Decision Economics · Module E7
Oil Price Sensitivity and Scenario Gates
Price sensitivity that decision-makers can use: break-even price as a resilience indicator, base, low and high price scenarios, price decks versus flat prices, timeline stress tests, combined volume, price and cost gates, and go/no-go trigger points.
- Level
- Intermediate
- Position
- Module 7 of 8
- Video
- About 17 minutes, narrated
- Format
- Narrated video lesson and slide reading view; with the certified option, a quiz whose pass unlocks the next module.
What the module covers
- Break-even price as a resilience indicator
- Base, low and high price scenarios
- Annual price decks versus flat prices
- Stress-testing the development timeline
- Combined volume, price and cost gates
- Setting and monitoring go/no-go triggers
Learning outcomes
After the module you should be able to:
- Deliver price sensitivity and scenario gates decision-makers expect.
- Compute and explain a break-even price
- Run price scenarios and timeline stress tests
- Set price triggers for a go/no-go decision
A short preview
A break-even price is the flat oil price at which NPV at the chosen discount rate is exactly zero. It condenses a whole cash-flow model into one number that can be compared with a price outlook, which is its strength and its weakness: it hides when the money is spent and received. Two projects with the same break-even can respond very differently to a price drop in their first three years, which is why the module pairs the break-even with a timed stress test.
Who it is for
Petrophysicists, geoscientists and reservoir engineers who need to connect technical work to investment decisions, and analysts new to upstream economics.
Prerequisites: None required; familiarity with volumetric estimates helps.
Take the module in the Learning Hub
Decision Economics: Eight economics modules from NPV framing through portfolio ranking and capstone. The lesson opens in the Learning Hub once the track is purchased; graded quizzes and the certificate come with the certified option.