Evaluation of Oil & Gas Assets
Evaluation of Oil & Gas Assets
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Valuation Methodologies
Comps Based
Valuation
Multiples Based
Valuation
Precedent
Transactions
Cash Flow
Based Valuation
Discounted Cash
Flow
Leveraged Buy
Out
There can be very wide differences between the results of these different valuation
methodologies. the reasons for these variations can relate to:
quality of reserves (ie. density, sulphur content, water content, etc.)
operating costs
remaining exploration & development costs
distance to market
cost of construction of required infrastructure
time before production can be brought to market
2.
Are the we leaving value on the table when we assess the true potential of an E&P
project?
3.
$/mcfd
$/boe
$/bbl
$/bbl
$/ltr
IOC vs IPM?
Can an Integrated Oil Company approach be used but modified in the form of an
Independent Project Management plan?
Rather than have one company expend energies across functions or even have one company
outsource individual functions to external contractors, would greater value be achieved if
different companies, come together under one single PMO and each is remunerated on the
basis of its value-add proposition
o
Act under a single PMO, with decisions guided solely project considerations
Mitigation
Uganda has completed negotiations with Tullow and partners and expects to sign a MoU
shortly.
Commercial production has been delayed and is not expected until 2016 (2017)
As per energy minister Irene Muloni developing Uganda's oil fields and building the required
infrastructure would cost between $15 billion and $22 billion
Uganda has revised upwards its oil reserves by 85 percent to 6.5 billion barrels after an
appraisal that also showed commercial deposits of natural gas, officials said.
Plans to construct a medium scale domestic refinery and a pipeline connecting to Kenya's
newly-built Indian Ocean port of Lamu to export excess crude.
The refinery is to start with a small processing capacity of 30,000 barrels per day but is
expected to be scaled up and capped at 60,000 barrels.
Description
US$ mm
A reasonably complex medium investment Refinery Atmospheric Distillation Unit ( 30,000 bpd ) 35
would be required in order to align the Product yield Residue Based FCC Unit ( 18000 bpd )
100.0
to the market demand.
including SRU
A relatively small (30-40 Kbpd) but complex Refinery Catalytic Reforming Unit including Naphtha
design is likely to be most economically viable
provided the prices are subjected to competitive Hydro-treating (6000 bpd )
market forces.
Total ( Ex load port )
80.0
215
Strong demand growth for white Products provides an Ocean Freight, Inland Transportation, Taxes, 80
opportunity for potential future increases in Refining Catalyst/Chemicals, Installation and
capacity
Fuel Specifications in Uganda:
Diesel: Sulphur content <5000ppm
Gasoline: Sulphur content 500-1000ppm
Source: WoodMac, KBC, CITAC, HART
295
Feeder Lines
K1
K2
T1
The oil is waxy with a high pour point & requires heating
for transporting through a Pipeline
Feeder Lines: Connects the Crude fields around Lake
Albert to the Head Pump Station
K1 runs parallel to the railway line and existing pipeline
corridor.
K2 is more direct and follows a lower elevation through
the eastern rift valley and merges with Ka 1 beyond
Nairobi.
T1 runs from Hoima to Dar-es-Salaam and is longer than
K pipelines since it requires going around Lake Victoria.
Pumping Stations
100mbd
200mbd
300mbd
100mbd
200mbd
300mbd
K1
1247
18
22
26
K2
1229
18
22
24
1586
18
22
24
100mbd
200mbd
300mbd
Feeder Lines
150
428
495
K1
2530
3058
3423
K2
2371
2960
3300
3007
3666
3997