NIDO Petroleum is an oil and gas company whose business activities are focussed on the Philippines offshore Palawan acreage. The company is headquartered on Perth, Western Australia and listed on the ASX.
NIDO needed an automated, transparent and efficient forecasting and reporting tool which provided a robust method of forecasting and controlling their cash flows, taking account of the many different and complex variables within the business structure and the industry. Ashley Gilbert, NIDO Chief Financial Officer said, “We found the process of forecasting and reporting on these forecasts difficult to achieve in an efficient and timely way using spreadsheets. Our spreadsheets were very complex and interlinked, so it was very difficult for someone who did not design the spreadsheets to understand them and thus not a clear audit trail to the underlying numbers.
“In addition this environment was not flexible enough to efficiently view and compare the various sensitivities and amendments resulting from the frequent changes to the forecast from operational factors.”
The implementation approach
“Our Professional Advantage account manager had intimate knowledge of joint venture accounting and business structures we were able to work together in tailoring a unique implementation approach for our requirements.
“The consultant was also very familiar with our industry having worked in oil and gas himself. This meant we were able to get a flying start getting results we could test in days.
“What we wanted was an approach where we didn’t have to solve the whole process in one fell swoop but could achieve a substantial milestone and then start a process of continuous improvement.
“Professional Advantage’s consultants were able to tune into the areas that mattered to us most. We were able to focus on what outcomes we specifically wanted for this phase and tailor a solution to suit. As a result, we participated fully in the design. This resulted in us taking great ownership of the system. This flexibility enabled us to still retain some spreadsheets for offline modelling, then importing the results into the model.
“We now build our own reports, graphs and cash flow statements in the report writer ourselves, enabling a more tailored approach to the company’s requirements from board of directors to joint venture reporting.”
This is now an incredibly robust and secure environment. The solution from Professional Advantage enables NIDO to perform highly frequent and easily repeatable forecasts. It enables NIDO the ability to do sensitivity analysis, store the results of that version and compare the different versions of forecasts and actuals in a single cash flow report.
– Enhanced reporting and forecasting of cost centre and capital AFE budgets
– Cash flow and profit & loss reporting updated as frequently as needed
– Richly formatted cash flow reports with graphs
– Boardroom presentational reports in three months from initial install to board meeting
– Sensitivity analysis on currency rates and equity share of the AFE and human resource staffing.
– Single source of financial and key non financial data
– Non-financial production reports
– KPI reporting
– Ability to carry and retain older versions
In general terms, the implementation has enhanced NIDO’s forward visibility, enhanced reporting and has reduced risks from forecasting inaccuracies. They have improved transparency and reduced time lost from investigations, the rekeying of data and onerous rechecking the Excel model and enabled NIDO to get on with business planning instead.
“We are very happy with the current setup for the next 6 months at least. We have plans after that to bring the model online to key operational staff who can input their forecasts directly in through secure web screens.” said Gilbert. “We will also add some of our offline spreadsheet logic into the model as well to allow us greater flexibility in scenario planning for things like oil prices, human resource planning and a timesheet data modelling.”
We’ll be talking about this and other case studies at the CFO Academy Sydney event, details here.