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Quick Start for:
Discounting Oil and Gas Income
    Basis of the Manual
    Introduction
    Discounting
    Discounted Cash Flow Appraisal
    Discount Rate Components
    Using the Three Techniques
    Market Surveys
    Developing a Discount Rate From Sales
    Weighted Average Cost of Capital
Summary
Appendix 1: Discounted Cash Flow Method (Working Interest Portion Only)
Appendix 2: Estimation of Weighted Average Cost of Capital (WACC)
Appendix 3: Standard Deviation
Appendix 4: Property Specific Risk Factors
References
References
  1. Mineral Property Economics, Volume 1: Economics Principles and Strategies, John M. Campbell & Co., Campbell Petroleum Series, 1215 Crossroads Blvd., Norman, Oklahoma 73072 (July 1978).

  2. Analysis and Management of Petroleum Investments Risk, Taxes and Time, John M. Campbell & Co., Campbell Petroleum Series, 1215 Crossroads Blvd., Norman, OK 73072 (March 1987).

  1. The Value Line Investment Survey, Part 3 Ratings & Reports, Value Line Publishing, Inc., 711 3rd Avenue, New York, NY 10017-4064. (212) 687-3965 for reprints.

  2. Standard & Poor's Bond Guide, Standard & Poor's Corporation, 25 Broadway, New York, NY 10004, (212) 208-8769 Published Monthly.

  3. S&P Stock Reports, Standard & Poor's Corporation, 25 Broadway, New York, NY 10004, (212) 208-8769.

  4. Stocks, Bonds, Bills and Inflation, Ibbotson Associates, 225 North Michigan Ave., Suite 700, Chicago, IL 60601-7676, (312) 616-1620 Fax (312) 616-0404 (1992 yearbook).

  5. The Appraisal of Real Estate, Tenth Ed., Appraisal Institute, 875 North Michigan Avenue, Chicago, Illinois 60611-1980.

  6. Analysis of Oil and Gas Property Transfers and Sales and Derivation of a Band of Investment 1984 Through 1992, March 1, 1993, Richard J. Miller & Associates, 16152 Beach Boulevard, Suite 107, Huntington Beach, CA 92647, (714) 375-2790.

  7. Financial Theory and Corporate Policy, Second Ed., Thomas E. Copeland and J. Fred Weston, University of California at Los Angeles, Addison-Wesely Publishing Company, Inc., copyright 1983.

  8. Appraisal of Minerals, General Appraisal Manual, State Property Tax Board, revised printing 03/85.

  9. S&A Quarterly Reserve Report, Strevig and Associate, Inc., 5847 San Felipe, Suite 300, Houston, Texas 77057-3008, (713) 952-0186, Fax (713) 952-9861.

  10. Annual Survey of Economic Parameters Used in Property Evaluation, Society of Petroleum Evaluation Engineers (SPEE), P.O. Box 27709, Houston, Texas 77227, (713) 651-1639, Fax (713) 951-9659.

  11. Property Appraisal and Assessment Administration, The International Association of Assessing Officers, 130 East Randolph Street, Suite 850, Chicago, Illinois, 60601, (312) 819-6125.