bbqdays,

I don't know why they chose 10%, but when calculating present values of future cashflows one needs to assume a discount rate from future to now.

It's not clear what the 10% rate used is representing but a few examples are CPI, rates of inflation, cost of borrowing, oportunity costs, etc etc (many other assumed increases that hinder cashflow as required).

Also, I'm not sure whether this is a standard rate for the oil and gas industry either. But it's merely an estimate - just keep in mind it can be manipulated like the lower the NPV Rate the higher the present value, the higher the NPV rate the lower the present value.

IMO it may be a little low when compared to our current loan rates in place without accounting for any other inflationary interference.

Hope this helps (not sure if this directly answered your question though)

Booster