SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Formerly About Advanced Micro Devices
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TimF who wrote (415273)9/8/2008 3:33:54 PM
From: combjelly  Read Replies (1) of 1575844
 
"Its a discounted future value calculation."

Yes.

" The oil is worth extracting now rather than later, if the value extracted is more than the discounted future value of extracting the oil later."

And?

"If extracting it now, or extracting later changes the price at the time, that changes what you feed in to the calculations a bit, but isn't likely to change the basic picture."

Sure it can. The situation we have now is that drilling now is X-A where A is some small fraction of X and X is the cost per barrel of oil. The future value is B times X where B is greater than 1. Now over the past 10 years or so, oil has gone from somewhere over $20 per barrel to over $100. So over that period of time, B has been close to 5.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News