Pursuant to a congressional request, GAO analyzed the proposed sale of the federal interest in the Elk Hills Naval Petroleum Reserve, focusing on: (1) the present value of net revenues from Elk Hills production; and (2) the effects on Elk Hills revenues of possible variations in crude oil prices and the Treasury discount rate.

GAO found that: (1) Elk Hills revenues would range from $1.8 billion to $8.2 billion dollars, depending on average petroleum prices and the varying discount rate; (2) high oil prices and a low discount rate would produce the highest revenues; and (3) if oil prices returned to their pre-1986 level, Elk Hills revenues could total as much as $9.1 billion, given the current discount rate of 11.5 percent.