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An economic model of Prudhoe Bay field based on the discounted cash-flow method uses the following assumptions: (1) 7.5 billion bbl of recoverable oil, (2) an average initial producing rate of 4,000 bbl per well per day, (3) a peak production rate of 1.6 million bbl per day, and (4) a discount factor of 15 percent. The model gives a producing cost (no exploratory or lease costs included) of $0.28/bbl. A similar economic model for the Trans-Alaskan Pipeline gives a pipeline cost of $0.45/bbl for transport from Prudhoe Bay to Valdez. Tanker costs from Valdez to Los Angeles are estimated at $0.30/bbl.

For comparative purposes, a model of Bell Creek field, Montana, was made along the same lines as the Prudhoe Bay model. Actual producing rates of Bell Creek field were used, and the expected ultimate recovery was assumed to be 150 million bbl. The model gives a cost of production at Bell Creek of $0.58/bbl.

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