GROWTH OPTION MODEL FOR OIL FIELD VALUATION

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6G1SY

GROWTH OPTION MODEL FOR OIL FIELD VALUATION

Dr. Ajayi kehinde
Dr. Ajayi kehinde
Ogunlade Temitope Olu
Ogunlade Temitope Olu University of Science and Technology Ifaki, Nigeria
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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.

GROWTH OPTION MODEL FOR OIL FIELD VALUATION

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.

Dr. Ajayi kehinde
Dr. Ajayi kehinde
Ogunlade Temitope Olu
Ogunlade Temitope Olu University of Science and Technology Ifaki, Nigeria

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Ogunlade Temitope Olu. 1970. “. Unknown Journal GJCST Volume 11 (GJCST Volume 11 Issue 10): .

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GROWTH OPTION MODEL FOR OIL FIELD VALUATION

Dr. Ajayi kehinde
Dr. Ajayi kehinde
Ogunlade Temitope Olu
Ogunlade Temitope Olu University of Science and Technology Ifaki, Nigeria

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