Introduction     Future Value     Present Value     Net Present Value I     Net Present Value II     Discount Rate   Expected NPV

   Decision Tree     Utility     Opportunity and Sunk Costs  Evaluating Oil Rights    Free Rider    Strategy

Special Note: I have been making some technical changes to OilFinancier. The examples given in this finance section are based on the old version of OilFinancier. So if you see the examples not matching up to the rules, it is because the rules have changed a little. When I get the rules finalized, I will be rewriting this entire section. Sorry for any inconvenience or misunderstanding!

I am presenting this financial training in ten sections and I recommend that you do so in the following order because the earlier sections are prerequisites to the later sections. The sections are as follows:

• Future Value
• Present Value
• Net Present Value I
• Net Present Value II
• Discount Rate
• Expected NPV
• Decision Tree
• Utility
• Opportunity and Sunk Costs
• Evaluating Oil Rights

However, there is more than one right technique to analyze data to make financial decisions. While the techniques offered in this website can be useful—and certainly much better than by guessing—recognized experts in finance may consider these techniques as primitive, simplistic, or not quite accurate. You may already be using better techniques in your work. In my experience in the oil industry, financial techniques are a preference, with no technique being able to conclusively prove that it is superior to most other techniques.

When you become a financier in OilFinancier, you are quite free to use whatever financial techniques you want. If your techniques are indeed superior, then you should rise to the top of the seminar.

I highly recommend this financial textbook for further study: "Capital Investment & Financial Decisions" by Haim Levy and Marshall Sarnet (Prentice Hall, 1986).

Good Information

To get the best of any financial analysis, the analyst must first determine the following:

· the capital costs (the investment needed to get the project started),
· the operating costs,
· the anticipated revenues, and
· whatever else is needed to determine profit and loss.

If these numbers are not accurate, not reliable, or have unquantifiable uncertainties, any financial analysis and subsequent conclusion would not be very good.

In OilFinancier, all these financial parameters are already provided for you, and you can assume them as being exact for your seminar. Therefore you can focus entirely on the financial analysis of various projects and proposals you will encounter while participating as an oil financier.

By the way, I have another version of OilFinancier in mind that will require you to deal with more uncertainty. But this version is at least a year away.

Defend Yourself Against Shark Attacks! To separate  the good deals from the good-looking deals, you need to conduct some financial analysis. Otherwise the financial sharks in your seminar could slowly eat you piece-by-piece as they keep getting the edge on your deals.  Learn these financial techniques well―and build some spreadsheets to analyze each deal that comes your way.

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