Possible Outcome

Probability
Exploration Cost
Development Cost
Lifting Cost
Royalty
Price
Discount rate

Dry hole
0.25
1,200,000
7.5 $/b
7 $/b
12.50%
40
0.105

120
0.4

130
0.25

190
0.1

NPV
-$224,261 Note: Please don't discount year 0's cash flow per the instruction.
Reserve (000 b)
120
Total Development Cost
900000
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6000
6000
240000
30000
210000
2
12000
18000
480000
60000
420000
3
12000
30000
480000
60000
420000
4
10858
40858
434322
54290
380032
5
9825
50683
392991
49124
343867
6
8890
59573
355593
44449
311144
7
8044
67616
321754
40219
281534
8
7278
74895
291135
36392
254743
9
6586
81481
263430
32929
230501
10
5959
87440
238361
29795
208566
11
5392
92832
215678
26960
188718
12
4879
97710
195153
24394
170759
13
4415
102125
176582
22073
154509
14
3994
106119
159778
19972
139806
15
3614
109734
144573
18072
126502
16
3270
113004
130815
16352
114463
17
2959
115963
118367
14796
103571
18
2678
118641
107102
13388
93715
19
1359
120000
54367
6796
47571

NPV
-$142,949
Reserve (000 b)
130
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6500
6500
260000
32500
227500
2
13000
19500
520000
65000
455000
3
13000
32500
520000
65000
455000
4
11763
44263
470515
58814
411701
5
10643
54906
425740
53217
372522
6
9631
64537
385225
48153
337072
7
8714
73251
348566
43571
304996
8
7885
81136
315396
39424
275971
9
7135
88271
285382
35673
249709
10
6456
94726
258224
32278
225946
11
5841
100568
233651
29206
204445
12
5285
105853
211416
26427
184989
13
4782
110635
191297
23912
167385

14
15
16
17
18
19

4327
3916
3543
3206
2901
1472

114963
118878
122421
125627
128528
130000

173093
156621
141717
128230
116028
58897

21637
19578
17715
16029
14503
7362

151456
137043
124002
112202
101524
51535

NPV
$344,920
Reserve (000 b)
190
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
9500
9500
380000
47500
332500
2
19000
28500
760000
95000
665000
3
19000
47500
760000
95000
665000
4
17192
64692
687676
85960
601717
5
15556
80248
622235
77779
544456
6
14076
94323
563022
70378
492644
7
12736
107059
509443
63680
445763
8
11524
118584
460963
57620
403343
9
10427
129011
417097
52137
364960
10
9435
138446
377405
47176
330229
11
8537
146983
341490
42686
298804
12
7725
154708
308993
38624
270369
13
6990
161698
279588
34949
244640
14
6325
168022
252982
31623
221359
15
5723
173745
228908
28613
200294
16
5178
178923
207124
25891
181234
17
4685
183609
187414
23427
163987
18
4239
187848
169579
21197
148382
19
2152
190000
86080
10760
75320

EMV:

-390,950

ow per the instruction.

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
450,000 42,000
-282000
450,000 84,000
-114000
84,000
336000
76,006
304025
68,773
275094
62,229
248915
56,307
225228
50,949
203794
46,100
184401
41,713
166853
37,744
150975
34,152
136607
30,902
123607
27,961
111845
25,300
101201
22,893
91571
20,714
82857
18,743
74972
9,514
38057

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
487,500 45,500
-305500
487,500 91,000
-123500
91,000
364000
82,340
329361
74,504
298018
67,414
269658
60,999
243996
55,194
220777
49,942
199767
45,189
180757
40,889
163556
36,998
147991
33,477
133908

30,291
27,409
24,800
22,440
20,305
10,307

121165
109635
99202
89761
81219
41228

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
712,500 66,500
-446500
712,500 - 133,000
-180500
- 133,000
532000
- 120,343
481374
- 108,891
435565
98,529
394115
89,153
356610
80,669
322674
72,992
291968
66,046
264183
59,761
239043
54,074
216295
48,928
195712
44,272
177087
40,059
160235
36,247
144987
32,797
131190
29,676
118705
15,064
60256

Possible Outcome
Probability
Exploration Cost
Development Cost
Lifting Cost
Royalty
Price
Discount rate

Dry hole
0.25
1,200,000
7.5 $/b
7 $/b
12.50%
60
0.105

120
0.4

130
0.25

190
0.1

NPV
$870,440 Note: Please don't discount year 0's cash flow per the instruction.
Reserve (000 b)
120
Total Development Cost
900000
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6000
6000
360000
45000
315000
2
12000
18000
720000
90000
630000
3
12000
30000
720000
90000
630000
4
10858
40858
651483
81435
570048
5
9825
50683
589486
73686
515800
6
8890
59573
533389
66674
466715
7
8044
67616
482630
60329
422302
8
7278
74895
436702
54588
382114
9
6586
81481
395144
49393
345751
10
5959
87440
357541
44693
312849
11
5392
92832
323517
40440
283077
12
4879
97710
292730
36591
256139
13
4415
102125
264873
33109
231764
14
3994
106119
239667
29958
209709
15
3614
109734
216860
27107
189752
16
3270
113004
196223
24528
171695
17
2959
115963
177550
22194
155356
18
2678
118641
160654
20082
140572
19
1359
120000
81550
10194
71356

NPV
$1,042,977
Reserve (000 b)
130
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6500
6500
390000
48750
341250
2
13000
19500
780000
97500
682500
3
13000
32500
780000
97500
682500
4
11763
44263
705773
88222
617552
5
10643
54906
638610
79826
558784
6
9631
64537
577838
72230
505608
7
8714
73251
522850
65356
457493
8
7885
81136
473094
59137
413957
9
7135
88271
428073
53509
374564

10
11
12
13
14
15
16
17
18
19

6456
5841
5285
4782
4327
3916
3543
3206
2901
1472

94726
100568
105853
110635
114963
118878
122421
125627
128528
130000

387337
350477
317124
286946
259639
234931
212575
192346
174042
88346

48417
43810
39641
35868
32455
29366
26572
24043
21755
11043

338919
306667
277484
251078
227185
205565
186003
168302
152286
77302

NPV
$2,078,197
Reserve (000 b)
190
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
9500
9500
570000
71250
498750
2
19000
28500
1140000
142500
997500
3
19000
47500
1140000
142500
997500
4
17192
64692
1031515
128939
902575
5
15556
80248
933353
116669
816684
6
14076
94323
844533
105567
738966
7
12736
107059
764165
95521
668644
8
11524
118584
691445
86431
605014
9
10427
129011
625645
78206
547440
10
9435
138446
566107
70763
495344
11
8537
146983
512235
64029
448206
12
7725
154708
463489
57936
405553
13
6990
161698
419383
52423
366960
14
6325
168022
379473
47434
332039
15
5723
173745
343361
42920
300441
16
5178
178923
310686
38836
271850
17
4685
183609
281121
35140
245980
18
4239
187848
254368
31796
222572
19
2152
190000
129121
16140
112981

EMV:

516,740

he instruction.

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
450,000 42,000
-177000
450,000 84,000
96000
84,000
546000
76,006
494041
68,773
447027
62,229
404487
56,307
365995
50,949
331166
46,100
299651
41,713
271136
37,744
245334
34,152
221987
30,902
200862
27,961
181748
25,300
164452
22,893
148802
20,714
134642
18,743
121829
9,514
61842

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
487,500 45,500
-191750
487,500 91,000
104000
91,000
591500
82,340
535211
74,504
484279
67,414
438194
60,999
396494
55,194
358763
49,942
324622

45,189
40,889
36,998
33,477
30,291
27,409
24,800
22,440
20,305
10,307

293730
265778
240486
217601
196893
178156
161203
145862
131981
66995

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
712,500 66,500
-280250
712,500 - 133,000
152000
- 133,000
864500
- 120,343
782232
- 108,891
707793
98,529
640437
89,153
579492
80,669
524346
72,992
474448
66,046
429298
59,761
388445
54,074
351479
48,928
318032
44,272
287767
40,059
260382
36,247
235604
32,797
213183
29,676
192896
15,064
97916

Possible Outcome
Probability
Exploration Cost
Development Cost
Lifting Cost
Royalty
Price
Discount rate

Dry hole
0.25
1,200,000
7.5 $/b
7 $/b
12.50%
90
0.105

120
0.4

130
0.25

190
0.1

NPV
$2,512,491 Note: Please don't discount year 0's cash flow per the instruction.
Reserve (000 b)
120
Total Development Cost
900000
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6000
6000
540000
67500
472500
2
12000
18000
1080000
135000
945000
3
12000
30000
1080000
135000
945000
4
10858
40858
977224
122153
855071
5
9825
50683
884229
110529
773701
6
8890
59573
800084
100010
700073
7
8044
67616
723946
90493
633452
8
7278
74895
655053
81882
573171
9
6586
81481
592717
74090
518627
10
5959
87440
536312
67039
469273
11
5392
92832
485275
60659
424616
12
4879
97710
439095
54887
384208
13
4415
102125
397310
49664
347646
14
3994
106119
359501
44938
314563
15
3614
109734
325290
40661
284629
16
3270
113004
294334
36792
257543
17
2959
115963
266325
33291
233034
18
2678
118641
240981
30123
210858
19
1359
120000
122325
15291
107034

NPV
$2,821,866
Reserve (000 b)
130
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
6500
6500
585000
73125
511875
2
13000
19500
1170000
146250
1023750
3
13000
32500
1170000
146250
1023750
4
11763
44263
1058660
132332
926327
5
10643
54906
957915
119739
838176
6
9631
64537
866757
108345
758413
7
8714
73251
784274
98034
686240
8
7885
81136
709641
88705
620936
9
7135
88271
642110
80264
561846

10
11
12
13
14
15
16
17
18
19

6456
5841
5285
4782
4327
3916
3543
3206
2901
1472

94726
100568
105853
110635
114963
118878
122421
125627
128528
130000

581005
525715
475687
430419
389459
352397
318862
288518
261062
132519

72626
65714
59461
53802
48682
44050
39858
36065
32633
16565

508379
460001
416226
376617
340777
308348
279004
252454
228430
115954

NPV
$4,678,111
Reserve (000 b)
190
Total Development Cost
0
Year
Output (bbl)
Cumulative Output Sales Revenue Royalty
Net Revenue
0
0
0
0
0
0
1
9500
9500
855000
106875
748125
2
19000
28500
1710000
213750
1496250
3
19000
47500
1710000
213750
1496250
4
17192
64692
1547272
193409
1353863
5
15556
80248
1400030
175004
1225026
6
14076
94323
1266799
158350
1108449
7
12736
107059
1146247
143281
1002966
8
11524
118584
1037167
129646
907521
9
10427
129011
938468
117308
821159
10
9435
138446
849161
106145
743016
11
8537
146983
768353
96044
672308
12
7725
154708
695234
86904
608330
13
6990
161698
629074
78634
550440
14
6325
168022
569210
71151
498058
15
5723
173745
515042
64380
450662
16
5178
178923
466029
58254
407776
17
4685
183609
421681
52710
368971
18
4239
187848
381553
47694
333859
19
2152
190000
193681
24210
169471

EMV:

1,878,274

he instruction.

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
450,000 42,000
-19500
450,000 84,000
411000
84,000
861000
76,006
779065
68,773
704927
62,229
637844
56,307
577146
50,949
522223
46,100
472527
41,713
427560
37,744
386872
34,152
350056
30,902
316744
27,961
286602
25,300
259328
22,893
234650
20,714
212320
18,743
192115
9,514
97520

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
487,500 45,500
-21125
487,500 91,000
445250
91,000
932750
82,340
843987
74,504
763671
67,414
690998
60,999
625241
55,194
565741
49,942
511904

45,189
40,889
36,998
33,477
30,291
27,409
24,800
22,440
20,305
10,307

463190
419112
379228
343140
310486
280939
254204
230013
208125
105647

Capital Cost
Operating Cost
Cash Flow
1,200,000
-1200000
712,500 66,500
-30875
712,500 - 133,000
650750
- 133,000
1363250
- 120,343
1233520
- 108,891
1116135
98,529
1009920
89,153
913814
80,669
826853
72,992
748167
66,046
676970
59,761
612548
54,074
554256
48,928
501512
44,272
453787
40,059
410603
36,247
371529
32,797
336173
29,676
304182
15,064
154407