Skripsi
Analysis of Oil and Gas block Valuation using the Cost Recovery method at PT XYZ
Pengarang:
Khaila Ayu Maharani - ; Gede Harja Wasistha (Pembimbing/Promotor) - ; Lindawati Gani (Penguji) - ; Rafika Yuniasih (Penguji) -
Deskripsi
This internship report discusses the valuation process of the Pyramid Production Sharing
Contract (PSC), an upstream oil and gas asset located in East Kalimantan, using the
Discounted Cash Flow (DCF) method under the Cost Recovery PSC framework. The
analysis process included industry analysis, transaction rationale analysis, operational and
financial projection development, Weighted Average Cost of Capital (WACC)
estimation, and sensitivity analysis. The valuation model incorporated oil price
forecasting based on Brent crude oil futures, production projections based on historical
realization and approved field development plans, as well as operating and capital
expenditure projections derived from historical operational data and future drilling
programs. Based on the valuation result, the Pyramid Block generated a positive Net
Present Value (NPV) of approximately USD 26.13 million using a Weighted Average
Cost of Capital (WACC) of 7.32%. Overall, the valuation methodology applied
throughout the analysis was generally consistent with established valuation theory and
common practices within Indonesia’s upstream oil and gas industry. However, several
areas for improvement were identified throughout the evaluation process, particularly
regarding the limited application of the PESTLE framework within the industry analysis
and the inclusion of Cost of Debt within the WACC calculation despite the project-based
nature of upstream oil and gas asset valuation. The evaluation also resulted in a
recalculation of the discount rate using a fully equity-financed assumption, which
produced only a minor difference in the overall valuation result. In addition to the
technical analysis, this internship report reflects the author’s learning experience
throughout the internship period, particularly in developing financial modelling,
valuation, analytical, and problem-solving skills within the upstream oil and gas sector.
Contract (PSC), an upstream oil and gas asset located in East Kalimantan, using the
Discounted Cash Flow (DCF) method under the Cost Recovery PSC framework. The
analysis process included industry analysis, transaction rationale analysis, operational and
financial projection development, Weighted Average Cost of Capital (WACC)
estimation, and sensitivity analysis. The valuation model incorporated oil price
forecasting based on Brent crude oil futures, production projections based on historical
realization and approved field development plans, as well as operating and capital
expenditure projections derived from historical operational data and future drilling
programs. Based on the valuation result, the Pyramid Block generated a positive Net
Present Value (NPV) of approximately USD 26.13 million using a Weighted Average
Cost of Capital (WACC) of 7.32%. Overall, the valuation methodology applied
throughout the analysis was generally consistent with established valuation theory and
common practices within Indonesia’s upstream oil and gas industry. However, several
areas for improvement were identified throughout the evaluation process, particularly
regarding the limited application of the PESTLE framework within the industry analysis
and the inclusion of Cost of Debt within the WACC calculation despite the project-based
nature of upstream oil and gas asset valuation. The evaluation also resulted in a
recalculation of the discount rate using a fully equity-financed assumption, which
produced only a minor difference in the overall valuation result. In addition to the
technical analysis, this internship report reflects the author’s learning experience
throughout the internship period, particularly in developing financial modelling,
valuation, analytical, and problem-solving skills within the upstream oil and gas sector.