Study on the Valuation Method for Overseas Oil and Gas Extraction Based on the Modified Trinomial Tree Option Pricing Model

<table class="table-group" id="tab2"><tr><td><table class="table"><tr><td class="thead-hr" colspan="4"><hr/></td></tr><tr class="thead"><td class="align_left">Categories</td><td class="align_center">Cash flows</td><td class="align_center">Notation</td><td class="align_center">Workflow stage</td></tr><tr><td class="thead-hr" colspan="4"><hr/></td></tr><tr><td class="align_left" rowspan="5">Outflow</td><td class="align_center">Exploration investment</td><td class="align_center"><i>I</i><sub>exp</sub></td><td class="align_center">Exploration</td></tr><tr><td class="align_center">Development investment</td><td class="align_center"><i>I</i><sub>dev</sub></td><td class="align_center">Development</td></tr><tr><td class="align_center">Construction investment</td><td class="align_center"><i>I</i><sub>con</sub></td><td class="align_center">Development</td></tr><tr><td class="align_center">Operating cost</td><td class="align_center"><i>C</i><sub>opex</sub></td><td class="align_center">Sale</td></tr><tr><td class="align_center">Taxes</td><td class="align_center"><i>T</i><sub>tax</sub></td><td class="align_center">Sale</td></tr><tr><td class="align_left" colspan="4"><hr/></td></tr><tr><td class="align_left">Inflow</td><td class="align_center">Sales revenue</td><td class="align_center"><i>R</i><sub>sal</sub></td><td class="align_center">Sale</td></tr><tr class="table-tr"><td colspan="4"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

<div>Cash inflow and outflow of oil and gas assets.</div>

Mathematical Problems in Engineering

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Table 2

Table 2: Study on the Valuation Method for Overseas Oil and Gas Extraction Based on the Modified Trinomial Tree Option Pricing Model 