Initial Production

AAA

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.

RELATED TERMS
  1. Production Volume Variance

    The amount of fixed overhead costs that are not allocated to ...
  2. Hubbert Peak Theory

    Similar to the predictions of the Hubbert Curve, the Hubbert ...
  3. Crude Oil

    A naturally occurring, unrefined petroleum product composed of ...
  4. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
  5. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  6. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
Related Articles
  1. Home & Auto

    Getting A Grip On The Cost Of Gas

    Feeling overwhelmed by rising oil prices? We offer some tips that will save you money.
  2. Economics

    Peak Oil: What To Do When The Wells Run Dry

    Find out how to invest and protect your investments in this slippery sector.
  3. Several major tax benefits are available for oil and gas investors that are found nowhere else in the tax code.
    Investing Basics

    Oil: A Big Investment With Big Tax Breaks

    Oil and gas investments can provide unmatched deduction potential for accredited investors.
  4. Active Trading

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  5. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  6. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

    Unit investment trusts provide direct exposure to the energy sector, fueling better returns.
  7. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  8. Active Trading

    What Determines Oil Prices?

    Changes in the price of oil aren't arbitrary. Read on to find out what moves them and why.
  9. Options & Futures

    A Guide To Investing In Oil Markets

    Find out how to take advantage of this market without having to open a futures account.
  10. Economics

    What Determines Gas Prices?

    Gas prices are influenced by more than supply and demand. Find out what determines the price you pay at the pump.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center