Asset Value Framing: Maximizing Asset Lifecycle Value Through Opportunity Roadmap Formulation

2019 ◽  
Author(s):  
Ryan Guillory ◽  
Maisarah Jamaludin ◽  
Rakesh Ranjan ◽  
Mas Rizal Abdul Rahim ◽  
Rahim Masoudi
Keyword(s):  
Asset Value ◽  
Value Framing

Application of Enhanced Asset Value Framing AVF Approach to Unlock Significant Potential Value in Highly Compartmentalised and Stacked Reservoirs

2021 ◽  
Author(s):  
Yeek Huey Ho ◽  
Ryan Guillory ◽  
Ankaj Kumar Sinha ◽  
Rusli Din ◽  
Rakesh Ranjan ◽  
...  
Keyword(s):  
Field Potential ◽  
Development Planning ◽  
Oil Field ◽  
Oil Reservoirs ◽  
Development Plan ◽  
Recovery Factor ◽  
Opportunity Identification ◽  
Significant Potential ◽  
Asset Value ◽  
Value Framing

Abstract As host authority for all hydrocarbon resources in Malaysia, Petroliam Nasional Berhad (PETRONAS) Malaysia Petroleum Management (MPM) has championed Asset Value Framing (AVF) since 2016 to facilitate identification of asset enhancing opportunities and to establish a roadmap for opportunity realization. This paper is the continuation of the previous paper (SPE-196486) which illustrated opportunity identification through AVF. In 2019, PETRONAS had embarked on benchmarking oil reservoirs for all Malaysian oil reservoirs which was used for the AVF process to improve economic recovery factor of an oil field and booking new contingent resources. This paper focuses on enhanced AVF approach to integrate subsurface, wells, surface and operations; coupled with recommended improvements to AVF process from lookback exercise, reservoir performance assessment, data analytic through reservoir benchmarking tool and assessment of analogue reservoirs. A case study will be shared from one of the largest oilfields in Sarawak wherein enhanced AVF approach was applied to unlock significant potential of which conventional techniques faced challenges in identifying opportunities. Field B consists of multi-layered depositional system with numerous fault-bounded accumulation areas. Benchmarking process was performed for each of reservoir units to estimate the potential recovery factor and degree of complexity. In reservoirs where current estimates of recovery factor were lower than the benchmark, these were screened to be considered for identification of new opportunities through AVF process. Additionally, benchmarking process was applied to evaluate optimal well spacing, need for secondary recovery and identification of potential challenges for future development planning. A paradigm shift was undertaken to AVF process itself whereby focused development plan was considered for the entire column of rock within every fault block - instead of chasing oil by reservoirs. This subsequently allowed an integrated approach to optimize well type and cost, infill and water injection well count, completion design and overall evacuation strategy. Application of reservoir benchmarking significantly improved the delivery of AVF process by identification of recovery gaps in the field and application of learnings from better performing reservoirs. This coupled with Enhanced AVF workflow approach of focused development plan has resulted a roadmap for Field B to achieve ultimate recovery factor of 40% through a number of potential development opportunities within the next few years. An enhanced AVF workflow coupled with benchmarking process has facilitated field potential evaluation within two months, leading to efficient decision making, resource accrual and value creation for all stakeholders. This workflow can be replicated to other fields, maximizing economic reserves, increasing asset value, and defining the development roadmap.

Pricing an Option on a Non-Decreasing Asset Value: An Application to Movie Revenue

2005 ◽  
Author(s):  
Don M. Chance ◽  
Eric T. Hillebrand ◽  
Jimmy E. Hilliard
Keyword(s):  
Asset Value

scholarly journals Analysis of the Internal Relationship between Ecological Value and Economic Value Based on the Forest Resources in China

2021 ◽  
Vol 13 (12) ◽  
pp. 6795
Author(s):  
Jianxin Geng ◽  
Chengzhi Liang
Keyword(s):  
Ecosystem Services ◽  
Natural Resource ◽  
Ecosystem Service ◽  
Market Value ◽  
Forest Resources ◽  
Atmospheric Environment ◽  
Shanxi Province ◽  
Ecosystem Service Value ◽  
Service Value ◽  
Asset Value

In this study, we applied gross ecosystem product (GEP) theory in a case study to analyze and explain the natural resource asset value and ecosystem service value of forest resources in Jiaokou County, Shanxi Province, Northern China, in 2018. GEP refers to the total value of various final material products and services provided by ecosystems. In this paper, six service functions of a forest system, including water conservation, soil conservation, carbon fixation and oxygen release, forest nutrients, purification of atmospheric environment, and biodiversity, are valued by three calculation methods: the alternative cost method, market value method, and control cost method. The study revealed the following: (1) There is a parallel relationship between the value of natural resource assets and the value of ecosystem services. GEP includes the market value of natural resource assets, but it is mostly the value of ecosystem services. (2) The measurement of the physical quantity of forest ecosystem services depends on parameter data, and the monetary calculation often has no mature pricing basis, which leads to the large scale and uncertainty surrounding the evaluation results of ecosystem services. (3) The ecosystem service value and natural resource asset value have different practical significance, as well as alternate theoretical bases. The value of natural resource assets can be used as the asset valuation basis of economic transactions, which plays a role in macroeconomic management. The value of ecosystem services can be used as the basis of ecological compensation, providing information for the preparation of the balance sheet of natural resources.

Reconsidering Returns

2021 ◽  
Author(s):  
Samuel M Hartzmark ◽  
David H Solomon
Keyword(s):  
Mutual Funds ◽  
Price Index ◽  
Market Performance ◽  
Performance Expectations ◽  
Asset Value ◽  
Net Asset Value ◽  
Perception Of Performance ◽  
Predictable Returns

Abstract Investors’ perception of performance is biased because the relevant measure, returns, is rarely displayed. Major indices ignore dividends, thereby underreporting market performance. Newspapers are more pessimistic on ex-dividend days, consistent with mistaking the index for returns. Market betas should track returns, but track prices more than dividends, creating predictable returns. Mutual funds receive inflows for “beating the S&P 500” price index based on net asset value (also not a return). Investors extrapolate market indices, not returns, when forming annual performance expectations. Displaying returns by default would ameliorate these issues, which arise despite high attention and agreement on the appropriate measure.

scholarly journals Managing Shutdown Decisions in Merchant Commodity and Energy Production: A Social Commerce Perspective

2020 ◽  
Author(s):  
Alessio Trivella ◽  
Selvaprabu Nadarajah ◽  
Stein-Erik Fleten ◽  
Denis Mazieres ◽  
David Pisinger
Keyword(s):  
Energy Production ◽  
Local Community ◽  
Binary Classification ◽  
Problem Definition ◽  
Stochastic Dynamic ◽  
Anticipated Regret ◽  
Social Commerce ◽  
Asset Value ◽  
Plant Closures ◽  
Operating Policies

Problem definition: Merchant commodity and energy production assets operate in markets with volatile prices and exchange rates. Plant closures adversely affect societal entities beyond the specific plant being shut down, such as the parent company and the local community. Motivated by an aluminum producer, we study if mitigating these hard-to-assess broader impacts of a shutdown is financially viable using the plant’s operating flexibility. Academic/practical relevance: Our social commerce perspective toward managing shutdown decisions deviates from the commonly used asset value maximization objective in merchant operations. Identifying operating policies that delay or decrease the likelihood of a shutdown without incurring a significant asset value loss supports socially responsible plant shutdown decisions. Methodology: We formulate a constrained Markov decision process to manage shutdown decisions and limit the probability of future plant closures. We provide theoretical support for approximating this intractable model using unconstrained stochastic dynamic programs with modified shutdown costs and explore two classes of operating policies. Our first policy leverages anticipated regret theory, and the second policy generalizes, using machine learning, production-margin heuristics used in practice. We compute the former and latter policies using a least squares Monte Carlo method and combining this method with binary classification, respectively. Results: Anticipated-regret policies possess desirable asymptotic properties absent in classification-based policies. On instances created using real data, anticipated-regret and classification-based policies outperform practice-based production-margin strategies. Significant reductions in shutdown probability and delays in plant closures are possible while incurring small asset value losses. Managerial implications: A plant’s operating flexibility provides an effective lever to balance the social objective to reduce closures and the financial goal to maximize asset value. Adhering to both objectives requires combining short-term commitments with external stakeholders to avoid shutdown with longer-term internal efforts to reduce the probability of plant closures.

Capturing Effects of Maintenance Practices in Highway Asset Valuation: Replacement-Cost Approach Versus Book-Value Method

2003 ◽  
Vol 1824 (1) ◽  
pp. 57-65 ◽  
Author(s):  
Poovadol Sirirangsi ◽  
Adjo Amekudzi ◽  
Pannapa Herabat
Keyword(s):  
Pavement Management ◽  
Added Value ◽  
Replacement Cost ◽  
Asset Valuation ◽  
Book Value ◽  
Cost Approach ◽  
Trade Offs ◽  
Study Results ◽  
Asset Value ◽  
The Impact

The replacement-cost approach and the book-value method as decision support tools for selecting maintenance alternatives under budget constraints and for capturing the effects of maintenance practices on highway asset value are investigated. By using a case study based on the Thailand Pavement Management System, the replacement-cost approach and the book-value method are applied to analyze maintenance alternatives for selected highways. The versatility of these asset-valuation methods is explored for capturing trade-offs in the type and timing of maintenance and for incorporating the added value of effective maintenance practices and the impact of deferred maintenance in the overall asset value. The study demonstrated that the replacement-cost approach is a more versatile tool for considering the maintenance-related value of highways in maintenance decision making, whereas the book value may be a simpler financial accounting tool. The two approaches may be used together to clarify how maintenance expenditures are being translated into facility replacement value or how the overall value of the infrastructure is being preserved. The study results are potentially useful to agencies interested in capturing the added value of effective maintenance practices in the overall value of their asset base.

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