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The president of a natural-resource exploration company has to decide whether to invest in a new drilling opportunity. He already has a Lotus spreadsheet that projects the most likely scenario for the well and calculates the NPV and internal rate of return. However, six uncertainties are discussed by the president and another potential investor. He also has prepared a spreadsheet for a couple of downside scenarios - one where gas is not able to be produced after the well is drilled and a second where gas is produced but all other uncertainties are at their 1% worst possible values. This case may be followed by the (B) case (UVA-F-0804), which introduces the use of Black-Scholes to treat a capital-budgeting decision as an option. In this case, the decision is whether to drill a gas well). There is a Spanish version available ''UVA-QA-0372-LAS''.