Ring fence provisions are often ignored or greatly simplified when determining the value of a portfolio because of the complex modeling required. After reviewing the theoretical effects that ring fencing can have on both the value and expected value of portfolios, tests were run using actual fiscal terms and ring fence provisions in nine countries to determine the significance of the ring fence effects and whether or not the effects on portfolio value could be predicted prior to the complex modeling process by examination of the fiscal terms. While significance is a judgment that must be made by each analyst, the results otherwise indicate that prediction of the significance of proper ring fencing is virtually impossible in most situations because of the complex interactions among various fiscal components. The results seem to suggest, though, that proper ring fencing in fiscal systems with no sliding scales in any of their tax or production sharing contract terms will almost always enhance the value of the portfolio.

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