Lecture-9(economics-IRR)

Lecture-9(economics-IRR) - Iterative Calculations Example 1...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Iterative Calculations Example 1 - Petroleum Economics Lecture - 9
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Project Cash Flows The amount of cash a company generates and uses during a period Calculated by adding non-cash charges (such as depreciation) to the net income after taxes. Cash Flow can be used as an indication of a company's financial strength. It is also sometimes referred to as the "money value" of trades in a stock during a trading day. Cash flow is crucial to companies, having ample cash on hand will ensure that creditors, employees, and others can be paid on time.
Background image of page 2
Petroleum Economics Example Oil and Water production profile given: First well drilled Second well drilled
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Example Cont’d =SUM(D16:G16) =L17*(C17-C16)*365
Background image of page 4
Example Cont’d The following additional data is given: Today's price of oil 56 $/bbl Price Escalation 10 % Operating Expenses (pipeline + gathering) 3 $/bbl Escalation 5 % Operating Expenses (oil-water separation) 0.6 $/bbl (if Water <1000 STB/d) Escalation 5 % 1.2 $/bbl (if Water >1000 STB/d)
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/27/2008 for the course PGE 310f taught by Professor Srinivasan during the Spring '08 term at University of Texas.

Page1 / 11

Lecture-9(economics-IRR) - Iterative Calculations Example 1...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online