GLOSSARY

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Part of Field Development Planning and Production Performance Monitoring based on NPV and EUR.


\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}

Free Cash Flow (FCF) for each year is defined as (the year index "I" is omitted):

FCF =(  Sales − COGS − OPEX − Interest)  · ( 1 − IncomeTaxRate) + CAPEX

Sales = q1 · Priceincome

Priceincome =  Taxmining · Pricemarket

COGS =  mF↑ · CF↑  + qO↑ · CO  + qG↑ · CG↑  + qW↑ · CW  + qW↓ · CW↓

with the following breakdown:

FCF = OCF + CAPEX

OCF = Net Income =  EBT  · ( 1 − IncomeTaxRate)

EBT = EBIT − Interest

EBIT = Sales − COGS − OPEX


See also

Petroleum Industry / Upstream /  Production / Field Development Plan

[ Petroleum Asset NPV ][ Petroleum Asset PI ]


Reference




q

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