An economic analysis technique has been developed to aid in determining optimum divestment time for oil and gas properties. This technique can be a useful planning tool in defining the operation and divestment portfolio of a maturing property base, and can be programmed within a computer spreadsheet using data extracted from only one economic forecast of continued operations.

The technique identifies the optimum time to divest by comparing at each remaining year of economic life, "the net gain that would be realized from sale" to "the net present value (NPV) of continuing operations for one more year, plus the net discounted gain from sale at the end of that year." In other words, the analysis addresses at the beginning of each remaining year, "Is it moire profitable to sell now, or operate for another year and then sell?"

Optimum divestment time can be determined graphically or from tabulated comparison values. Cumulative differences in comparison values for each year can show expected loss from divesting at times other than optimum. If property divestment is imminent, the comparison can be used to determine a minimum sales price that yields maximized economic gain compared to continued operations.

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