GROWTH OPTION MODEL FOR OIL FIELD VALUATION

Ogunlade Temitope Olu
Ogunlade Temitope Olu
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Dr. Ajayi kehinde
Dr. Ajayi kehinde
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Ekiti State University Ekiti State University

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GROWTH OPTION MODEL FOR OIL FIELD VALUATION

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Abstract

This paper considers the use of Real Option Approach (ROA) to value an oil field project. The Geometric Brownian Motion and the classic Black-Schole’s model is used to obtain the value of the fair price (option value F). We show that ROA is an invaluable tool in decision making in situations where investment involves high risk and uncertainty.

References

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Ogunlade Temitope Olu. 1970. \u201cGROWTH OPTION MODEL FOR OIL FIELD VALUATION\u201d. Unknown Journal GJCST Volume 11 (GJCST Volume 11 Issue 10).

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  • CC-BY-ND-NC 4.0
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  • Submission ReceivedMarch 24, 2011
  • Peer Review Double Blind
    Handling Editor
  • Accepted April 19, 2011
  • Published May 2, 2011
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v1.2

Issue date
May 25, 2011

Language
en
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GROWTH OPTION MODEL FOR OIL FIELD VALUATION

Dr. Ajayi kehinde
Dr. Ajayi kehinde
Ogunlade Temitope Olu
Ogunlade Temitope Olu <p>Ekiti State University</p>
  • Submission ReceivedMarch 24, 2011
  • Peer Review Double Blind
    Handling Editor
  • Accepted April 19, 2011
  • Published May 2, 2011

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