Initial Production

Definition of 'Initial Production '


The measurement of an oil well's production at the outset. Initial production will be fairly small, but the well will eventually increase to its peak capacity; however, over time oil production will decline. Eventually the well will fail or output will be so low as to make the enterprise unprofitable. Initial production is measured in B/D (barrels of oil per day) or BOE/D (barrels of oil equivalent per day).

Investopedia explains 'Initial Production '


The first known oil well was hand-dug in China around the year 350. The first modern oil well was drilled in Asia (in modern-day Azerbaijan) by the Russian engineer F.N. Semyenov. Oil was discovered in the U.S. in 1850 in California and the first North American oil well was drilled in Ontario, Canada in 1858. The first American oil well was drilled a year later. Oil wells in Europe were developed in Poland in 1854. The world's largest oil field is in Saudi Arabia and covers more than 3,300 square miles.



comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
Trading Center