Advanced Portfolio Optimization & Uncertainty Analysis
esi.portfolio™ is an analytic platform for evaluating decisions related to upstream oil and gas strategy development, portfolio management, capital allocation, and M&A. Our software can help companies optimize their portfolios and gain insights into their performance potential and their strategic alternatives at a corporate or business unit level. This is done in the context of their existing business, their risks and uncertainties, and their opportunities and objectives.
esi.portfolio brings together data (financial and operational) and the business context (business goals, assumptions, constraints, etc.) to address decisions involving risk or uncertainty.
Integrated, Predictive Business Modeling
Model strategic, operational and financial plans as a tightly integrated whole. Then, review business unit plans and budgets tied to specific initiatives and operations. Since the plans are interconnected, you can quickly assess how changes in one area would impact others. Equally powerfully, you can identify opportunities and challenges based on the interactions among your current business, opportunities, leading indicators and business drivers.
Constraint Based Optimization
Use the power of portfolio optimization to quickly sort through thousands or millions of options and combinations. The results identify the optimal mix and timing of new projects, expansions, cutbacks, acquisitions, joint ventures etc. You can optimize performance from a financial and/or operational perspective, considering multiple goals and constraints, and then easily derive budgets from that plan.
Evaluation of Risk and Uncertainty
Use predictive analytics to understand if you can succeed given the uncertainties in your business. Additionally, you can quantify the probability that specific objectives will be met and see the range of probable outcomes. You can use these capabilities to analyze how different assumptions for factors such as price, costs, timing or market uncertainty affect your ability to succeed.
- Analysis that previously took weeks, can be done in hours
- Make decisions with a specific level of confidence that you will meet goals
- Rapid and more complete evaluation of alternatives
- Import data from any combination of economic software, spreadsheets or database
- Gather asset descriptions from from multiple sources
- Capture single economic descriptions for a project or probabilistic descriptions (multiple descriptions that can be used to reflect uncertain outcomes)
- Customize the metrics used to describe your projects (prod Mboe, opex, capex, reserve adds Mboe, DDA, Dry hole expense, etc)
- Define computed metrics and tailor the underlying calculations to your company (eg. aggregate production rate, reserves, net income, F&D, cash flow, different categorization of capital, earnings, ROCE)
- Create pro forma financial statements tailored to your company (balance sheet, cash flow, income statement)
- Create unlimited ‘attributes’ to categorize assets (such as geographic area, business unit, operated vs non-op, gas vs oil, and more)
- Break down the total portfolio results based on any attribute(s) in order to examine it from different viewpoints
- Create generic projects that can be repeated over multiple years to represent opportunity type curves
- Optimize with custom operational and financial goals used as the optimization function or constraint
- Use optimization to select assets, their optimal timing (shifting start dates within user specified parameters for each asset) and working interest based on the specified performance goals and constraints
- Utilize manual selection of assets and their timing for ‘what-if’ analysis
- Reflect your operational realities by specifying selection constraints and inter-dependencies among projects, including
- When project can be selected
- If a project is mandatory or optional
- Simple dependencies (project A must be finished before project B can be started)
- Chained dependencies reflecting timing, working interest, and selection relationships
- Probabilistic relationships (pilot must be successful before appraisal well is drilled)
- Deterministic and probabilistic description of assets within the same model
- Compute the probability of meeting or exceeding goals
- Describe the range of outcomes for any and all portfolio results (operational and financial)
esi.portfolio can help companies gain insights into their performance potential and their strategic alternatives at a corporate or business unit level.
Contact us today for your own personalized demonstration and find out how esi.portfolio, esi.manage and other 3esi-Enersight solutions can enable effective decision making in your organization.
We needed to understand what made sense in terms of driving growth in production vs. generating attractive returns. We know there is no one single answer. Now we understand the capacity and capability of our portfolio.
We use Perspectives to see the optimal way for us to run our company. We’ve incorporated this into our process at the executive level.
We heavily use the uncertainty analysis. We want to know what our portfolio can deliver with a certain level of confidence.
We optimized one of our major regions on value within the context of the entire company in 15 minutes and added $900 MM to the value of the plan…this has changed the way we look at capital allocation.
The most valuable thing we gain from the whole exercise is insight from sensitivity analysis. We change parameters and re-run; that all happens quickly; and we gain insight from how items move in space and time.