RE: RE: RE: RE: RE: Mount Kellett is hoping agains The difference between 23 years and 50 years is of course 27 years of production and a longer term revenue stream being generated, but...
from a purely NPV perspective, using the company's own 8% discount rate (that is far too high a discount rate once production starts IMHO), the future income discounted back to current value drops off very significantly beyond 25 years such that the future revenue stream has little impact on the NPV estimate of the company today.
Basic principle is what would you, as a knowledgeable investor, pay for a future revenue stream deferred 23 years from today at a discounted rate of 8%. You can likely get a table called the 6 functions of a dollar online that will give you the mathematical calculation factor. I could did up a hard copy here at home, but the number would not make sense without understanding the basic accounting principles.
Also to remain consistent one cannot factor in intangibles, such as the potential future values of commodity pricing or inflation in determining these NPV's. Hope this is of some help!