A One-Day Classroom Seminar (CPE Approved)
Houston, TX - February 21, Courtyard Marriott Houston by the Galleria

Valuation of energy assets and structured energy contracts can be complex and challenging because they often have operational constraints and flexibilities that impact the cash flows produced by the asset or obligation. Energy asset valuation requires not only in-depth familiarity with energy industry operations, infrastructure, and markets, but also a sophisticated knowledge of finance techniques and the decision criteria of regulated and deregulated markets.

In this seminar we provide an in-depth overview of the economic principles of valuing physical and contractual assets in the electric, natural gas, and petroleum industries. Starting with a detailed knowledge of the business strategy, market structure and operational issues, we build the strategic business case for capital investment and project risk management.

We particularly focus on the financial tools used to evaluate the complex risks, operational flexibility, and options that are often associated with energy assets and structured products. Participants focus on the strengths of various financial modeling techniques, forecasting, and market analysis with a special focus on the principles of real options using traditional financial engineering methods. Click here to register.

 

What You Will Learn

• How to Value Complex Commodity Contracts
• How to Value Power Plants, Plant Upgrades and Tolling
• How to Value Transmission and Distribution Investments
• How to Value Natural Gas and Electric Storage Assets
• How to Value Strategic Petroleum Investments
• Risk Management Tools to Monetize Value
• Electricity Price Forecasting using Financial Engineering Methods

You Will Also Learn

• Strategic planning in regulated and deregulated utilities.
• Regulated avoided cost and cost effectiveness calculations.
• The pros and cons of net present value (NPV), decision analysis (DA), and real options (RO) valuation techniques.
• Forward price simulation of fuel and energy markets.
• Intrinsic and extrinsic valuation principles using real options.
• Building financial pricing models including start-to-finish development of the Geometric Brownian Motion (GBM), Mean Reversion Jump Diffusion and GARCH models.
• The relationship between financial options and real options, and the three methods of valuing options,Black Scholes, binomial trees, and Monte Carlo simulation.
• How to use Black Scholes, binomial trees, and Monte Carlo simulation to value assets, assess risk and develop hedges to lock in value.
• The role of volatility, portfolio considerations, and risk management implications to asset pricing and valuation.
• Case studies: valuation of complex structured products in gas, power, and oil markets.
• Case studies: how to value physical assets using real option analysis.

Instructor: Kenneth Skinner, Ph. D.

Kenneth Skinner, Ph.D. is Vice President of Risk & Evaluation Products for Integral Analytics, an analytical software and management consulting firm focused on operational, planning, and market research solutions. Dr. Skinner has over 20 years’ experience in evaluation and risk measurement, having worked as an energy consultant with PHB Hagler Bailly and Financial Times (FT) Energy, and as the Derivative Structuring Manager for the retail energy supplier Sempra Energy Solutions.

He has his Ph.D. from Colorado School of Mines, in Mineral Economics, with an emphasis in Operations Research, an MBA from Regis University and his BS in Engineering from Letourneau University.

Dr. Skinner is a nationally recognized expert in economic evaluation and modeling of energy assets including energy storage, distribution and generation, efficiency and demand response, renewable energy alternatives, financial derivatives and structured contracts using net present value, econometric and statistical methods, optimization principles, and real option valuation techniques. Dr. Skinner is currently the technology columnist for Wiley Natural Gas and Electricity Journal and is a noted speaker on energy related topics for organizations such as AESP, IAEE, ACEEE, PLMA, IEPEC, INFORMS, Infocast, EUCI, SNL Energy and PGS Energy Training.

Who Should Attend this Seminar

Among those who will benefit from this seminar include energy and electric power executives; attorneys; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators; engineers; and corporate planners. Types of companies that typically attend this program include energy producers and marketers; utilities; banks & financial houses; industrial companies; accounting, consulting & law firms; municipal utilities; government regulators and electric generators.
Prerequisites and Advance Preparation

Intermediate level. This fundamental course begins with basic material and then proceeds to the intermediate level.
Program Level

Basic level. This fundamental course begins with basic material and then proceeds to the intermediate level.