Simple Analytics of Valuing Producing Petroleum Reserves

We modify the approach to valuing mineral reserves that is current in economic literature by considering a net present-value rule under uncertainty. Direct application of Hotelling's rule is found to be inappropriate. The modification is such that the present value is approximately half that proposed by the Hotelling Valuation Principle.

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Year of publication:	1998
Authors:	Davis, Graham A. ; Cairns, Robert D.
Published in:	The Energy Journal. - International Association for Energy Economics - IAEE, ISSN 0195-6574. - Vol. Volume19.1998, Number 4, p. 133-142
Publisher:	International Association for Energy Economics - IAEE

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Extent:	text/html
Type of publication:	Article
Classification:	F0 - International Economics. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004986986