Oil and Gas Wells Financial Model

The Oil and Gas Wells 20-Year Financial Model is a sophisticated Excel tool designed to provide a comprehensive financial forecast for oil and gas exploration and production projects. This model enables users to meticulously plan and analyze various aspects of their operations, from initial exploration to long-term profitability. The model is organized into distinct tabs, each serving a critical function:

Global Control:

• Sets foundational parameters, including company name, launch year, forecast end month, and provides resources for oil and gas research.
• It also summarizes total activity for GP and LP contributions and distributions.

Deployment:

• Defines well cohorts, drilling schedules, exploration periods, success rates, drilling costs, extraction costs, revenue assumptions (selling prices, royalties), and production decline rates.

Fixed Costs:

• Models ongoing operational expenses, including executive team costs and other fixed costs.
• Other Costs: Defines catch-all costs as a percentage of net revenue.

Executive Summary:

• Presents a high-level overview of the project’s financial performance, including well drilling activity, revenue, costs, cash flow, and visualizations.

Monthly Detail:

• Provides detailed monthly projections, including drilling activity, revenue, costs, taxes, and cash flow.

Annual Detail:

• Aggregates monthly data into annual projections, providing a comprehensive view of the project’s financial performance over 20 years.

Waterfall:

• Models joint venture structures, including GP/LP splits, preferred returns, hurdle rates, and cash flow distributions.

Visualizations:

• Offers a suite of charts and graphs visualizing key performance indicators, including units sold, revenue, cash flow, drilling activity, and production decline curves.

Matrix:

• Houses the dynamic logic for calculating production, revenue, and costs based on deployment assumptions.

Example Cost:

• Provides a space for users to input detailed cost breakdowns for reference.

Key Features of Oil and Gas Wells Financial Model:

• Detailed modeling of multiple well cohorts with customizable drilling schedules and success rates.
• Comprehensive cost modeling, including exploration, drilling, extraction, and fixed costs.
• Dynamic revenue projections based on selling prices, royalties, and production decline rates.
• Automated cash flow calculations and internal rate of return (IRR) analysis.
• Robust joint venture waterfall modeling with customizable hurdle rates and GP/LP splits.
• Extensive visualizations to track key performance indicators and project performance.
• Ability to model exponential decline curves of production.
• Ability to model costs as a percentage of revenue.

This model is an invaluable tool for oil and gas companies, investors, and financial professionals seeking to evaluate the financial viability of exploration and production projects.