One for You Three for Me Or the Design of Optimal Production Sharing Rules Fo

Cover One for You Three for Me Or the Design of Optimal Production Sharing Rules Fo
One for You Three for Me Or the Design of Optimal Production Sharing Rules Fo
Philip Robert Osler Hampson
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Zeckhauser, eds. , Principals and Agents: The Structure of Business, Boston: Harvard Business School Press, pp. 101-125.
Table 1 Sample Project Cash Flows When 2 Wildcat Wells are Drilled and a Discovery of 50, 000 bbl/day is Made Year Cash Flow ($ millions) 1 -1. 64 2 3 4 -136. 08 5 -136. 08 6 - 25 187. 15 NPV 891. 44 Table 2 Extract from the Exploration Effort -- Discovery Size Probability Matr (6 ■ 0. 4, e" = 2500, a = 20%) No. Of Wildcat Wells Drilled Discovery Size, q, . (bbl/day) 50 239 1
..., 143 5, 467 26, 141 125. 000 597, 720 Discovery NPV, », ($ millions) :n 467 2, 233 10, 676 . 6000 . 0005 . 0086 . 0544 . 1365 . 1365 . 0544 . 0086 . 0005 . 1296 . 0011 . 0186 . 1184 . 2971 . 2971 . 1184 . 0186 . 0011 . 0168 . 0013 . 0210 . 1337 . 3356 . 3356 . 1337 . 0210 . 0013 . 0022 . 0013 . 0214 . 1357 . 3406 . 3406 . 1357 . 0214 . 0013 Exploration Cost Expected Development NPV Expected Project NPV ($ millions) ($ millions) ($ millions) 0. 8 066. 4 065. 6 3. 3 144. 5 141. 2 6. 6 163. 2 156.

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