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).
BREAKING DOWN '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.