Presentation by ESI at the P2 Ascend Conference in November 2014.

1. Managing Your International
Assets with Enterprise Upstream
TIMOTHY AKARUE| SAHARA UPSTREAM
FRANCISCO CORTES| ENERGY SOLUTIONS INTERNATIONAL (ESI)
BRENT THOMAS| ENERGY SOLUTIONS INTERNATIONAL (ESI)

2. 2
Agenda
1
2
3
4
5 Sahara Upstream | EU Solutions
Introductions| Timothy, Francisco and Brent
Sahara Upstream| The Sahara Group
International vs North American E&P| How do international assets differ
Enterprise Upstream (EU) International Solution| Operations, PSA, etc.

3. 3
Introductions
TIMOTHY, FRANCISCO AND BRENT

4. 4
Introductions
• Timothy Akarue
– Systems & Project Manager
– Sahara Upstream – A Sahara Group Company
• Francisco Cortes
– Director of Financial Solutions
– Energy Solutions International (ESI)
• Brent Thomas
– Director of Operation and Allocation Solutions
– Energy Solutions International (ESI)

5. 5
Sahara Upstream
A SAHARA GROUP COMPANY

6. 6
Diversified in the energy sector with businesses
that span the entire energy value chain…
• Commodities Trading,
• Upstream O&G,
• Aviation Supply,
• Downstream (petrol stations),
• Power Generation & Distribution,
• Infrastructure Service Provisioning,
• Storage,
• Logistics
• Shipping

7. 7
Sahara Upstream is the
exploration and production (E&P)
arm of the Sahara Group. Its
affiliates include;
• Sahara Energy Field (SEFL),
• Enageed Resources,
• Sahara Energy Exploration and
Production

8. 8
Sahara Upstream has a firm
foundation in selected West African
basin assets either as operator or
partner:
• OPL 274 Western onshore Niger
Delta (100%)
• OPL 284 Offshore Deep Water (45%)
OPL 286 Offshore Deep Water (26%)
• OML 40 Onshore W Niger Delta
(51%)
• SWCTP Offshore Shallow Water (90%)
• CI-500 Offshore Shallow Water (35%)
• CI-502 Offshore Deep Water (20%)

9. 9
Why chose Oracle/P2/ESI?
• Sahara Group is Oracle Solutions shop.
– Leverage on Oracle in-house
knowledge
– Resides in the same database as EBS
– Built on Oracle Applications Framework
– Uses the EBS security model
– Shares menus and navigation
– Allows forms personalization
• P2 Enterprise Upstream Solution
– Follows Oracle Standards
– Fully Integrated with Oracle
• ESI as Implementer
– Reputation in the MENA Market Place
– Industry and Solutions Expertise
Sahara Upstream Business Requirements
• Integration
• Within solution modules
• Overall company
• Reduce manual processes
• Managing joint ventures accounting
• Produce billing statements
• Reporting
• Single Source
• Robust and Flexible
• Napims (Government) reporting

10. 10
International vs North American E&P
HOW DO INTERNATIONAL ASSETS DIFFER

11. 11
Unique Business and International Observations
• Operations and Production
– Reserves vs. Production
– What information is important?
• Financial
– Production Sharing Contracts
• Annual Work Program Budget approved by government
• Expenditure controls on budget
• Entitlement changes based on PSC calculations
– Governing Reporting Requirements
• Specific to country: government or royal family
– Joint Venture
• Cash call requirements

12. 12
Reserves vs Production: Who gets it done?
Top Eight Oil Reserves (MMBBL)
1. Venezuela 297,170
2. Saudi Arabia 269,913
3. Canada 175,200
4. Iran 157,300
5. Iraq 140,300
6. Kuwait 104,000
7. UAE 97,800
8. Russia 80,000
Top Eight Oil Producers (BBL/Day)
1. Russia 10,900,000
2. Saudi Arabia 9,900,000
3. United States 8,453,000
4. Iran 4,231,000
5. China 4,073,000
6. Canada 3,592,000
7. Iraq 3,400,000
8. UAE 3,087,000

13. 13
Reserves vs Production: Who gets it done?
Top Eight Oil Reserves (MMBBL)
1. Venezuela 297,170
2. Saudi Arabia 269,913
3. Canada 175,200
4. Iran 157,300
5. Iraq 140,300
6. Kuwait 104,000
7. UAE 97,800
8. Russia 80,000
Top Eight Oil Producers (BBL/Day)
1. Russia 10,900,000
2. Saudi Arabia 9,900,000
3. United States 8,453,000
4. Iran 4,231,000
5. China 4,073,000
6. Canada 3,592,000
7. Iraq 3,400,000
8. UAE 3,087,000

14. 14
Reserves vs Production: Who gets it done?
Top Eight Oil Reserves (MMBBL)
1. Venezuela 297,170
2. Saudi Arabia 269,913
3. Canada 175,200
4. Iran 157,300
5. Iraq 140,300
6. Kuwait 104,000
7. UAE 97,800
8. Russia 80,000
Top Eight Oil Producers (BBL/Day)
1. Russia 10,900,000
2. Saudi Arabia 9,900,000
3. United States 8,453,000
4. Iran 4,231,000
5. China 4,073,000
6. Canada 3,592,000
7. Iraq 3,400,000
8. UAE 3,087,000

15. 15
Reserves vs Production: Who gets it done?
Top Eight Oil Reserves (MMBBL)
1. Venezuela 297,170
2. Saudi Arabia 269,913
3. Canada 175,200
4. Iran 157,300
5. Iraq 140,300
6. Kuwait 104,000
7. UAE 97,800
8. Russia 80,000
Top Eight Oil Producers (BBL/Day)
1. Russia 10,900,000
2. Saudi Arabia 9,900,000
3. United States 8,453,000
4. Iran 4,231,000
5. China 4,073,000
6. Canada 3,592,000
7. Iraq 3,400,000
8. UAE 3,087,000

16. 16
Enterprise Upstream Production Management
All Things Equal, Squeeze
Everything out of EU Production
Managements Allocation Engine
• Multi-Tier Allocations
• Information Only Products
• Custom Dispositions
• BuyBack

17. 17
Enterprise Upstream Operations “Squeeze”
North America
Operational Data
Ware house
Volume Allocation
Engine
International
Operational Data
Warehouse
Volume
Allocation
Engine

18. 18
Enterprise Upstream Operations “Squeeze”
North America
Operational Data
Ware house
Volume Allocation
Engine
International
Operational Data
Warehouse
Volume
Allocation
Engine

19. 19
Enterprise Upstream Operations “Squeeze”
North America
Operational Data
Ware house
Volume Allocation
Engine
International
Operational Data
Warehouse
Volume
Allocation
Engine

20. 20
Unique Financial Challenges with International
• Production Sharing Contracts/Agreements
– Simple Definition
– Components and Simple Example
• International Joint Venture
– Cash call requirements
– AFE Management
• Reporting Requirements
– NAPIMS in Nigeria

21. 21
Simple PSA
Key Components
• Production
• Lifting
• Recoverable Costs
– Sliding Scale
– Well Phases
• Profit Oil
• Royalty
• Taxes
• Overhead
• R-Factor

22. 22
International
Joint Venture
Cash Calling JV Partners by
including Cash Flow Elements
• Define Net Cash Flows
(Current Assets – Current
Liabilities)
• Determine Cash Call
Position (Cash Calls Issued –
Cash Calls Received)
• Include Budget or Forecast
amounts

23. 23
International AFE
Managing AFE & Work Programs
Efficiently
• Government Budgets (Annual Work
Programs)
– Work Programs require Its own set of
Account & Categories
– Generate Monthly Performance Reports
to Government
• Capital Projects (Authorization for
Expenditures)
– Automated integration between EU AFE
and Oracle GL Budgets
Automated AFE Closure to
Fixed Assets
• AFE Close event
automatically creates Fixed
Asset Lines and its respective
GL Journal Entry re-
classification

24. 24
Government Reporting
• Oil & Gas National Companies
required to report as per their
regulatory organizations
• Individual Assessment
• Experience
• Capitalize on Solutions
Capabilities
Every Country a New
Government Reporting
Challenge
National Petroleum Investment
Management Services (NAPIMS) is
the Corporate Services Unit (CSU)
and the Exploration and
Production (E&P) Directorate of
the NNPC.
Managing Nigeria Government's
investment in the Upstream sector
of the Oil and Gas industry

25. 25
EU International Solution
OPERATIONAL, PSA, ETC.

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Taking Advantage of EU Operational Capabilities
Form Fields
• Well Test
– Frequency
– Detail
• Gas and Oil Analysis
• Events
• Equipment Reading Details
• FlexFields
• Forms Customizations and Forms
Personalization
Operational Forms
• Engineering TPMS – CC and PQ
• Operating Units
• User Defined Events
• Equipment Forms
– Chemical Injection
– Common Equipment
– Heater Treater
– Pipeline
– Separator
– Valve and Choke

27. 27
“BUT WAIT,
THERE’S MORE”
Operationally
focused modules in
Enterprise Upstream?

28. 28
Operational Modules in EU
Well Activities
• Plans and captures specific operational activities both at well and
completion level. Includes detailed forms and cost per activity.
Terminal Management
• Forecast tank stock inventories and party lifting positions as well as
account for party ownership positions of actual trips and movements.
Production Sampling Analysis
• A flexible tool that captures the analysis of oil, gas, water chemicals and
water micro-biological agents. Also tracks and monitors chemical
treatment data and corrosion data as well as pigging operations.

29. 29
EU’s Production Sharing Agreement
Production Sharing Agreements
(PSA) manages cost and production
transactions and allows users to
manage their PSA requirements with
easy to define calculations.
With PSA, you can easily manage
your agreements, track costs and
production, as well as manage the
complex calculations required by
each agreement.
Capabilities
• Full integration with Enterprise
Upstream Joint Venture Accounting
(JVA)
• Costs extracted from JVA module
• Manages prior period adjustments
• Allows users to define recoverable
accounts at the agreement level
• Allows for user-override of
recoverable accounts at data input
• Builds on JVA integration with Oracle
Financials

30. 30
EU’s Joint Venture Accounting (JVA)
• Calculate Overhead
• Calculate Utilization
• Division of Interest (DOI)
• Allocate Costs
• Manage Cash Calls
• Billing Processing
• Generate Invoices and Statements
• Analyze Operating Costs/Operated by Others

31. 31
EU’s Authorization for Expenditure
• Generate AFEs
• Track and Monitor Project Progress and Expenditures
• AFE 3D Drill Down
• AFE Accruals
• AFE Capitalized Interest
• AFE Capitalized Overhead
• AFE Reclassification

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Sahara Upstream
EU SOLUTION

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Oracle
• General Ledger (GL)
• Payables
• Receivables
• Fixed Assets
Enterprise Upstream
• Field Operations
• Production Management
• Revenue
• Joint Venture Accounting (JVA)
• AFE (Authorization for
Expenditure)
• LOS (Lease Operating
Statements)

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Solution Module Data Flow

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Challenging Requirements
Business Challenge
• Reservoir and Operational
Focused
• Industry and Solution Expertise
• Remote and stand alone FDC
Solutions
• Operational Capabilities of EU
Production
• ESI/Sahara relationship
• Field Capture solution of Field
Operations

36. 36
Allocations and Operations
Module Implementation & Training
• EU Production Management
• EU Field Operations
Module Capabilities
• Now and Moving Forward
Industry Best Practices
• KPIs
• Operational Data

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Challenging Requirements
Business Challenge
• A suggested process for
optimizing Working Capital
• Alternate Capitalization of WIP
Expenditures to Fixed Assets
Process
• Joint Venture Accounting and
AFE’s Reporting under NAPIMS
Values
Solutions
• New Perpetual Cash Call
method, which includes: Costs,
Expenditures Inflow, Outflow,
Budget & Forecast Factors
• New Integrated AP-GL-JVA-AFE-
FA Business & System Process
• Sahara and NAPIMS COA values
are mapped for pivot reporting

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AFE Re-Class Solution Details

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Financial Reporting Solution

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Government Reporting Solution
• Setup and use of mapped
COA values for government vs.
internal reporting
• ESI Customer Report
Every Country a New Opportunity

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ESI International Clients

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