Petroleum Economics

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SPE Petroleum Engineering Certification and PE License Exam Reference Guide (6th Edition)

Society of Petroleum Engineers

DOI:

ISBN electronic:

978-1-61399-411-5

Special Collection: SPE Certification and PE Exam Materials

Publication date:

2022

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Annual Discounting

D_{f} = \frac{1}{{(1 + r)}^{t}}

Monthly Discounting

D_{f} = \frac{1}{{(1 + \frac{r}{12})}^{12 t}}

Continuous Discounting

D_{f} = \frac{1}{e^{r t}}

Weighted Average Cost of Capital

C_{a t} = C_{b t} \times (1 - T_{R})

Future Value of Lump Sum

F = P {(1 + i)}^{n}

Present Value of Lump Sum

P = \frac{F}{{(1 + i)}^{n}}

Sinking Fund

A = F [\frac{i}{{(1 + i)}^{n} - 1}]

Annuity (Loan)

A = P ⌈ \frac{i}{{(1 + i)}^{n} - 1} + 1 ⌉

Annuity Due or Lease

B = P [\frac{i}{{(1 + i)}^{n} - 1} + {(1 + i)}^{n - 1}]

Modified Sinking Fund

B = F [\frac{i}{{(1 + i)}^{n} - 1} / (1 + i)]

Nominal Interest Rates

i_{n} = i \times m

Effective Interest Rates

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Chapter 6: Petroleum Economics