A well spudded during a year does not produce for that whole year. Charging both to period one moves cash into exactly the period a discount rate rewards most.
An annual model has one bucket per year. Capital spent in that year goes in, revenue earned in that year comes out, and the difference is discounted from the midpoint. That is fine when the two are genuinely contemporaneous. For a drilling programme they are not.
Between spud and first sales sit the drilling days, the completion, the frac crew queue and flowback. Several months, sometimes most of a year. The capital is certain and early. The production is later and declining from the moment it starts.
Collapsing that into one bucket does two separate kinds of damage. It moves revenue earlier than it happens, into the period a discount rate weights most heavily, which inflates present value. And it nets the outflow against an inflow that had not arrived yet, which erases the peak funding requirement. Those two errors are read by different people. Finance sees the first. Treasury needed the second.
The second one is the more dangerous of the two, because it is not a valuation opinion. It is a number somebody has to actually fund, and the model said it was small.
Find the spud-to-sales lag. Search the model for a parameter that represents it. In most annual models there is not one, which settles the question immediately.
Compare peak exposure against treasury. Ask the model what the largest cumulative cash outflow is before the programme turns cash positive, then ask treasury what they actually had to draw. A model reporting a small fraction of the real draw has netted inflow against outflow inside a period.
Re-run it monthly. If moving the same assumptions from annual to monthly periods changes net present value by more than a couple of percent, the annual grid was doing the work rather than the economics.
Carry spud date and first sales date as separate inputs. They are separate facts. Every well already has both recorded somewhere in operations.
Model monthly through the capital programme. You can drop to annual periods once the wells are on decline and the error stops mattering, but not during the years when capital and flush production overlap.
Report peak exposure as its own headline number. Not buried in a cash-flow tab. Net present value and peak funding requirement answer different questions for different people, and only one of them can actually stop a programme.
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