Slide 4

Question 1

What happens to outcomes and opportunities as the project progresses

Answer 1

Before we start a project, we have ample oppurtunities, but as the project progresses, criteria becomes more strict and we decrease our range of outcomes

Question 2

Define Net Present Value. What is it good in measuring?

Answer 2

Sum of all the expenses (Costs and Inflow) either discounted or non-discounted. It is good to measure the value or scale of a project

Question 3

Define Profit Investment Ratio

Answer 3

Net present value divided by capital investment

Question 4

Economic hurdles for PIR0 and PIR9

Answer 4

PIR0>1.00

PIR9>0.30

Question 5

Internal Rate of Return

Answer 5

The discount rate at which the NPV=0

Question 6

What economic indicators does PEEP give out?

Answer 6

PIR, NPV, IRR

Question 7

How do you decide which projects to green light?

Answer 7

It all depends on the budget

Question 8

In the Dawson Creek, how were the projects ranked?

Answer 8

Based on Suplpy Cost, IRR, and PIR

Question 9

What is DBM

Answer 9

Design Based Memorandum

Conceptual design is the preparatory stage of the whole design process. At these stage some rough sketch, drawings like paintings are presented to give a general view of the project. There are also rough estimates regarding cost of the project. The costs are usually arrive using benchmark, meaning, how much it cost when it was done in this and that countries.

Design Basis Memoranda are issued to guide the desing consultant on their activities. These are important document for designer since any deviation from the memoranda is a variation to their scope of work. For example, the client require the designer for 35 story building, after halway to the work, the client decided to change from 35 storey to 50 storey. So the new instruction from the client is a deviation from the design memoranda.

Question 10

In modern times, is it often cheaper to hire an in-house team or contract out for non permanent projects?

Answer 10

Cheaper to higher outside because the project may not be permanent project. If the project is permanent, would be better to higher in house

Question 11

Which should have a higher IRR %, Exploration or Exploitation?

Answer 11

15% for Exploration

20% for Explotation

Question 12

NPV can be compared between projects of different sizes (T or F)

Answer 12

False, NPV should not be compared to projects of different scopes or sizes

Question 13

NPV0=0$ means what for IRR?

Answer 13

A breakeven analysis where IRR=0%

Question 14

What are supply costs for oil and gas usually measured in (at least in his slides)

Answer 14

$ US / MMBTU

US dollars per million British Thermal Units