It costs $240,000 to drill a natural gas well. Operating expenses will be 11% of the revenue from the sale of natural gas from this particular well. Iffound, natural gas from a highly productive well will amount to 290,000 cubic feet per day. The probability of locating such a productivewell, however, is about 9%.
Assume that the revenue from the sale is received at the end of each year.
a. If natural gas sells for $6 per thousand cubicfeet, what is theE(PW) of profit to theowner/operator of thiswell? The life of the well is 13 years and MARR is 12% per year.
b. Repeat Part(a) when the life of the well is seven years.
c. Performone-at-a-time sensitivity analyses for
20% changes in daily well production and selling price of natural gas. Use a 13-year life for the well.
It costs $240,000 to drill a natural gas well. Operating expenses will be 11% of the revenue from the sale of natural gas from this particular well. If found, natural gas from a highly productive well will amount to 290,000 cubic feet per day. The probability of locating such a productive well, however, is about 9%. Assume that the revenue from the sale is received at the end of each year. a. If natural gas sells for $6 per thousand cubic feet, what is the E(PW) of profit to the owner/operator of this well? The life of the well is 13 years and MARR is 12% per year. b. Repeat Part (a) when the life of the well is seven years. c. Perform one-at-a-time sensitivity analyses for + 20% changes in daily well production and selling price of natural gas. Use a 13-year life for the well. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. The E(PW) of profit to the owner/operator of the well is $ thousand. (Round to the nearest whole number.) b. When the life of the well is seven years, the E(PW) of profit to the owner/operator of the well is $ thousand. (Round to the nearest whole number.) c. Perform one-at-a-time sensitivity analyses for + 20% changes in daily well production and selling price. Complete the table for the E(PW) below. (Round to the nearest hundreds.) Daily Well Production Change Selling Price Change - 20% - 10% 0% 10% 20% -20% -10% 0% 10% 20%Discrete Compounding; i = 12% Single Payment Uniform Series Compound Compound Sinking Capital Amount Present Amount Present Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P N FIP PIF FIA PIA AIF AIP 1. 1200 0.8929 1.0000 0.8929 1.0000 1. 1200 1.2544 0.7972 2.1200 1.6901 0.4717 0.5917 1.4049 0.7118 3.3744 2.4018 0.2963 0.4163 1.5735 0.6355 4.7793 3.0373 0.2092 0.3292 1.7623 0.5674 6.3528 3.6048 0.1574 0.2774 1.9738 0.5066 8.1152 4.1114 0.1232 0.2432 2.2107 0.4523 10.0890 4.5638 0.0991 0.2191 2.4760 0.4039 12.2997 4.9676 0.0813 0.2013 2.7731 0.3606 14.7757 5.3282 0.0677 0.1877 10 3.1058 0.3220 17.5487 5.6502 0.0570 0.1770 11 3.4785 0.2875 20.6546 5.9377 0.0484 0. 1684 12 3.8960 0.2567 24.1331 6.1944 0.0414 0.1614 13 4.3635 0.2292 28.0291 6.4235 0.0357 0.1557 14 4.8871 0.2046 32.3926 6.6282 0.0309 0. 1509 15 5.4736 0.1827 37.2797 6.8109 0.0268 0.1468
