ABSTRACT
This chapter introduces oil and gas projects have special terminology as well as structure, and both. It explains the particulars of oil and gas production and sets out the structure of the revenues and costs. To evaluate a project, prices for oil and gas have to be projected over the economic life of the well. It is obviously very difficult to forecast oil and gas prices. The multiplication of projected production and prices leads to projected resource revenues. If the company undertaking the project has taken over the lease from another party, they may have agreed to pay an overriding royalty to that party. The project may be undertaken by just one company or by a number of partners who each have working interest which is expressed as a percentage. The oil price changes easily, the production decline factor may be different, royalties and taxes may change, costs may turn out to be underestimated, and so on.
