Economics and Cash Flow
Ryder Scott tests and incorporates a variety of economic scenarios into models to evaluate relative effects. Modeling is especially vital in analyzing how projects pay out under various, complex production-sharing contracts and concession and service agreements. Ryder Scott constructs discounted cashflow (DCF) valuation models that allow for the input of various production/cost scenarios. We also customize DCF model layouts for alignment with internal modeling platforms.
The DCF model enables an evaluator to perform financial analyses of the project at different points in its lifecycle. Ryder Scott performs incremental analysis when evaluating two complementary cases — a base case and upside case. Our DCF models incorporate price and inflation rate assumptions, working interest, taxation items, working capital adjustments, net present values, internal rates of return, payback, HSE (health, safety and environment) impact, abandonment costs, charts and outputs to profit-and-loss statements and balance sheets. Ryder Scott also provides clients with instructions detailing the architecture of the models. The firm conducts in-depth economic evaluations using the latest proprietary and commercial software programs. Ryder Scott also receives economic models from clients and reviews them for compliance with all the terms of contract agreements.