Model Your Oil Well Returns: The After-Tax ROI Estimator
Here's What You Need to Know
- The IDC deduction reduces your net capital at risk from day one — see the exact dollar impact at your tax rate.
- Production follows a hyperbolic decline curve (b=1.2), the industry standard for tight oil wells.
- The 15% depletion allowance creates a permanent annual tax shield on your NRI revenue.
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How to Use the ROI Estimator
Project your personal after-tax returns across a well's production life. Adjust 9 parameters — investment size, working interest, production rates, oil price, and tax assumptions — and see real-time projections with year-by-year detail. Stress-test different oil prices, decline rates, and operating costs before committing capital.
The calculator incorporates intangible drilling cost deductions and the 15% depletion allowance to show you true after-tax economics. For a broader overview of oil and gas tax advantages, see our complete tax benefits guide. Ready to see real project numbers? Browse our current drilling projects.
Your Parameters
Well Performance
Tax Assumptions
Net Investment
$72,250
After IDC tax savings
Cumulative Cash Flow
$64,252
3-year cumulative, after-tax
Payback Period
>3yr
Months to recoup net investment
Total ROI
-11.1%
3-year on net investment
| Year | Avg. Prod. | Gross Revenue | Your NRI Share | LOE | Depletion Shield | After-Tax Cash |
|---|---|---|---|---|---|---|
| Year 1 | 129 | $3.20M | $51,212 | ($13,556) | $2,842 | $26,566 |
| Year 2 | 100 | $2.49M | $39,813 | ($10,539) | $2,210 | $20,652 |
| Year 3 | 83 | $2.05M | $32,838 | ($8,692) | $1,823 | $17,034 |
| Total | — | $7.74M | $123,863 | ($32,787) | $6,874 | $64,252 |
Illustrative purposes only. Uses a simplified hyperbolic decline model (b=1.2) and does not account for gas production, NGL revenue, TDC depreciation, state taxes, workover costs, or actual well performance. Actual results will vary materially. IDC deductibility depends on working interest structure and IRS material participation rules. Consult a qualified CPA or financial advisor. Past performance is not indicative of future results. Securities offered only to accredited investors via Disclosure Memorandum.
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