PSC with cost carry forward

Future Years
Data Units total Past 1 2 3 4 5 6 7
Prodn Mbopd 60 50 40 30 20
Price $/bbl 20 20 20 20 20 20 20
Past exploration $MM 50
Capex $MM 200 50 150
Opex $MM 100 20 20 20 20 20

Project net cash flow

Revenue $MM 1,460 438 365 292 219 146
Past exploration $MM 50
Capex $MM 200 50 150
Opex $MM 100 20 20 20 20 20
Future BTNCF $MM 1,160 -50 -150 418 345 272 199 126

Cost Recovery & Profit Oil

Depreciate at 20% straight line from production start
Project revenue $MM
Past exploration $MM
Deprn at 20% $MM
Opex $MM
Cost to recover $MM
Cost Recovery $MM
Profit Oil ("PO") $MM
Company PO (30%) $MM

Net cash flow

Cost recovery $MM
Company PO $MM
Total revenue $MM
Past exploration $MM
Capex $MM
Opex $MM
Future NCF $MM

Petroleum Economics Course by Guy Allinson - Copyright 2009

PSC with cost carry forward - answer

Future Years
Data Units total Past 1 2 3 4 5 6 7
Prodn Mbopd 60 50 40 30 20
Price $/bbl 20 20 20 20 20 20 20
Past exploration $MM 50
Capex $MM 200 50 150
Opex $MM 100 20 20 20 20 20

Project net cash flow

Revenue $MM 1,460 438 365 292 219 146
Past exploration $MM 50
Capex $MM 200 50 150
Opex $MM 100 20 20 20 20 20
Future BTNCF $MM 1,160 -50 -150 418 345 272 199 126

Cost Recovery & Profit Oil

Depreciate at 20% straight line from production start
Project revenue $MM 1,460 438 365 292 219 146
Past exploration $MM 50
Deprn at 20% $MM 200 40 40 40 40 40
Opex $MM 100 20 20 20 20 20
Cost to recover $MM 50 50 50 50
Cost Recovery $MM 350 110 60 60 60 60
Profit Oil ("PO") $MM 328 305 232 159 86
Company PO (30%) $MM 333 98 92 70 48 26

Net cash flow

Cost recovery $MM 350 110 60 60 60 60
Company PO $MM 98 92 70 48 26
Total revenue $MM 208 152 130 108 86
Past exploration $MM 50
Capex $MM 200 50 150
Opex $MM 100 20 20 20 20 20
Future NCF $MM 383 -50 -150 188 132 110 88 66

Petroleum Economics Course by Guy Allinson - Copyright 2009