At first glance, OilFinancier appears to quite a simple concept. You might be thinking that I put all this together in a weekend or two.

Well, this is not true. It took about three solid months of design, testing, and writing to put OilFinancier together. I had to anticipate how participants would be engaging with the seminar and set some specific objectives to achieve certain results. Designing OilFinancier was quite a thoughtful process.

This webpage deals with the objectives I had set for OilFinancier.

There once was a wise old man who was very successful in many endeavours he had taken on in his life. A biographer went to interview him. He asked, "Why were you so successful?"

The wise man answered, "Because I made many good decisions."

The biographer furthered, "Why were you able to make such good decisions?"

"Because I had great experience," came the reply.

"So how you get this experience?" was the next query!

Without hesitation: "Because I had made many bad decisions."

OilFinancier has a pedagogical objective: the learning and internalizing of finance and negotiations skills and attitudes.

Although the above goal is indeed quite worthy, there are several other tangible and intangible learning benefits gained from an OilFinancier seminar:

• understanding the petroleum industry better
• understanding management better
• attaining a feel for money
• attaining a feel for risk
• learning patience
• learning cooperative skills
• overcoming setbacks
• strategizing
• looking into the future
• anticipating competitors
• analyzing opportunities

The seminar needs to gain and maintain the student’s interest. Without engagement, not much can be learned—even if the pedagogical goals are indeed worthy.

A successful eLearning program requires:

• reality-based scenarios,
• appropriate stimuli,
• reflection time to analyze previous actions,
• being not too easy and not too difficult,
• properly working mechanics, and
• a little entertainment and drama!

OilFinancier is not about getting a good mark on an exam to please a professor. Instead financiers are free to use whatever techniques and approaches they want. It is their share price that determines whether they know what they are doing or not. And if the seminar is quite competitive, the more astute financiers will show up on top.

In one respect, OilFinancier is actually more realistic than real life. After signing big oil deals, most petroleum professionals usually move on from these deals. If the deals have negative impacts five, 10, or 20 years down the road, the professionals are usually not around to face the consequences. In OilFinancier, the decisions a financier makes in the first part of the seminar affect the opportunities he has eight months later. Such a financier is very, very accountable.

I did not want the winner of the seminar to go the first financier who is a little lucky on his first well or two. Hence the seminar had to be big enough for all financiers to experience the law of averages.

After some trial runs—and adding a bit of a cushion, I set the size of the seminar at 400 squares and 300 OF Days (about one year of calendar time). This ensures all financiers get their fair share of gushers and dusters!

Financiers need only spend a few minutes a day with OilFinancier to maintain or enhance their position. They choose the time to deal with the daily reports, emails, and calculations. They need not leave their work station or studies to participate.

I’ve been around the petroleum industry enough to know there are a multitude of ways to evaluate petroleum properties and make deals. I have even come up different ways for myself—from simple to somewhat complex methodologies—to evaluate the same OilFinancier situation. So I’m not going to promote one financial or negotiation technique as being superior to all others. An OilFinancier seminar allows participants to use whatever techniques and rationale they want.

The OilFinancier design allows moderate success for those using a "common sense" approach to finance and negotiation. And financiers who have sharpened their financial pencils and have a capacity for putting together complicated deals will have a noticeable edge. I anticipate future participants using more complicated techniques than I ever would. But each participant engages himself in the seminar at the technical level of his choice.

As well, participants are free to experiment with different techniques to see how they work for them. For example, someone might want to try to push each deal a little bit to his advantage—thus earning a reputation as a hard-nosed bargainer. Maybe this attitude will work well for him (and for some people, it does); maybe he will realize that he really needs to adopt more of a win-win negotiating style. But OilFinancier is good place to experiment and find these kinds of things out before real money is on the table.

By accommodating many different of kinds techniques—and not insisting there is only one way to do things, OilFinancier is actually engaging for many different temperaments and styles.

One danger with a year-long seminar is that not everyone will participate fully the entire time. Thus I designed the seminar for people to move in and out and back in again. When they leave for a month two, their producing wells keep putting money in their bank account for when they return.

As well, financiers can become dealmakers if they have a little extra time. Or they can just wait for the dealmakers and joint venture leaders to approach them and evaluate their proposals.

They can be land speculators, drilling contractors, investors, or whatever combination of making money suits them. They can be very technical in their approach or just use common sense to guide them. In essence, financiers choose their own level of commitment on several different levels.

Because OilFinancier was an unproven business idea, I needed a way to test OilFinancier in the marketplace without incurring great capital cost. My experience in the software development industry suggests it would cost about $500,000 to develop an OilFinancier computer program. I needed a much cheaper way to find out if OilFinancier can be a viable business.

So I built the seminar with elaborate EXCEL spreadsheets. These spreadsheets were designed such that bookkeeping tasks are quite minimal as numbers are being moved from sheet to sheet. I am able to keep accurate records while not spending a lot of time being the seminar’s administrator. These spreadsheets keep development costs down as I fine-tune OilFinancier and prove up the market.

As I sense OilFinancier participants using more sophisticated financial techniques, I have plans to add more features to challenge them further. Expect variable drilling costs, oilfield service companies, operator synergies, and seismic results to become part of the EXCEL-based seminars.

As well, I am sure the petroleum industry is going to give me some signals for other enhanced OilFinancier features. For example, it was the OF1 participants who gave me the idea of adding joint ventures. I listened, determined it was possible with the spreadsheets, and made joint ventures an integral part of OilFinancier.

Right now, I am experimenting to find the "OilFinancier formula" that satisfies Objectives 1 to 7. I will know when I find that right formula when I attain certain business objectives: i.e. so many petroleum professionals willing to pay a certain price. When it becomes apparent that OilFinancier revenues can financially justify a fully automated computer program, I will use this successful formula to build the first automated version of OilFinancier.

When moving from the manual/spreadsheet version of OilFinancier to the automated version, I will not be adding any new features in this transition. I will stick the OilFinancier formula that has proven itself. This will keep the development costs from getting out of control as well as risking a loss of engagement with new features.

After this first automated version is complete, my plan is to create a more realistic version of OilFinancier, complete with reservoir simulators, more realistic geology, facilities and pipelines, and other features.