Discounted Rate of Return Reports

The Discounted Rate of Return report shows the initial investment in each well and then a year-by-year report of cash received from the well. An internal rate of return calculation is made based upon the initial investment and the amount of cash received each year. The report projects the cash to be received for those years in the future. The cash is estimated based upon the decline percentages entered for the field. The estimate is made by averaging the last three years gross income and then declining the average by the decline percentage. Expenses are averaged for the last three years with the one-time expenses being dropped out. You can also choose to estimate with the change in price of gas and oil as a consideration.

Base Projections On
Choose how you want the estimate made. Net Revenue Received projects the cash forward using the decline percentages entered for the field. Oil and Gas Price Changes projects the cash forward by declining the BBL and MCF using the decline percentages entered for the field and then multiplying the resultant BBL or MCF by the price per BBL or MCF.

Beginning and Ending Well
Choose the first and last well IDs in the range of wells to include in the payout report.

Beginning and Ending Owner
Choose the first and last owner IDs in the range of owners whose wells will be included in the report.

On the report:

Year - The year of production. If the year has an asterisk * beside it, the numbers were estimated based on the decline setup in the field information assigned to this well.
Cash Rcvd - The amount of cash received during the given year.
Cum. Cash - The cumulative amount of cash received to date for the given year.

Initial Investment - The amount invested for this interest. The investment amounts are entered using the Investment Amounts window found under Maintain Investment Files.

The "Estimated Rate of Return" (internal rate of return) is based on the net present value of all future cash flows.