Federal Oil Company enters into a concession agreement with the British government.

Federal pays the government a $12,000,000 (US) signing bonus and agrees to pay the government royalties of 10% of gross production and a 5% severance tax. Federal Oil Company bears all of the costs associated with exploration, development, and production.

During 2019, Federal Oil Company spends $9,000,000 on exploration and drilling costs. Gross revenue was $10,000,000, and production costs were $4,000,000.

The income tax laws allow deduction of all production costs, with exploration and drilling costs deductible over an eight-year period. The tax rate is 30%.

REQUIRED: Show how the gross revenue for 2019 would be shared by the parties.