BUSINESS
Cash flow and fiscal terms on your production profile, with every term visible. Royalty and tax, production sharing and the Nigeria Petroleum Industry Act 2021 templates, with NPV, IRR, breakeven, tornado and Monte Carlo, in US dollars and naira.
WHAT IT DOES
Economics turns a production profile into cash flow. Load the profile from a decline forecast, a material-balance prediction, the integrated forecast or a paste; set prices, costs and the fiscal regime; and Converge builds the cash flow year by year, with revenue, royalty, every named tax, cost recovery, depreciation and the contractor's and government's shares in their own rows.
Value metrics follow from it: NPV at several discount rates with end-, mid- or start-of-period discounting, IRR, payback, profitability index, unit technical cost and maximum exposure. Breakeven prices are solved to zero NPV. Where the cash flow changes sign more than once, Converge reports every IRR and tells you to rely on NPV.
For Nigerian assets, the Petroleum Industry Act 2021 templates apply royalty by terrain, production and price, hydrocarbon tax, companies income tax, the cost-price ratio cap, levies and the gas flare penalty. They are screening values coded from the Act's schedules, not tax advice, and the assumptions log records every input and default.
KEY CAPABILITIES
Every line of the cash flow, year by year, in its own row.
The numbers an investment committee asks for, computed the way finance teams expect.
The common fiscal structures, configured term by term.
Screening templates coded from the Petroleum Industry Act 2021 schedules.
Nominal or real terms, dollars or naira.
Which inputs move the value, and the range they give.
WORKFLOW
Import a decline forecast, a material-balance prediction or an integrated-forecast scenario, or paste one.
Choose a price deck, then enter opex, capex and their timing.
Concession, production sharing or a Nigeria PIA 2021 template, each term editable.
NPV, IRR, payback, breakeven and the full cash-flow table, in dollars or naira.
Run the tornado and Monte Carlo, and add emissions and a carbon price.
Export the cash flow and the assumptions log with every input and default.
VALIDATION
Discounted cash flow is checked against hand calculations and an independent open-source finance library. The simplest case to check yourself: −100 then 30 a year for five years, end-of-period discounting at 10%.
| Check | Reference | Converge | Tolerance |
|---|---|---|---|
| NPV at 10% | 12.476 | 12.476 | 10⁻³ |
| IRR | 15.24% | 15.24% | 10⁻⁹ |
| Royalty and income tax, every year of a 10-year case (V25) | Independent hand calculation | Matches | 10⁻⁶ |
| NPV at 10%, mid-period discounting (V26) | Independent sum of discounted cash flows | Matches | 10⁻³ |
| Production-sharing arithmetic | Hand sheet: cost-oil cap, R-factor tier, tax, government take | Matches | 10⁻⁹ |
The Nigeria PIA 2021 templates are screening values coded from the Act's schedules. They are not tax advice and are not part of this benchmark.
INPUTS AND OUTPUTS
CONNECTED MODULES
Any forecasting module can send its profile here with one click.
FAQ
Royalty and tax concessions, production-sharing contracts with cost recovery and R-factor or tranche splits, and Nigeria PIA 2021 templates for screening.
No. As the Act provides, hydrocarbon tax applies onshore and in shallow water only: 30% on a petroleum mining lease and 15% on a petroleum prospecting licence.
No. The templates are screening values coded from the Act's schedules, useful for comparing options. Confirm final numbers with your tax advisers.
Yes. Results are in US dollars, and in naira using a year-by-year NGN/USD exchange-rate deck you set.
By a bracketing scan, then Brent's method. If the cash flow changes sign more than once, every IRR is reported and Converge advises relying on NPV; if it never changes sign, no IRR is returned.