\mbox{NPV} =  - \mbox{I}_0 + \sum_{i=1}^n \frac{\mbox{FCF}_i}{(1+r)^i}

\mbox{PI} =  \frac{1}{ \mbox{I}_0 } \cdot \sum_{i=1}^n \frac{\mbox{FCF}_i}{(1+r)^i}

COGS = m_F^↑ · C_F^↑+ m_F^↓ · C_F^↓+ q_O^↑ · C_O^↑ + q_G^↑ · C_G^↑ + q_W^↑ · C_W^↑ + q_G^↓ · C_G^↓+ q_W^↓ · C_W^↓

Sales = q₁ · Price_income

Price_income = Tax_mining · Price_market

where

FCF	Free Cash Flow for each year (with year index "" omitted)	q_O^↑	surface oil volumetric production
Sales		q_G^↑	surface gas volumetric production
COGS		q_W^↑	surface water volumetric production
		q_G^↓	surface gas volumetric injection
OPEX		q_W^↓	surface water volumetric injection
CAPEX		C_O^↑	production oil processing/transportation cost
Interest		C_G^↑	production gas processing/transportation cost
IncomeTaxRate		C_W^↑	productio nwater processing/transportation cost
Tax_mining		C_G^↓	injection gas processing/transportation cost
Price_market		C_W^↓	injection water processing/transportation cost
Price_income		m_F^↑	fluid production lift cost
q₁		m_F^↓	fluid injection lift cost
		C_F^↑	η↑ · g · H · C_E
		C_F_^↓	η↓ · g · H · C_E
		H	TVD of the hydrocarbon pay
		C_E	electricity cost per energy unit
		g	Standard gravity constant (= 9.80665 m/s²)
		η↑	fluid production efficiency (frac)
		η↓	fluid injection efficiency (frac)

The link between the above FCF algorithm and the general principals of P&L is given below:

EBIT = Sales − COGS − OPEX

Reference

q

See also