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petroEDGE

WELL COSTING
31 May – 1 June 2012, Kuala Lumpur

Your Expert Trainer: James Halluk


James has worked in more than 23 different countries on four continents
around the world from the Middle East, North Africa, Mekong Delta, U.K., Russia
and Kazakhstan.

www.petroedgeasia.net
Well Costing
31 May – 1 June 2012, Kuala Lumpur

About this training course


Among all the activities in field development, drilling and well development could rank as one of
the most expensive and riskiest ventures. The cost of drilling a well is constantly being reviewed
and contested in the industry today due to the lack of easier on-shore or shallow water
opportunities. Combined with the high costs in the exploration process, fluctuating price of oil and
increased demand for drilling contractors and technology, costs have spiralled upwards in the past
few years.

With deepwater drilling rig rates in 2011 of around $420,000/day, and similar additional spread
costs, a deepwater well of duration of 100 days can cost around US$100 million. With high
performance jack-up rig rates in 2011 of around $150,000, and similar service costs, a high
pressure, high temperature well of duration 100 days can cost about US$30 million.

With such high cost considerations at play during the well planning and drilling phases, drilling
engineers and accountants must generate accurate and efficient cost estimates for their operations
throughout the life of a well. This 2 day targeted training course will explore in detail the various
issues and challenges in developing clear and concise planning and budget reports for well
development and drilling.

By attending this 2 day training course, you will be able to:


 Understand how to manage and control well development and drilling costs through various
reporting and reconciliation methods
 Examine the purpose and role in risk management when increasing operation efficiency and
safety together
 Learn and Improve the creation of AFE’s (Authority for Expenditure) for more accurate
budgeting
 Understand and produce accurate capital and operational expenditure reports for asset owners
and project partners
 Examine the process of managing inventory and methods for reporting
 Ensure appropriate levels of governance in the accounting and reporting process to instil
confidence of asset owners and partners

Who Should Attend?


The following executives from Upstream organisations will find this training course useful:
Drilling Engineers, Project Managers, Drilling Department Accountants, Drilling Planning Executives
and Managers, Finance Executives/ Manager, Contracts, Procurement, Business Development
Executives/Managers, Government or Regulator Industry representatives and related professionals.

Learn more about our Strategic Learning Solutions for Oil & Gas
Call +65 6741 9927 or email to info@asiaedge.net.
Visit us at www.petroedgeasia.net for more information.
Well Costing
31 May – 1 June 2012, Kuala Lumpur

DAY ONE

Terminology & Phases in Well Development and Drilling


This section will illuminate various terminology used in Exploration, Development and Production phases for
well construction and delivery.

Overview of Well Construction


 The evaluation and development of oil and gas reserves
 Well construction process from the reservoir to the surface.
 Historical context for well construction for both onshore and offshore assets

Well Cost Controlling


 Costs related to D&C (drilling & completion) activities.
 Focusing on cost tracking module databases, Master Equipment List (MEL) / Procurement To Pay (P2P)
Process accountabilities.
 Using well project management software for project creation, purchase orders, offshore costs reports
and supplier management will be illustrated.
 How financial commitments are controlled and reported
 Discussion of audit trails, reporting and liaison with accounting

Drilling Cost
 How to design a standardized Drilling Cost Estimating tool or template to be adopted by Rig team.
 Building a Cost Tracker and utilizing the Cost Tracker ensuring In-depth look at WBS’s (Planning / Drilling
/ Completion) for onshore & offshore activity.
 Role of the Cost Tracker in relation to well operations, the Rig Team, offshore engineers and the layout /
format required.
 Developing cost information to the offshore drilling engineers relating to day rate costs for equipment,
services and personnel.
 Purpose of cost review meetings with the Rig Team (Senior Well Engineer / Ops Engineer / L.C.E.) for
performance evaluation.

Well Cost Reporting


 Understand the array of Well Costing Reporting and how to analyse them
 Comparing invoiced costs against the relevant tracked costs in the cost tracker and reporting variances
 Using ERP solutions to run a variety of reports (Actual/Commitment/Total/Plan, Materials, Services,
Actual V's Plan, Etc.) as and when required
 Design and generate a meaningful Well Cost Reports from the information provided by ERP solution and
competently answer any questions resulting from these reports.

Well Cost Reconciliation


 How to perform a Well review or reconciliation within 90 days of well operations ending
 How to create the required document that gives complete visibility of well costs are the key topics.
Preparation of an auditable set of well costs for JV partners,
 Understanding audit rights under the terms of the J.O.A.

Learn more about our Strategic Learning Solutions for Oil & Gas
Call +65 6741 9927 or email to info@asiaedge.net.
Visit us at www.petroedgeasia.net for more information.
Well Costing
31 May – 1 June 2012, Kuala Lumpur

Risk Management
 Purpose of Risk Management as a process for raising the bar for operations and well management safety
 Risk management and mitigation is directly related to on-target performance and sustainability through
corporate social responsibility
 How to achieve sustainability and operational excellence while mitigating high risk activities will be
illuminated.

DAY TWO

Role of the AFE (Authority for Expenditure)


 FM/AFE preparation, designing/building of robust well-cost tracker, tracking well costs on a daily basis
 The coordination role with offshore engineers regarding cost tracking information (i.e. casing
runs/fishing jobs, etc), providing accurate cost data to wells team on a daily/weekly basis also will be
included.
 How to prepare cash v's tracker v's AFE comparison reports with variance analysis.
 How to prepare & issue weekly drilling costs forecast to wells team/ management team.
 Setting-up of the AFE tracking system
 How to identify over-runs and advising management of requirement to raise supplementary AFE's are
covered in this section.
 Calculating VOWD (value of work done) for month end and how to calculate month end accruals are
other issues that will be tackled.

Capital and Operational Expenditures (Capex & Opex)


 How to develop an issue monthly Capex Drilling reports to management/ Partners/ Asset team
accountants will be illustrated.
 Methodology for detailed well reconciliations to the required industry standards will be shown.
 Providing additional cost tracking/reporting on a monthly basis for Opex spends
 Preparing & issuing of monthly Opex forecasts to management and partners
 Developing Annual Asset Spend Profiles for Federal Contracts

Inventory
 How to perform monthly stock reconciliations
 How to develop & issue monthly stock reports to wells team to provide visibility of what equipment is
held in stock & what additional stock needs to be bought for future wells.
 How to work with the wells team, surplus stock & ensuring that all monies are recovered in a timely
manner is a critical area of interest.

Governance
 Addressing issues arising from Auditors during JV Partner Audits.
 How to co-ordinate the accounting group on key accounting matters (i.e. Inventory, Logistics, and
Accounts Payable) will be illuminated.
 How to manage accounting staff responsible for different Mobile Rigs/Platforms within the same
Performance Unit
 Agreeing goals & objectives for these colleagues reviewing their performance on an on-going basis
 How to develop a roadmap for effective participation in the on- going review of Drilling Accounting
Processes, identifying & implementing of 'Industry Practice' solutions

Learn more about our Strategic Learning Solutions for Oil & Gas
Call +65 6741 9927 or email to info@asiaedge.net.
Visit us at www.petroedgeasia.net for more information.
Well Costing
31 May – 1 June 2012, Kuala Lumpur

Your Expert Trainer: James Halluk


In his previous assignment with BP Caspian Sea and Partners LLC, James developed an operational project
improvement plan on behalf of BP for SOCAR’s Baku Deepwater Jacket Factory (BDJF). This included review
of all processes and procedures from a Finance, QMS and HSSE standpoint during the jacket construction
phase. Considerable time was spent on the budgeting and finance aspects of the project. James developed
and implemented international budget & finance standards for better coordination with their international
partners; McDermott International, Saipem and Petrofac. This required working closely with the financial
accounting group on planning, cash flow management, invoicing and capital asset management. James led a
Big Four Sarbanes Oxley team for the Joint Venture review of BP Strategic Business Unit in Aberdeen; the
largest SBU in the company. This entailed identifying all business processes in the joint venture operation
which included JOA, JV Committee meetings and thorough examination of the JIB. During the project several
key weaknesses were identified, improvements were made in JIB disputes resolution mechanism and
reporting improved. His previous clients include: BP Caspian Sea and Partners, BP North Sea Strategic
Business Unit, BP TNK, Chevron, ENI Agip, Exxon Mobil, Gazprom, KEC, Kuwait Oil Company, Kuwait Gulf Oil
Company, LUKoil, Oil Development Company, Petro Canada, Surgutneftgaz, Saudi Arab Texaco, UkrNafta

Testimonials

“Restructuring and Reorganizing the Financial Functions for upstream oil and gas companies regardless of size has been
a tremendous service provided by James Halluk. His current knowledge of accounting issues and ability to blend
commercial acumen with risk controls has enabled the finance department to add value to our organization.” Senior
Manager, BP Caspian Sea and Partners “When it comes to joint venture accounting , joint venture operations and
petroleum accounting there is no better authority or resource for any client to engage.” Richard Glasspool, Partner,
KPMG

“If you are start-up upstream oil and gas corporate looking for a Chief Financial Officer or a Financial Director to build
your accounting infrastructure which leverages software, who can provides petroleum accounting policies and
procedures, has thorough knowledge of IFRS, PSA and Joint Ventures, can develop a suite of meaningful management
reports and can succinctly present financial results to the Board of Directors, I would recommend James Halluk.”
Konstantin Kotiaev, Tyumen O&G Company

“James is an executive professional providing diversified experience within various industries hand environments.
Recognized for better practice knowledge, profit-centric thinking, and collaborative work ethic with strong follow-
through and management skills.” Anglo-European Resources

About petroEDGE
PetroEdge is a specialist Oil & Gas training provider with our key training hub based in the Asia-Pacific region. Since
inception in 2007, we have trained over 1000 engineers in various specialised disciplines in the Oil & Gas sector. Our
core focus is in developing competency in the local workforce of petroleum engineers, scientists and related
professionals in leading NOCs, IOCs and contractors based in the Asia-Pacific region. In our commitment to create
sustainable skills development, we facilitate cost-effective skills transfer opportunities for local operators and
contractors through world-class training courses with leading experts. Through our unique client engagement model
and local presence, we are better positioned to fulfil critical learning requirements of locally based organisations.

To learn more about us, visit www.petroedgeasia.net

Learn more about our Strategic Learning Solutions for Oil & Gas
Call +65 6741 9927 or email to info@asiaedge.net.
Visit us at www.petroedgeasia.net for more information.
Well Costing
REGISTRATION
31 May – 1 June 2012, Kuala Lumpur FORM

Well Costing EARLY BIRD  NORMAL  TEAM DISCOUNTS


PetroEdge recognises the value of learning in
teams.
31 May – 1 June 2012
Kuala Lumpur SGD 2399 SGD 2599
Group bookings at the same time from the same
company receive the following:
3 or more at 5% off
5 or more at 7% off
PetroEdge In-house Training 8 of more at 10%
Yes, I would like to organise this training on-site and save over 25% of total course fees!
For further information about On-site Solutions, please call +65 67419927 or email All other promotions including early bird are exclusive of
info@asiaedge.net the group discount.

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substitutions or alterations will be updated on our web page as soon as possible.

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Learn more about our Strategic Learning Solutions for Oil & Gas
Call +65 6741 9927 or email to info@asiaedge.net.
Visit us at www.petroedgeasia.net for more information.