Advanced Joint Venture Cash Call (JVCC) for the Oil & Gas Industry

Course Description

In view of an increasingly cost-focused and cash flow business climate, this short course is designed to address the effective design and operated cash call activities and framework that are critical to success of the JV partnership. This is because, in accordance with the terms and conditions in the Joint Venture (JV) / Joint Operating Agreement (JOA), each month the operator must estimate the cash requirements for the upcoming month and request payment from the non-operating associates. Once paid, the advance payment will be offset against the actual expenditures which appear on the Joint Venture Billing statement. It is also demonstrated that without them, the operating oil company is unable to make cash calls for anticipated future capital and operational expenditures from non-operating partners and ensure its success. Oil field and gas field E & P costly activities often suffer immensely whenever any of the partners is unable to meet his obligation to raise capital to finance its share of the joint venture cash calls, which enable the project to exist and operate.

 

Course Objectives

This short course presents oil and gas joint venture principles covering contract types that include unincorporated joint ventures (UJVs) and incorporated joint ventures (IJVs) contracts, and it also outlines critical issues involved in making oil and gas joint venture successful and the accounting, budgeting and auditing practices involved. In addition - an overview of cash calls vs. cash cutbacks, which are similar but not the same, are covered, plus reporting accuracy and transparency - are covered. Basics of process flows of cash calling activities, outstanding cash calls and repayment options, impact of cash default on the project viability, and disputes – are included.  Case studies and videos add to the clarity and attraction of this course.

  • By the end of this advanced level training course attendees will be able to read and understand all the critical issues of a JVCC Arrangement.
  • Attendees will also understand all the key and more complex elements that should be addressed in a JVCC Arrangement negotiation and execution.
  • Attendees will be able to select the most appropriate forms of JVCC Arrangement with attention paid to the more complex issues of risk management and sharing.
  • Attendees will learn the issues to negotiate and agree a JVCC Arrangement, and how to administer it during the asset’s production phase.
  • This advanced course will also equip attendees with the necessary knowledge to play a role in the JVCC Arrangement environment in an efficient and effective manner.

 

Continuing Professional Development

35 HOURS CPD

 

Course Content

Day 1

JV Contract Types, Roles and Responsibilities of JVCC parties

  • Unincorporated joint venture (UJVs) contracts
  • Incorporated joint venture (IJVs) contracts
  • Differences between UJVs and IJVs
  • General accounting in JV contracts
  • Roles & responsibilities of JV Accountant, Auditor, Sponsor, Lender, Equity Investor
  • Financial Advisor, Technical Advisor, Legal Advisor, Debt Financier, Regulatory / Government Agencies

CASE STUDY / VIDEO / EXERCISE

 

Day 2

Overview of oil and gas contract agreement types – JVCC principles

  • Oil and gas project financing fundamentals along the joint venture value chain
  • Incorporated joint venture and un-incorporated joint venture contract types in oil and gas industry
  • Joint venture contract’s fiscal regimes resulting in cash calls
  • Overview of cash call types in oil and gas joint venture operations
  • Processes for cash call funding and account reconciliation

CASE STUDY / VIDEO / EXERCISE

 

Day 3

Fundamentals of JVCC budgeting and operating

  • Recoverable and non-recoverable costs in joint venture operations
  • Setting up and running a JV budget
  • Basic processes in oil and gas joint venture cash call accounting and reporting
  • Processes performed periodically in oil and gas joint venture cash call accounting
  • Outstanding cash calls (deficit) and repayment options

CASE STUDY / VIDEO / EXERCISE

 

Day 4

Entitlements of JVCC partners

  • Entitlement oil/gas of joint venture partners
  • Accounting for deficit cash calls
  • Carried interest in cash call payment
  • Modified carry arrangement and impact of cash default on operations and profitability
  • Cut back vs. cash call – a comparison

CASE STUDY / VIDEO / EXERCISE

 

Day 5

  • Software tools and applications
  • Automatically generate a cash call estimate
  • Simply adjust estimates up or down
  • Record cash call payments, track advance balances
  • Automatically applied advance balance to billing invoices

CASE STUDY / VIDEO / EXERCISE

 

 

 

Location

Date

 

London, United Kingdom

 

 

19-23 February 2018

 

Dubai, United Arab Emirates

 

 

18-22 March 2018

 

Houston, Texas, United States

 

 

14-18 May 2018