Example in E&P with the Options Lens
{"Image DocumentName": "Example in E&P with the Options Lens", "Image ImageDescription": "In a negotiation, important mistakes can be done if we don\u00b4t consider the relevant options. Consider two marginal oilfields, with 100 million bbl, both non-developed and both with NPV = - 3 millions in the current market conditions. The oilfield A has a time to expiration for the rights of only 6 months, while for the oilfield B this time is of 3 years. Cia X offers US 1 million for the rights of each oilfield. Do you accept the offer? With the static NPV, these fields have no value and even worse, we cannot see differences between these two fields. It is intuitive that these rights have value due the uncertainty and the option to wait for better conditions. Today the NPV is negative, but there are probabilities for the NPV become positive in the future. In addition, the field B is more valuable (higher option) than the field A.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}