The oil and gas industry is a very expensive industry to enter because so much money needs to be invested in an oil and gas project before the project yields even its first dollar of profit. This is an example of what the cash flow might look like over a 20 plus year period for an onshore well producing both oil and natural gas. In this plot, the well is drilled in year zero. Investments made to secure the well site occur before then while production costs and revenues for the well occur afterwards. The cash flow in each year of the plot is the sum of negative cost and positive revenues in that year. The negative cash flow in year minus one is the cost to least the total anchorage of mineral rites needed to drill the well and acquire the permits to drill. The negative cash flow in year zero is the cost to drill and complete the well. Production begins immediately afterwards and by the end of year one, the cash flow turns positive. Revenues received from selling the oil and gas produced from the well exceed the well's production costs. Note that these revenues then decline over the ensuing years. This is because the revenues are based on the well's production, which falls off as oil and gas in the vicinity of the well is drained from the reservoir. This version of the plot includes the cumulative cash flow from the well alongside its annual cash flow. The cumulative of cash flow from the well is the running sum of costs and revenues from one year to the next. Note that by the end of year zero, the cumulative cost to lease acreage and drill the well approaches $9 million dollars. This is the amount of money that needs to be invested before the well generated any revenue. The well in this example, however, is really good. By the end of year one, so much oil and gas has been sold, that all of the upfront costs, have been paid off, and there's still $3 million of gross revenue. Thus, in this particular case, pay out for the well occurs before the end of year one, which is when the well becomes profitable. Wells with lower initial production in year one, a faster decline rate, and or which produce oil and gas that fetch a lower sales price than in this example will take a longer time, possibly many years to reach payout and thus finally become profitable. In this particular example, revenues continue to exceed well costs through year 18. By year 19, however, oil and gas production have fallen so low, that sales revenues, are no longer enough to pay for the well's cost and the well is plugged, and abandoned.