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A Primer On Calculating Market Value

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By Lindsay Sherrer, Special To Hart Energy
June 1, 2014

In the world of oil and gas valuation, the discounted cash flow model (DCF) is king. Rarely will an oil and gas investor make an investment decision without first analyzing the output from Aries, PHDWin or another similar software program. These programs are used by petroleum engineers to forecast production, apply various price and expense assumptions, and ultimately predict future cash flows, which are then discounted back to the present at various discount rates.

In a perfect valuation world, all oil and gas transactions would be announced publicly and presented ...


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