03-01-2017 12:55 PM - last edited 03-03-2017 10:19 AM
Recently, I was paired with Austin-based Energy Consultant and Energy Complex journalist Dallas Salazar as part of the MVP Mentoring Program for Microsoft Data Journalists. The purpose of this program is to assist journalists in leveraging and using Power BI for their work as well as helping these journalists to improve their technical skills around Power BI features and functionality. In short, Mr. Salazar developed a fascinating thesis and supporting model around enterprise risk for Oil & Gas exploration and production corporations. I provided the technical muscle to help improve the model and its presentation.
The following is how Mr. Salazar describes his model and the value it provides:
“The “Double Helix” model, which is constructed and executed via Microsoft Power BI’s “SandDance” data-visual, is intended to demonstrate visually – using three dimensions across an x, y, and z-axis – an Oil & Gas exploration and production company’s [“E&P”] enterprise-risk to its highly variable environment. Further, it’s meant to do this while factoring in ancillary risk measures which help determine what return the enterprise can generate for investors, if any, at which prevailing variable inputs. The Double Helix backs out marketing programs, investor relations programs, and statistical massaging to produce a model of E&P enterprise-risk which in parallel produces a quantifiable risk measure. Effectively, the Double Helix model provides viewing parties a “DNA” of the underlying E&P in which viewing parties can begin to predictively asses risk and can prescriptively determine risk-management measures.
The Double Helix, which is a joint venture of many parties and which is the culmination of many technologies, was born out of a necessity to better manage default risk in the progressively riskier global Energy Complex. The same foundational technologies which are allowing of the Double Helix model in execution have also, through innovation and evolution, helped contribute to a global commodity pricing crisis which has caused a step-change in risk for the global Energy Complex; risk which can be quantified by historic spikes in Energy Complex bankruptcies and by historic capital destruction. Never before has the ability to predictively model risk and to prescriptively determine risk management measures been more important. Given the ability to assign a “visual-DNA” to each enterprise, using the Double Helix, viewing parties can now do this. While risk must always be managed dynamically, taking in many disciplines and many theory considerations, having a DNA with which to begin to assess predisposed conditions of variable risk is hugely powerful and, ultimately, could lead to an entirely new, entirely evolved way of protecting capital exposure.”