Discounting is compounding in reverse.

The discount
rate has one use and one use only: to express the
time value of money.
The discount rate selected by the firm should be
consistent among all classes of ventures
The cash-flow model of a proposed exploration
venture is a quantified scenario for the exploration,
discovery, development, and producing life of an oil
or natural gas field
By adding them for the period of the cash-flow model, we derive the key
value of the cash-flow analysis: the cumulative net present value (=
NPV), which is the sum of the discounted annual net cash flows for the
project, using the appropriate annual present-value factor for years
hence and the selected discount rate.
Discount Rate 10% Year End Discounting
Year 1 2 3 4 5 NPV P/I IRR
Base case NCF
MM$
-10 30 30 28 22 71.03 7.81 297%
-9.09 24.79 22.54 19.12 13.66 71.027