EnCana, the giant oil company, holds huge reserves of oil and gas assets. Assume that at the end of 2014, EnCana's cost of oil and gas assets totaled approximately $18 billion, representing 2.4 billion barrels of oil and gas reserves in the ground.
1. Which amortization method does EnCana use to compute its annual amortization expense for the oil and gas removed from the ground?
2. Suppose EnCana removed 0.8 billion barrels of oil during 2014. Record EnCana's amortization expense for 2014.