Lens Upstream Optimisation has a unique functionality that allows us to create a portfolio. The portfolio is a conceptual shell of a company that allows us to add or remove assets from it, as well as merge two or more companies together, for the purpose of valuing the combination. It makes M&A ideation exercises really easy and quick to do.
To illustrate this, we will use a hypothetical example where Eni in Vietnam acquires ExxonMobil's Ca Voi Xanh field.
Step 1.
Start with using the search bar or "Add Filter" to add a company filter. You can also add any other filters (ex. country or regional filters) before running your portfolio.
Navigate to the 'Portfolio' card on the left-hand side and click 'Create new portfolio'.
💡 Tip: Here is where you can also view all your previously saved portfolios.
Step 2.
Name your portfolio and select Save Portfolio to finish.
When your portfolio has been successfully created, you will see a green message box at the bottom right corner. You can choose to view the portfolio immediately or dismiss the message to continue working.
Step 3.
Lets add a new asset to this portfolio. Start by selecting the target asset (Ca Voi Xanh) to your filters, so we can add it to the newly created portfolio. Remember, however, that we're only adding ExxonMobil's stake in the asset so we must add the company to the filter as well.
Once you have ExxonMobil's stake in Ca Voi Xanh, click on Add assets to existing portfolio.
Step 4.
Select the existing portfolio you would like to add the assets to and Confirm the date (mm/yyyy) when the asset will start becoming part of the portfolio. By default the date will be the first day of the current month. You can adjust the month and year, but it will still fall on the first day of whichever month you choose. Once done, click Add to portfolio at the bottom.
💡 Tip: The start date will impact the asset's first year production, costs and cashflow. These data series will be pro-rated to reflect the number of months since the asset/company becomes part of the portfolio.
Step 6.
Once in the new portfolio we will see the values have now updated to reflect the addition of ExxonMobil's interests in Ca Voi Xanh to Eni's existing positions in Vietnam.
The Summary by economics/volume still shows the pre- and post-tax Remaining PV of the portfolio, including corporate effects and tax overhang (if there's any).
The Portfolio Summary data table allows us to see the breakdown of the portfolio values at the field- and regime-levels. A minor difference you may notice is that in the Portfolio mode, these summary grids treat these assets as if they belong to this hypothetical company ("Eni + Ca Voi Xanh") instead of ExxonMobil or Eni. So you can also think of this as a single company valuation.
Similarly, the Net Cash Flow chart, the Annual Production chart, the Cash Flow table, and even the downloadable tax models, will also show the data and calculation as if they're all part of one company.
All visual charts within a Company Portfolio can be switched to be colored by portfolio, asset or country level using the Settings (cogwheel icon). The below example shows the production profile colored by asset.
The Consolidated company report is a great resource when wanting to see asset level details- production, costs, cashflows and valuation metrics.
As such, you're also able to apply your custom price deck or adjust the other calculation settings to test how resilient this portfolio in the face of price volatility, cost overruns or other scenarios.
💡 Tip: Once you're done working with your portfolio, you can go back to the Lens Upstream landing page by clicking on the Exit Portfolio on the top left corner of the page.
When you do that, you'll notice that your filters have all been reset.
What's next?
The Portfolio mode has additional features to help expand your workflow. Clicking the topmost Actions button will allow you to edit ownership, rename, share, copy or delete.
