EXERCISE 14 Find Russian equivalents for the given English ones.

EXERCISE 15 Make up your own topic “Health, safety, environment” and be ready to retell it and discuss with your group mates.

CHAPTER V

INTERNATIONAL OIL AND GAS RESERVE AUDIT. RISK ANALYSIS OFEXPLORATION OPERATIONS . FAIR MARKET VALUE OF OIL AND GAS OBJECTS.

EXERCISE 1 Read and translate the first text, using the words after the text.

TEXT 1

The estimation of Fair Market Value (FMV) begins with the collection and review of available data. The evaluators are concerned with the type, quantity, and quality of data available because these characteristics determine the valuation approach employed and provide a basis for establishing confidence in the value obtained through the evaluation process. After the data have been collected and examined, a method to estimate FMV must be selected. There are two commonly accepted methods for FMV estimation: the comparable sales approach and the income approach.

The comparable sales approach is a valuation procedure in which the prices paid in prior transactions of similar oil and gas rights or properties are used to value the rights or property to be disposed of through leasing, exchange, or other means. This procedure generally is preferred to income procedures, if prior sales data are available, since it is thought that prices paid in prior transactions of similar oil and gas properties provide the best indication of value. However, in developed oil and gas areas, where tracts tend to be unique and information good, the income approach described below is often used instead. In comparable sales, similar oil and gas rights or properties are those of similar geologic, engineering, and oil or gas marketing prospects. These characteristics are usually heavily dependent on time and geographic proximity.

The income approach is the alternative approach to the comparable sales approach, and it involves the estimation of annual net income from the expected annual costs and revenues associated with the development of the oil and gas rights or property under realistic conditions. Annual net cash income from the difference between expected annual revenues and costs are discounted to their present value. Thus, the rights or property`s net income potential, discounted to the present, provides an estimate of current tract sale value if similar tract sales data are not available.

The words to be memorized:

1. Fair market value – справедливая рыночная стоимость

2. net pay – эффективная нефтенасыщенная толщина

3. cash flow – поток наличных средств

4. development risk analysis – анализ рисков разработки нефтегазовых месторождений

5. net revenue – чистый доход

6. oil and gas properties (assets) – нефтегазовые объекты

7. producing reserves – разрабатываемые запасы

8. recovery factor – коэффициент нефтеотдачи

9. reserve estimator – эксперт по оценке запасов

10. US Security and Exchange Commission, SEC – комиссия по ценным бумагам и биржам США.