A SIMULATION STUDY OF THE FULL COST AND SUCCESSFUL EFFORTS METHODS OF ACCOUNTING IN THE PETROLEUM INDUSTRY.

Persistent Link:
http://hdl.handle.net/10150/185848
Title:
A SIMULATION STUDY OF THE FULL COST AND SUCCESSFUL EFFORTS METHODS OF ACCOUNTING IN THE PETROLEUM INDUSTRY.
Author:
VENT, GLENN ALLEN.
Issue Date:
1983
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
The primary purpose of this study is to develop a realistic model of an oil company which can be used to evaluate alternative systems of petroleum accounting. The model is used to simulate several accounting variables produced by the full cost and successful efforts methods of accounting. The simulated accounting variables are net operating income, net oil properties, operating expenses and return on investment. This study also evaluates the oil company models used in prior petroleum accounting research. There are currently two systems of petroleum accounting (full cost accounting and successful efforts accounting) that are generally accepted. The full cost method basically requires the capitalization of all exploration and development costs while the successful efforts method does not permit the capitalization of either geological survey costs or the costs of dry exploratory wells. A petroleum accounting model should satisfy three requirements. The model should incorporate all significant revenues and expenditures. The values of these revenues and expenditures should be realistic and the timing of the business transactions must be realistic. Earlier accounting studies employed deterministic and stochastic models which failed to satisfy one or more of the three requirements of a petroleum accounting model. Because there are many significant differences between these models and the oil companies which they claim to represent, the findings of these studies cannot be considered to be realistic. The model developed for this study represents the exploration, development and production activities of an oil company. Multinomial probability distributions are used to model exploratory drilling success. A binomial distribution is used to model development drilling success. Exponential decline curves are used to represent oil production. The model displays the type of behavior that is predicted by the economic theory of exhaustible resources and it satisfies the three modeling requirements stated previously.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Petroleum industry and trade.; Petroleum industry and trade -- Accounting.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Business Administration; Graduate College
Degree Grantor:
University of Arizona
Committee Chair:
Foster, Taylor William

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleA SIMULATION STUDY OF THE FULL COST AND SUCCESSFUL EFFORTS METHODS OF ACCOUNTING IN THE PETROLEUM INDUSTRY.en_US
dc.creatorVENT, GLENN ALLEN.en_US
dc.contributor.authorVENT, GLENN ALLEN.en_US
dc.date.issued1983en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThe primary purpose of this study is to develop a realistic model of an oil company which can be used to evaluate alternative systems of petroleum accounting. The model is used to simulate several accounting variables produced by the full cost and successful efforts methods of accounting. The simulated accounting variables are net operating income, net oil properties, operating expenses and return on investment. This study also evaluates the oil company models used in prior petroleum accounting research. There are currently two systems of petroleum accounting (full cost accounting and successful efforts accounting) that are generally accepted. The full cost method basically requires the capitalization of all exploration and development costs while the successful efforts method does not permit the capitalization of either geological survey costs or the costs of dry exploratory wells. A petroleum accounting model should satisfy three requirements. The model should incorporate all significant revenues and expenditures. The values of these revenues and expenditures should be realistic and the timing of the business transactions must be realistic. Earlier accounting studies employed deterministic and stochastic models which failed to satisfy one or more of the three requirements of a petroleum accounting model. Because there are many significant differences between these models and the oil companies which they claim to represent, the findings of these studies cannot be considered to be realistic. The model developed for this study represents the exploration, development and production activities of an oil company. Multinomial probability distributions are used to model exploratory drilling success. A binomial distribution is used to model development drilling success. Exponential decline curves are used to represent oil production. The model displays the type of behavior that is predicted by the economic theory of exhaustible resources and it satisfies the three modeling requirements stated previously.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectPetroleum industry and trade.en_US
dc.subjectPetroleum industry and trade -- Accounting.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineBusiness Administrationen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.chairFoster, Taylor Williamen_US
dc.identifier.proquest8313485en_US
dc.identifier.oclc688484819en_US
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