event John Barker gave a presentation on "Being Proactive on Reserves Write-Downs and Impairments".  

    You can download the presentation here as a pdf (513KB), or view the full presentation by clicking below.

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  • Unlocking Value in the UKCS

    Unlocking Value in the UKCS

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event Séadhna Wilson gave a presentation on "Unlocking Value in the UKCS".  

    You can download the presentation here as a pdf (853KB), or view the full presentation by clicking below.

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  • The Impact of the Oil Price Crash on the E&P Industry

    The Impact of the Oil Price Crash on the E&P Industry

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event Ricardo Barreto gave a presentation on "The Impact of the Oil Price Crash on the E&P Industry".  

    You can download the presentation here as a pdf (598KB), or view the full presentation by clicking below.

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  • Crude Oil Price Overview

    Crude Oil Price Overview

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event Mike Cline gave an overview presentation of the crude oil price.  

    You can download the presentation here as a pdf (360 KB), or view the full presentation by clicking below.

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  • The Oil Price Crash: Is this Groundhog Day or Something New and Different?

    The Oil Price Crash: Is this Groundhog Day or Something New and Different?

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event Mike Cline gave a presentation on "The Oil Price Crash: Is this Groundhog Day or Something New and Different?".  

    You can download the presentation here as a pdf (1MB), or view the full presentation by clicking below.

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  • Current Challenges in Impairment Testing

    Current Challenges in Impairment Testing

    25th February 2015

    In February 2015, GCA hosted an event at the Royal Institution on "Dealing with Crude Behavior: Pitfalls and Opportunities".

    At the event Eraj Weerasinghe of EY gave a presentation on "Current Challenges in Impairment Testing".  

    You can download the presentation here as a pdf (737KB), or view the full presentation by clicking below.

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  • Oil Price Crash to Have 2 Million Barrels per Day Impact in US?

    Oil Price Crash to Have 2 Million Barrels per Day Impact in US?

    9th February 2015

    Analysis undertaken by GCA suggests that the current, and continued projected, fall in rig count may have as much as a 2 million barrels per day impact on US unconventional oil production.

    Such a bold headline may seem to fly in the face of forecasts by other industry commentators and analysts.  Indeed, the latest EIA forecast continues to show production growth through 2015 and 2016.

    So, has GCA come to a different conclusion?  Actually, no. 

    The analysis undertaken by GCA, focusing on the Bakken as an example for the whole of the US, confirms the potential for continued modest growth in production, although it also shows that, depending upon assumptions, many different credible “forecasts” are possible.  It does show a big impact on production by the end of 2016, though – when compared to what production was likely to have been if there had been no oil price crash and the rig count had continued at previous levels.

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  • Geopolitical Scenarios in a Post-OPEC World

    Geopolitical Scenarios in a Post-OPEC World

    6th February 2015

    The continuing fall in oil prices over recent weeks supports the view that markets could remain comparatively weak for 2015 as a whole, with prices trading in a relatively narrow range around the $50 per barrel mark.  Such an outcome would reduce OPEC revenues by more than $500 billion p.a. or 15% of GDP [1], while conferring an economic “dividend” to the major importers, OECD, China and India, equal to almost 1% of their aggregate GDP.  While a wealth transfer on this scale has superficial attractions for the global economy, the scale of economic contraction facing producers could herald a fundamental re-alignment within the oil exporting community in which a more active Russian articipation could have disturbing longer term geopolitical consequences.

    The fundamental policy differences that were exposed at OPEC’s November conference appear likely to become more entrenched in 2015 as supply pressures grow and translate into a sharp economic slowdown across all 12 member states.  OPEC’s political polarisation, between the four GCC [2] members and the remaining eight led by Iran and Venezuela, suggests that efforts to co-ordinate production and restore pricing power will fail without the participation of the non-OPEC oil exporting community.  While treaty obligations would probably preclude the three OECD exporters, Norway, Canada and Mexico, from engagement with OPEC in policy “co-ordination”, the economic interests of other non-OPEC exporters, including Russia, Kazakhstan and Azerbaijan are more closely aligned with those of some OPEC nations.  This paper assesses the prospects for wider co-ordination among these exporters and the potential geopolitical ramifications of such an outcome in what, effectively, would be a post-OPEC world as we have known it for more than 50 years.  

    Barry Aling is a director of City of London Investment Group plc.  During his 40-year career he has worked extensively in international capital markets, including Phillips & Drew, W.I. Carr and Swiss Bank Corporation and is a former director of Gaffney Cline & Associates and Asset Management Investment Company plc.  The views expressed here are entirely his own.  

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  • Pain Likely in 2015, But Deep Water GOM Should Be Better Placed Than Unconventional

    Pain Likely in 2015, But Deep Water GOM Should Be Better Placed Than Unconventional

    13th December 2014

    Significantly reduced cash flow for companies in 2015 means that reprioritizing spending is inevitable.  In the short term there is not always the flexibility to make decisions based solely on fundamentals, and so the first impacts may well include projects that in the long run remain viable.  As a high cost environment, the deep water Gulf of Mexico (GOM) would appear to be vulnerable and, indeed, cuts should be expected there. 

    However, economic analysis carried out by Gaffney, Cline & Associates (GCA) suggests that good projects in that environment can still be viable down to US$60 per barrel.  Further, economic rationality would suggest that where the opportunity exists, onshore shale spending would be a better short-term target for capital deferral because operating flexibility allows any adjustments made there to be reversed in equally quick order.  That is not the case in the deep water GOM where it is tomorrow’s expected price that is the key driver, and where deferral now may mean missing out on gains later. 

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  • The Wood Review: Welcome Step Forward But Is It Enough?

    The Wood Review: Welcome Step Forward But Is It Enough?

    2nd December 2014

    On 10th July 2013, Edward Davey MP, UK Secretary of State for Energy and Climate Change, announced a review of UK offshore oil and gas recovery and its regulation.  The review was led by Sir Ian Wood.  The final report was published on 24th February 2014 with its findings being largely welcomed by the industry and enthusiastically adopted by government.

    Based on the Wood Review, and upon information published by DECC, industry experience and observations of recent trends and developments within the industry, GCA has reviewed the prognosis for the UK North Sea.  

    From this review GCA has concluded that, despite the warm welcome, there is a significant risk that the major focus on the new Regulator will distract attention from the more fundamental and urgent needs and as a result, the Wood Review alone may not be sufficient.  

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  • The Wood Review: Necessary, but Sufficient?

    The Wood Review: Necessary, but Sufficient?

    25th November 2014

    On 25th November 2014, Charles Goedhals of GCA participated in the SPE London Evening Programme where he gave a presentation on the recent Wood Review.

    You can download the presentation here as a pdf (631KB), or view the full presentation by clicking below.

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  • Have Oil Prices Passed Their All-Time Peak?

    Have Oil Prices Passed Their All-Time Peak?

    17th November 2014

    This is the third in a series of energy business insights commissioned by GCA from independent author and energy finance expert Barry Aling.  In it he looks at the post 1970s history of oil price and the drivers behind it and examines in detail the relative pressures and trends in supply and demand that shape the oil price trend and in particular those that are driving the recent large shifts in pricing across the world.  With the landscape of supply and demand history established, Barry takes a look forward towards long term trends and the changing role of OPEC producers and examines what the future might hold for the OPEC partnership, US Shale oil and the forward price of oil.

    Barry Aling is a director of City of London Investment Group plc.  During his 40-year career he has worked extensively in international capital markets, including Phillips & Drew, W.I. Carr and Swiss Bank Corporation and is a former director of Gaffney Cline & Associates and Asset Management Investment Company plc.  The views expressed here are entirely his own.  

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  • Oil Price and The U.S. Unconventional Boom

    Oil Price and The U.S. Unconventional Boom

    28th October 2014

    With Brent having drifted down almost to U.S.$80/Bbl recently, what impact is this likely to have on drilling activity in the unconventional plays in the United States, in particular?  Certainly, unconventional resources are expensive to produce and require growing production to fund the “treadmill” development requirements.  GCA has examined the numbers for the Eagle Ford and concludes that while better performing companies would still appear to be above the economic threshold for much of what they do, others are certainly likely to feel the pinch.  However, there are many factors that will drive short-term activity beyond just oil price, and perhaps it will be the medium-term before a trend based on fundamentals starts to emerge, by which time the dynamics of the situation may have changed again anyway.  

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  • Assessing the Commerciality of Mature UKCS Oilfields

    Assessing the Commerciality of Mature UKCS Oilfields

    15th October 2014

    On 15th October 2014, GCA hosted a workshop at the Institute of Directors in London on the subject of "The Future of the UK Hydrocarbon Sector".

    This presentation was given by GCA's Mike Wood at the event.

    You can download the presentation here as a pdf (806KB), or view the full presentation by clicking below.

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  • UKCS Trends, The Wood Report & Fiscal Environment

    UKCS Trends, The Wood Report & Fiscal Environment

    15th October 2014

    On 15th October 2014, GCA hosted a workshop at the Institute of Directors in London on the subject of "The Future of the UK Hydrocarbon Sector".

    This presentation was given by GCA's Chris Rachwal at the event.

    You can download the presentation here as a pdf (1MB), or view the full presentation by clicking below.

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  • UK Energy Policy - Far-Sighted or Misguided?

    UK Energy Policy - Far-Sighted or Misguided?

    15th October 2014

    On 15th October 2014, GCA hosted a workshop at the Institute of Directors in London on the subject of "The Future of the UK Hydrocarbon Sector".

    This presentation was given by GCA guest speaker Barry Aling at the event.

    You can download the presentation here as a pdf (574KB), or view the full presentation by clicking below.

    Read the full article on UK Energy Policy - Far-Sighted or Misguided here.

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  • Upside View of UKCS

    Upside View of UKCS

    15th October 2014

    On 15th October 2014, GCA hosted a workshop at the Institute of Directors in London on the subject of "The Future of the UK Hydrocarbon Sector".

    This presentation was given by GCA's Chris Rachwal at the event.

    You can download the presentation here as a pdf (755KB), or view the full presentation by clicking below.

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  • UK Energy Policy - Far-Sighted or Misguided?

    UK Energy Policy - Far-Sighted or Misguided?

    25th June 2014

    The 2008 Energy Act re-calibrated UK energy policy from cost and security of supply priorities toward a low-carbon future by re-configuring the electricity generating infrastructure.  However, it is only recently that the full cost implications of this far-reaching policy change are becoming apparent.  In essence, low-carbon electricity supplies are only sustainable economically through a complex architecture of subsidies which impose minimum prices for renewable and nuclear-sourced energy that could increase overall electricity prices by up to 75% in real terms over the next 11 years.  Viewed from this perspective, it is clear that UK government policy is a key driver in electricity pricing and will become more so in the coming decade. Guest author Barry Aling presents an opinion on current policy and its implications from the perspective of ensuring UK industrial competitiveness and minimizing future energy costs.

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