Hubbert Peak Theory

AAA

DEFINITION of 'Hubbert Peak Theory'

Similar to the predictions of the Hubbert Curve, the Hubbert Peak Theory implies that maximum production from an oil reserve will occur towards the middle of the reserve life cycle.

The theory suggests the production rate from a region follows a bell shaped pattern. The region can be a country or just a certain oilfield.

INVESTOPEDIA EXPLAINS 'Hubbert Peak Theory'

Although the Hubbert Peak Theory has been most discussed in reference to the oil industry, the theory is also applicable to natural gas, coal, transition metals, precious metals and even water.

Prior to natural resource extraction, a firm will often estimate the expected Hubbert Curve to gain insight into future production rates.



RELATED TERMS
  1. Hubbert Curve

    A statistical theory of oil production that states that the rate ...
  2. Proven Reserves

    After an oil exploration firm conducts a seismic survey on a ...
  3. Probable Reserves

    After an oil exploration firm conducts a seismic survey of a ...
  4. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
  5. Royalty Interest

    In the oil and gas industry this refers to ownership of a portion ...
  6. Peak Oil

    A hypothetical date referring to the world's peak crude oil production, ...
Related Articles
  1. J.D. Rockefeller: From Oil Baron To ...
    Economics

    J.D. Rockefeller: From Oil Baron To ...

  2. Spoil Your Grandkids, Cut Your Tax Bill
    Taxes

    Spoil Your Grandkids, Cut Your Tax Bill

  3. Commodity Funds 101
    Mutual Funds & ETFs

    Commodity Funds 101

  4. An Introduction To Canadian Income Trusts
    Options & Futures

    An Introduction To Canadian Income Trusts

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center