DETERMINING AND CONSIDERING PETROLEUM RESERVOIR RESERVES AND PRODUCTION CHARACTERISTICS WHEN VALUING PETROLEUM PRODUCTION CAPITAL PROJECTS

摘要

Determining a True Value Index™ (TVI™) for a petroleum production capital project provides a novel indicator and metric that is designed to quickly assess the economics of undertaking the petroleum production capital project. The TVI™ can be determined according to the following equation:; TVI=NPV+(β*Reserves)where, NPV=Net present value of a project;β=Reservoir Management Factor (RMF™)=absolute value (sum of Coefficient of Reserves and Coefficient of Production) derived from multivariable correlation=to reflect the market value premium on increased reserves if the producer was public; andReserves=Barrels of proven reserves to be created by the project.