To achieve the appropriate business objectives, Enthalpy promotes the need to take an integrated approach to every issue in project structuring and hence delivery of the outcome. In fact, Enthalpy believes no single issue can be ignored in setting project structures – although many organisations still view issues as hurdles to be overcome rather than grades to be sought.
Instead, projects and acquisitions today need to be better planned, more transparently presented, and then to be monitored and reported on according to key performance indicators.
Likewise, the demands for speed and higher returns from a project are constantly growing, and so only the best-integrated, business driven structures are able to achieve the desired project outcomes.
By properly structuring a project, Enthalpy has the opportunity to link business and external influences into a project or acquisition process.
Enthalpy defines project structuring as a multifunctional exercise that selects the best implementation strategy, sets the scope according to a defined basis, selects the best contracting strategy, and then plans and schedules all business and project aspects from mobilisation through to ramp-up.
Enthalpy has extensive experience in a wide range of project structures created by different forms of project implementation strategies, financial structures, contracting plans and technology demands.
As a result, Enthalpy has learned there is no preset, optimum structure – except that it must be the best for the stakeholders.
Similarly, flexibility is also a key to success, with project structures having to change to suit project demands from time to time. In Enthalpy’s experience, organisations that structure projects a particular way often find that, as events unfold, the structures in fact create unfavourable responses.
However, project structuring has such a fundamental impact on projects that it should never be developed after a project is approved nor after a study is completed.
Instead – with its impact on capital and operating costs, risk levels and management, schedules, commercial outcomes and organisation – project structuring should be considered at pre-feasibility study phase and optimised at feasibility study phase.
As part of its work, Enthalpy has now developed techniques for use in multidiscipline workshops to identify, evaluate and select the optimum project structures for any opportunity.
Enthalpy’s procedures and standards for feasibility studies are the result of more than 15 years’ experience.
In fact, it was Enthalpy staff who first recommended – after being involved in or managing large numbers of feasibility studies for clients – that rigorous processes and standards needed to be set for study outcomes, deliverables and processes.
The result is a body of knowledge that defines the best in class procedures and the minimum standards needed to be achieved.
While some of this knowledge exists in part within industry bodies, companies and contractors, only Enthalpy offers a fully developed and integrated feasibility study system.
A number of significant clients agree and have licensed from Enthalpy some or much of their capital investment systems. These clients include BHP Billiton, Falconbridge and Stanwell Corporation.
Enthalpy’s proformas and templates within capital investment systems give consistency and add efficiency to results, by setting a repeatable basis for study contents, order of subjects and issues checklists.
One of Enthalpy’s key recommendations for feasibility studies is that work be programmed to link with a data room. Data rooms – which can be anything from a shelf to a room in size – are used to capture all of the intellectual property developed during investigations. Since shareholders’ funds are often risked to further a study process, intellectual property should be of particular value to every organisation.
Enthalpy has established a set of guidelines and procedures to help owners and principals prepare data rooms.
Enthalpy has also developed a series of checklists for organisations reviewing external feasibility studies or conducting due diligence on structures.
A recommended phased approach to feasibility studies and key objectives is outlined below.