There are certainly many variables influencing the final numbers, especially the number of barrels and market price. As the price and/or oil flow increases, the income can jump appreciably. The price of oil has seen a pretty steady increase since the lows experienced in 2008. Of course it exceeded $140 prior to the drop.
To the right is an example of potential net annual income based on 4 barrel per day production rate and $60 WTI price. Based on this example and assumed $270,000 lease purchase price, the return on investment would be 25% in the first year alone. Under these conditions, in about four years the initial investment could be recouped and the income stream thereafter be 100% profit for many, many years in the future.
Daily Production (barrels of oil) 4
Market Price+/- $60
Pick Up & Transportation $(2)
Adjusted Market Price $58
Adjusted Daily Gross Revenue $232
Adjusted Yearly Gross Revenue $84,680
Royalty Fee $(16,963)
Net Annual Income $67,744
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