Oil & Gas Project Model Template
Executive Summary
Key Takeaways
- ✓ An oil and gas project model template should move from reserve and decline basis, through fiscal regime and contract structure, to decommissioning provisioning, in that order, since later sections depend on the production and revenue basis established earlier.
- ✓ The reserve and decline basis section should be reconciled directly against the current reserve engineering report before any downstream revenue or fiscal calculation is built on it.
- ✓ The fiscal regime and contract structure sections should replicate the actual contract or regulatory mechanics, not a generic effective tax rate or blended margin assumption.
- ✓ This template is the model structure; the underlying technique guidance for each section should follow the specific guides referenced throughout this pillar.
Purpose¶
This template sets out a consistent section-by-section structure for an oil and gas asset or project financial model, within Oil & Gas Financial Modelling, so the model represents each sector-specific mechanic explicitly rather than collapsing it into a generic corporate model assumption.
Template Structure¶
1. Reserve and Decline Basis. Reserve category used, and the decline curve parameters reconciled against the current reserve engineering report. See Upstream Financial Models and Proved and Probable Reserves.
2. Well or Facility-Level Build-Up. Type curves and drilling schedule, or facility-specific throughput and capacity, depending on segment. See Exploration & Production Models and the relevant segment guide.
3. Price Basis. Forward curve or price deck used, and the defined upside/downside scenarios carried alongside the base case. See Oil Price Scenario Analysis and Gas Price Scenario Analysis.
4. Fiscal Regime and Contract Waterfall. The specific royalty-tax, production sharing, or service contract mechanics, or the tariff, take-or-pay, or processing contract terms applicable to the segment. See Fiscal Regime Modelling and Production Sharing Contract Models.
5. Financing Structure. Reserve-based lending borrowing base mechanics, or project finance debt sculpting against contracted revenue, as applicable. See Reserve-Based Lending.
6. Decommissioning Provisioning. Progressive funding schedule and financial security mechanism against the applicable regulatory requirement. See Decommissioning Cost Models.
7. Sensitivity and Risk Analysis. Core variable sensitivities and, where warranted, Monte Carlo simulation of combined reserve, price, and decline uncertainty. See Oil & Gas Sensitivity Analysis and Oil & Gas Monte Carlo Risk Analysis.
Why This Structure Matters¶
Each section exists to prevent a specific failure mode addressed elsewhere in this domain: a reserve and decline basis not reconciled to the current reserve report undermines every downstream calculation, addressed in Upstream Financial Models; a fiscal or contract waterfall collapsed into a generic assumption misstates the actual value split, addressed in Fiscal Regime Modelling; and decommissioning left unprovisioned understates a mandatory end-of-life obligation, addressed in Decommissioning Cost Models.
How to Use This Template¶
Populate each section in the order presented, since later sections, financing structure, sensitivity analysis, depend on the reserve, price, and fiscal basis established earlier. Verify the completed model against the Oil & Gas Project Model Checklist before it supports a development or financing decision.
Continue Reading¶
Related Pillars¶
Related Technical Guides¶
Related Checklists¶
Related Products¶
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Frequently Asked Questions
What is the purpose of this template?
To give a modeller a consistent, operational structure for an oil and gas asset or project financial model, moving from reserve and decline basis through fiscal regime, contract structure, and decommissioning provisioning, ensuring each sector-specific mechanic is represented explicitly rather than collapsed into generic assumptions.
Why does the template establish reserve and decline basis before fiscal and contract sections?
Because the fiscal regime and contracted revenue calculations both depend on the underlying production volumes the reserve and decline basis establishes, so getting that basis right, and reconciled to the current reserve engineering report, is the necessary foundation for everything that follows.
Does this template replace the underlying technique guidance in this domain?
No. This template structures the overall model; the underlying reserve, fiscal, contract, and decommissioning guidance should follow the specific guides referenced throughout this pillar.
How often should a model built on this template be reviewed?
At minimum whenever the underlying reserve report, price deck, or contract terms change materially, and on the periodic cadence set out in the applicable financing or governance requirement, consistent with the verification practice in the Oil & Gas Project Model Checklist.
Related Articles
Oil & Gas Financial Modelling
Oil and gas financial modelling is the practice of building financial models across the four structurally distinct segments of the hydrocarbon value chain, upstream exploration and production, midstream transport and processing, downstream refining and petrochemicals, and LNG, each governed by different revenue mechanics, contract structures and risk drivers. This page is the hub for the Knowledge Centre's oil and gas financial modelling content: industry structure and segment definitions, the financial KPIs the sector is measured against, the investment lifecycle from exploration through decommissioning, and how this domain builds toward asset and project-level models, commercial and investment analysis, and governance and assurance practice as it expands.
Upstream Financial Models
Upstream financial models project revenue and debt capacity from a depleting reserve base using a production decline curve rather than a steady-state or growth volume forecast common to most other industries. This guide sets out how upstream models are structured around exploration and production economics, reserve categories, decline mechanics, fiscal terms, and the reserve-based lending structures that finance the segment, the foundational technical grounding this domain's asset-level and commercial analysis content builds on.
Production Sharing Contract Models
Building a production sharing contract (PSC) into a financial model requires a specific waterfall structure: a cost recovery ceiling limiting how much cost oil or cost gas can be claimed in a period, a carry-forward mechanism for unrecovered cost, and a profit oil or profit gas split that frequently varies with production rate or a cumulative revenue-to-cost ratio known as an R-factor. This guide sets out how to construct that waterfall as a modelling exercise, extending the conceptual definition covered in the Production Sharing Contract glossary entry.
Decommissioning Cost Models
Decommissioning cost models estimate and provision the mandatory end-of-life obligation to plug wells and remove oil and gas infrastructure, an obligation that should be funded progressively across the production life rather than treated as a single terminal-year cost. This guide sets out how decommissioning cost is estimated, the funding mechanisms, sinking funds, parent company guarantees, and letters of credit, regulators typically require, and why timing and discounting of the liability matter to how it is represented in a financial model.
Oil & Gas Project Model Checklist
This checklist covers the verification checks specific to an oil and gas asset or project financial model, on top of the general financial model audit baseline. It focuses on confirming that well-level or facility-level detail is correctly represented, that contract structures (take-or-pay, tariff, processing agreements) are modelled against their actual terms, and that decommissioning is properly provisioned. It is intended for energy developers, EPC contractors, project finance lenders and financial modellers reviewing an asset or project model before it supports a development or financing decision.