Question 1 - Space surrounding a cylindrical object within a cylinder. Annulus True False Question 2 Which statement is incorrect? Full cost generally, results in a greater deferral of expenses during exploration and development and higher subsequent depletion charges. Full cost, generally, results in a greater income taxes during the first years of exploration activities Successful efforts, generally, results in a lower income taxes during the first years of exploration activities Successful efforts, generally, results in a greater deferral of expenses during exploration and development and higher subsequent depletion charges. Question 3 Royalty payment is: cash paid to the production interest the cash or kind paid to the owner of mineral rights the cash paid to the overriding interest the cash paid to the owner of surface rights