Chapter 5: Net Cash Flow

We now have all the individual relevant cash flow components we need to derive the overall impact that the new thing a company may do would have on the company’s total cash flow. Some cash flow components are based on forecasts of how much oil will be produced and the price it’ll sell for (so, between them, the income the company will receive); some are estimates of what it will cost to explore for the oil field, and then if we find oil, appraise it, develop it, produce oil from it, and then decommission it afterwards; and some result from calculations of what the government (or governments) will earn from our exploits.