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Operating Expense

All active oil wells in OilFinancier cost $10,000 per OF Day to operate, regardless of the province, initial flowrate, or decline rate.

The petroleum industry is always looking for business synergies to extract oil in a more cost efficient manner. The synergy in OilFinancier is to purchase wells in the same province. Operating expenses, on a per well basis, decrease with more wells in a province.

Image coming soon.

The equation to determine operating expenses is:

Where:

OE = Operating Expense in a province
n = number of wells in that province

Here's how this square root function works:

  • For a one-well province, the OC is $10,000.
  • For a two-well province, the OC is $14,142 or $7,071 per well per OF Day.
  • For a three-well province, the OC is $17,320 or $5,773 per well per OF Day.

With a lower per well operating expense, more profits are realized. Not only that, a well's life can be justifiably extended to earn even more profit.

Image coming soon.

 
© 2014 Dave Volek. All Rights Reserved.