Harper Oil Corporation is the operator on the Farrow Lease. The accounting procedure attached to the JOA allows Harper to recoup its overhead by the use of a combined fixed rate—well basis of $2,000/producing well and $30,000/drilling well.

REQUIRED:

a. How much total overhead would Harper bill the joint account if the Farrow Lease had five wells that produced every day the previous month?

b. What if four wells produced every day, and only one produced for 10 days?

c. What if the only operation on the lease the previous month was the drilling of a well? Drilling operations commenced on the first day of the month.
Operations were suspended for 5 days on the 21st, commenced again on the 26th, and continued through the end of the month. A month is considered to be 30 days.