Assuming that funding is put in place, how long will it take to bring the oil field into production from now? 4-5 years? There is a very high degree of risk in predicting the oil price that far out and so $70 is probably as satisfactory as any other.
When it comes to a financial analysis then I think it is better to use a range of oil prices for a sensitivity analysis with the IRR.
FAR's response to CNE's, page-11
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