Methods for calculating the full-cycle, economic costs of new oil production are compared and tested for accuracy. The method pioneered by M. A. Adelman is generalized and shown to be accurate over a wide range of conditions.
The estimated "costs" are most accurate where reliable data on reserves are available, but useful results are still obtainable as long as the reservoir decline rates can be approximately determined. Even where data on expenditures in the given area are not published, synthetic costs can still be estimated by extrapolation as long as the drilling data are believed to be reliable.
The methodology is illustrated for the case of the PDO concessions in Oman.