About This Item
Share This Item
Recent expansion in microcomputer user memory offers the petroleum industry the opportunity to use the VisiCalc (spreadsheet) program for economic analysis of potential oil and gas production.
The program presented requires a microcomputer with a minimum main memory capacity of 128K. The program consists of four sections: (1) input data; (2) pre-tax cash flow and present net worth, both discounted and undiscounted; (3) after-tax cash flow and present net worth, both discounted and undiscounted; and (4) sensitivity analysis illustrating present net worth and return on investment before and after tax using varying discount rates.
Data is entered and calculations are displayed on an annual basis. The project's economic limit is calculated using the input data. The program contains a provision for project abandonment contingent on any negative cash flow development resulting from operating costs after the third year. Once the basic program is entered, the impact of data variations on present net worth of the project may be obtained in a matter of seconds.
An enlarged program, requiring a 256K capacity, necessitates input and display on a monthly basis, recognizes "payout," and adjusts working interest costs and net revenues accordingly.
End_of_Article - Last_Page 463------------