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