Question: Use the below inputs to Compute discounted net cash flow starting from development period. development period Initial term 5 years. production period Initial term 20

Use the below inputs to Compute discounted net cash flow starting from development period.

development period

Initial term 5 years.

production period

Initial term 20 years.

Royalty

10%

Cost Recovery

40%

Exploration costs

$72mm

Tax rate

35%

Capital costs

$508mm, assume to be incurred during the 5 years of development.

Depreciation rate

20% straight

Fixed operating costs

$20mm/year

Variable operating costs

$ 2/bbl.

Reserves

250mm barrels

discount rate

10%

Oil price

65 $/bbl.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!