Meet the Expert
Professor and Director - Division of Economics and Business, Colorado School of Mines
- Professor and Director of the Division of Economics and Business at the Colorado School of Mines specializing in the areas of strategic decision making, business strategy, and risk management, with a particular emphasis on applications in the petroleum sector.
- Main research interests are in the areas of petroleum valuation, corporate risk management, and the integration of decision analysis and portfolio management in the corporate context.
- Relying on technical developments in the areas of decision analysis, finance and business strategy. provides clients with the ability to improve their decision quality and create value.
- Clients include: Amoco, Anadarko Petroleum, BP Exploration, Cabot Oil and Gas, ExxonMobil, Hess Corporation, Occidental Petroleum, Penn-Virginia Oil Company, Petrobras Petroleos Brasiliero, Phillips Petroleum, Schlumberger, Texaco
Session Packages from $600
Your Expert Package Includes:
- All 9 Best Practices
- Pre-Call Discovery Process
- One-on-One Call with Expert
- Session Summary Report
- Post-Session Engagement
- "Value of information" analysis
- In the oil and gas industry there is no such thing as perfect information. Firms spend millions on seismic information. Value of information analysis combines a number of factors including probability theory to determine the expected value of the information before a firm purchases it.
- Decision science
- Procedures or studies that evaluate a decision maker's chosen course of action, taking into consideration the uncertainty of the situation, the information available about consequences, the risks involved, the costs and benefits, and the time, resources and preferences a decision maker has at his or her disposal for making that decision, instead of choosing other options.
- Deterministic thinking
- The concept that every action produces a reaction, and every cause an effect. The reaction becomes the cause of further reactions. These cascading events can theoretically show how the system will exist at any moment in time.
- E & P
- Exploration and production
- "Internal rate of return." This is the rate of growth a project is expected to return. IRR is often used to prioritize the various opportunities a company is considering. If all of the other factors are equal, then the project with the higher IRR is seen as more valuable and will be undertaken first.
- Monte Carlo simulation techniques
- Monte Carlo simulations run repeated random computations in order to obtain a probabilistic prediction. The outcomes are not unlike what happens when one is gambling at a casino.
- "Net present value." This is the difference between the cash a project is currently producing and the current cost of that same project. NPV is used in capital budgeting to analyze the net profitability of a venture.
- Probabilistic thinking
- Probabilistic analysis combines deductive logic with probability theory to accommodate uncertainty. The result allows for a broad range of possible outcomes from any given combination of events.
Risk Management and Strategic Decision Making for the Petroleum Industry: Defined Terms