# EP-Council — Step-by-Step Walkthrough A complete worked example showing how a full EP-Council session runs from invocation to final vote. --- ## Before You Start Have ready: - A clear description of the opportunity or decision you want tested - A Strategy Brief (or enough context for the council to construct one) - Approximately 30–90 minutes for a full multi-round session --- ## Step 1 — Invoke the Council Trigger the council with any of the following: ``` /ep-council [your opportunity description] ``` Or use natural language: > *"Run the EP-Council on our proposed acquisition of a 40% working interest in Block X offshore Namibia, $800M carry, 3-year farm-in."* **What happens next:** The council opens with a Phase 0 Strategy Brief lock. The council will ask you to confirm the Strategy Brief before any red-teaming begins. --- ## Step 2 — Lock the Strategy Brief The council presents 7 dimensions for your review and confirmation: | Dimension | Example | |-----------|---------| | **Target geographies** | Africa deepwater, Gulf of Mexico, Middle East | | **Asset types** | Conventional deepwater, LNG, brownfield | | **Capital envelope** | $500M–$2B per transaction | | **Return thresholds** | >15% IRR at $60/bbl base case, breakeven ≤$35/bbl | | **Portfolio philosophy** | Long-cycle weighted, diversified by basin | | **Financing posture** | No net debt above 1.5× EBITDA | | **Mandate constraints** | Board approval required above $1B | **Your action:** Confirm, amend, or redirect the Strategy Brief. Once you confirm, the brief is **locked**. No changes until all three red-team rounds are complete. > 💡 **Tip:** If you are still exploring and don't have a firm strategy, tell the council. They will help you construct one before locking. --- ## Step 3 — Phase 1 · Blue Team Assessment The Blue Team (advocate faction) presents the opportunity's best case: - Asset quality and resource characterisation - Commercial terms and competitive context - Strategic fit against the locked Strategy Brief - Key value drivers and upside scenarios **Example Blue Team output:** > *"Block X is a proven play — Galp's discovery well logged 30m net pay at 29.7° API. At the proposed $800M carry, we are acquiring access to a 600MMboe resource at ~$1.33/boe discovered cost. The carry structure eliminates balance sheet exposure through the drill campaign. This is a tier-1 frontier basin with an established operator and a 2027 FID timeline consistent with our long-cycle mandate."* --- ## Step 4 — Round 1 Red Team (3 members challenge) Three council members attack the Blue Team thesis. In Round 1, the faction is typically your most aggressive challengers for this opportunity type. **Example Round 1 — Offshore conventional (QatarEnergy, ConocoPhillips, Shell assigned):** > **QatarEnergy:** "The 600MMboe resource estimate is unrisked. Risked recoverable resource at this play maturity is typically 30–40% of that number. We are not paying $800M for 180MMboe — that is $4.44/boe discovered cost. At what risked resource estimate does this deal still work at $60/bbl?" > > **ConocoPhillips:** "The carry eliminates drilling exposure but not reservoir risk. What is the production decline rate on a Namibia-analog discovery, and what is the re-investment rate required to sustain plateau from 2030 onward? We need to model what the asset looks like in 2035, not at first oil." > > **Shell:** "We are adding a new basin with a new operator. What are we removing from the portfolio to make room? Complexity Creep trap — T4 fires unless you can name what comes out." --- ## Step 5 — Green Team Trap Screen (after Round 1) The Green Team runs the full T0–T10 trap screen. Each trap is reported as CLEAR or ACTIVE. **Example trap screen after Round 1:** | Trap | Status | Note | |------|--------|------| | T0 — Strategic Drift | **ACTIVE** | Strategy Brief specifies "established basins." Namibia is frontier. | | T1 — Strategy Whiplash | CLEAR | — | | T2 — Tier-2 Masquerade | CLEAR | — | | T3 — Integration Illusion | CLEAR | — | | T4 — Complexity Creep | **ACTIVE** | No portfolio removal named. | | T5 — Concentration Kill | CLEAR | — | | T6 — Distraction Decision | CLEAR | Brief includes Africa deepwater | | T7 — Shale Plateau Cliff | CLEAR | Conventional play | | T8 — Exploration Cost Trap | CLEAR | Carry structure in place | | T9 — Acquisition Leverage Trap | CLEAR | Carry, no debt | **Your action:** Respond to active traps before Round 2 begins. > *"On T0: amend the Strategy Brief to include frontier deepwater where a carry structure eliminates balance sheet exposure. On T4: we will exit our 20% stake in Block Y Guyana to make room."* --- ## Step 6 — Round 2 Red Team (next 3 members) Three new council members attack. Different perspectives, new angles. **Example Round 2 (BP, TotalEnergies, ExxonMobil assigned):** > **BP:** "We amended the strategy to include frontier plays with carry. That is a meaningful change. Does the board know we are now in frontier exploration? This amendment should be flagged for board awareness even if it does not require a vote." > > **TotalEnergies:** "The carry covers drilling. It does not cover development capital. If the discovery is commercial, development capex is our balance sheet risk. What is the estimated development cost per boe and what is the timeline to first cashflow?" > > **ExxonMobil (Enforcer):** "We have an active trap resolution on T0 and T4. Before we proceed: confirm the board notification protocol for the strategy amendment, and confirm which asset exits Block Y Guyana with a timeline. Without those two confirmations, this round cannot close." --- ## Step 7 — Green Team Trap Screen (after Round 2) Re-run all traps. Active traps from Round 1 that were addressed should now clear. **Example:** | Trap | Status | Note | |------|--------|------| | T0 — Strategic Drift | CLEAR | Brief amended; board notification protocol confirmed | | T4 — Complexity Creep | CLEAR | Block Y Guyana exit confirmed with Q3 timeline | --- ## Step 8 — Round 3 Red Team (final 3 members) Final attack round. Remaining council members focus on residual risks and decision quality. **Example Round 3 (Chevron, ENI, Occidental assigned):** > **Chevron:** "The 2027 FID assumption drives everything. What is the probability that FID slips to 2029? If it slips, what is the IRR impact and does the deal still clear our thresholds?" > > **ENI:** "The carry structure — is it a gross carry or net carry? Gross carry removes all cost exposure. Net carry means we still carry our proportional share of G&G and well costs. What is the actual cash exposure under the net carry scenario?" > > **Occidental:** "We are exiting Block Y Guyana to make room. What is the exit price assumption and what is the NAV drag if we sell in a soft market? The room-making exercise could cost us more than the upside we are acquiring." --- ## Step 9 — Final Green Team Synthesis and Council Vote After Round 3 and final trap screen, the Green Team synthesizes all rounds: **Green Team synthesis structure:** 1. Trap screen summary (all traps: final status) 2. Round-by-round attack summary (key unresolved questions) 3. Modified opportunity profile (what changed from the original thesis) 4. Risk-adjusted return range 5. Council vote recommendation --- ## Step 10 — The Vote All 9 council members cast a named vote: **PROCEED**, **CONDITIONAL**, or **REJECT**. **Example vote:** | Member | Vote | Condition | |--------|------|-----------| | **BP** | CONDITIONAL | Board notification on strategy amendment before signing | | **Chevron** | CONDITIONAL | FID schedule covenant in the farm-in agreement | | **TotalEnergies** | CONDITIONAL | Development capex ceiling in the JOA | | **Shell** | PROCEED | Carry structure adequate; Block Y exit committed | | **QatarEnergy** | REJECT | Risked resource insufficient for the premium paid | | **ExxonMobil** (Enforcer) | CONDITIONAL | All conditions from all members documented before sign | | **ConocoPhillips** | CONDITIONAL | Plateau decline model provided before FID | | **ENI** | PROCEED | Carry structure confirmed as gross carry | | **Occidental** | CONDITIONAL | Block Y exit price floor covenant in farm-in | **Tally:** 2 PROCEED · 6 CONDITIONAL · 1 REJECT **Verdict:** Council recommends CONDITIONAL PROCEED. Six conditions must be documented before execution. QatarEnergy dissents on risked resource valuation — dissent is noted in the record. --- ## Mid-Session Commands | Command | Effect | |---------|--------| | `/amend-brief [change]` | Formally amend the locked Strategy Brief. Resets trap T0 for re-check. | | `/enforcer [member]` | Change the Enforcer assignment mid-session | | `/pause` | Pause the council — saves current round state | | `/resume` | Resume from where the council paused | | `/trap-screen` | Run the trap screen on demand, outside the standard round cadence | | `/vote` | Force a vote at any point | | `/walkthrough` | Show this guide | --- ## What Makes a Good EP-Council Session **Do:** - Lock a tight, specific Strategy Brief before red-teaming begins - Respond to trap screens directly — the council cannot proceed past an active trap without your acknowledgment - Name the specific conditions for CONDITIONAL votes — vague conditions do not protect you - Push back on council members — the council is adversarial by design; your defense strengthens the analysis **Do not:** - Change the Strategy Brief mid-session without a formal `/amend-brief` command (T0 fires automatically) - Accept a CONDITIONAL vote without documenting every condition - Skip the trap screen output — traps protect you from the errors that have destroyed real companies - Run the council on an opportunity that is not in the Strategy Brief without first amending the brief --- *See also: [Trap Screen →](EP-Council-Trap-Screen) | [Council Members →](EP-Council-Council-Members) | [EP-Council main page →](EP-Council)* Go back to the [Main README](../README.md).