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).

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.

RELATED TERMS
  1. Crude Oil

    Crude oil is a naturally occurring, unrefined petroleum product ...
  2. Production Volume Variance

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

    Similar to the predictions of the Hubbert Curve, the Hubbert ...
  4. Oil Reserves

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

    The name given to barrels of crude oil that do not meet certain ...
  6. Sweet Crude

    A type of oil that meets certain content requirements, including ...
Related Articles
  1. 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.
  2. 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.
  3. Economics

    Peak Oil: What To Do When The Wells Run Dry

    Find out how to invest and protect your investments in this slippery sector.
  4. Investing Basics

    Oil: A Big Investment With Big Tax Breaks

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

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  6. 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.
  7. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

    Unit investment trusts provide direct exposure to the energy sector, fueling better returns.
  8. 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.
  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.
RELATED FAQS
  1. How can I track gold prices?

    Learn how to track gold prices. Gold is a commodity traded as a physical asset and a futures contract. The one you track ... Read Answer >>
  2. Why are stocks and oil so correlated right now?

    Learn whether the stock market and oil prices will continue their highly correlated price relationship or decouple again ... Read Answer >>
  3. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Answer >>
  4. What is the difference between positive and normative economics?

    Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ... Read Answer >>
  5. Is Norway a developed country?

    Learn why Norway's GDP, anti-corrupt laws and oil exports make it a developed nation and one of the wealthier nations in ... Read Answer >>
  6. Is Qatar a developed country?

    Find out about Qatar's status as a developing nation. Read about income inequality, infrastructure and plans for the future ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center