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Part 2 comprises nine main topics, arranged to lead the reader logically along a chain of linked considerations of economics and risk assessment. We start with the prediction of geological reserves and chance of success and continue through the construction of a cash flow model of the anticipated producing property that considers the time value of money and petroleum taxes. Next we proceed to an assessment of various economic yardsticks used to measure the economic potential of projects, then on to a discussion of risk aversion. We conclude with the economics of property acquisitions.

Most chapters in this part of the Manual show a single author indicating primary responsibility; however, both authors Rose and Thompson contributed to each of the nine chapters. The chapters written by Rose were reviewed by E. S. Capen, Consultant, Dallas, Texas, and R. E. Megill, Consultant (Retired), Kingwood, Texas. Thompson's chapters were reviewed by J. D. Wright, Questa Engineering Corp., Golden, Colorado.

The reader is reminded that each chapter is only a general summary that will be quickly exhausted by the avid student, who should go without delay to the References Cited list at the end of Part 2.

Much of Part 2 reflects viewpoints and materials from the ongoing AAPG School “Evaluating and Managing Petroleum Risk,” which has been team taught since 1984 by E. C. Capen, R. E. Megill, and P. R. Rose. This work is also drawn from the professional association and publications of J. D. Wright and co-author R. S. Thompson.

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