Introduction to Oil and Gas Accounting

Course review:

• Profit margin and Growth rate levels
  Financial and operating Leverage Definitions
  Coverage and capital structure ratios
  Common size analysis
  Ratios general limitations
• Identify the users of these financial statements and their needs
• Demonstrate an understanding of the purposes and uses of each statement
• Internal and external Users of financial statements
  Identify and demonstrate an understanding of basic accounting assumptions and conventions, including going concern, historical cost, accrual accounting, and conservatism
• Demonstrate an understanding of recognition and measurement concepts as they relate to revenue, expenses, fixed assets, current assets, current liabilities, longterm liabilities, and equity transactions
• Identify financial statement elements for each of the financial statements
• Identify financial statement information that requires supplemental disclosure in
• The body of the statement or in the footnotes
• Prepare financial statements in the correct format
• Overview on accounting standards(GAAP & IFRS)
• Knowledge of the basic aspects in oil and gas accounting
• Production sharing agreements
• Cost recovery statements and how it is done
• Knowledge about the ERP system design.
• Month end close steps and sequential transactions
• Reporting of month transactionsin reporting system
• Intercompany transactions and mismatch reports
• define operating cycle
• Calculate and interpret accounts receivable turnover and inventory turnover and understand the effects on these ratios of changes in one or more elements in the financial statement
• Calculate and interpret days sales in receivables, days sales in inventory and days purchases in accounts payable
• Demonstrate an understanding of the liquidity of current liabilities
• Calculate and interpret the acid-test (quick) ratio
• Distinguish debt from equity and demonstrate an understanding of the effect on the capital structure and solvency of a company with a change in the composition of debt vs. equity
• Define financial leverage
• Calculate and interpret the financial leverage ratio and identify the effects on these ratios with changes in capital structure

• Demonstrate an understanding of the effect on these capital structure ratios with a change in one or more elements of the financial statement
• Recommend alternative courses of action that could improve the financial ratio “picture” of the company
• Calculate product-line profitability, business unit profitability, and customer profitability given a set of data and assumptions
• Evaluate customers and products on the basis of profitability and identify ways to improve profitability and/or drop unprofitable customers and products
• Define and calculate return on investment (ROI)
• Calculate ROI based on the Dupont Model and describe how this model enhances the analysis of ROI calculations.