Sessions Petroleum hires a drilling contractor to drill a well. The contract specified that the well...

   

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Sessions Petroleum hires a drilling contractor to drill a well. The contract specified that the well was to be drilled to a depth of 10,000 feet at a cost of $400,000. The $400,000 cost includes $50,000 for surface casing. Any drilling to be completed after reaching the 10,000-foot depth is to be paid at a day rate of $3,000 per day. The 10,000-foot depth is reached on September 14, 2017, and the additional drilling to 12,000 feet is completed on October 27, 2017. Sessions incurred additional costs as shown on the attached schedule. REQUIRED: Complete the schedule showing whether the cost is IDC or L&WE. Description Amount IDC L&WE $ 1. Rig drilling-turnkey contract. 2. Rig drilling-day rate.... 3. Location and road preparation 4. Drilling water.. 5. G&G-select drillsite. 6. Electric logging.. 7. Bits ..... 8. Surface damages.. 15. Separators.. 16. Cement .. 9. Mud (after 8,000 ft.)... 10. Production casing 11. Cementing services. 12. Casing crews... 13. Tank battery 14. Flow lines and connections.. ... .. ... ... .. 8,000 7,500 22,400 1,200 13,000 6,300 40,000 35,000 11,000 5,500 11,500 5,000 7,000 48,000 17. Installing separators .... 18. Tubing... 19. Christmas tree. ... 20. Measuring equipment.... 21. Installing Christmas tree. 22. Equipment rental, drilling. *To be determined from the information given in the problem statement. .. .. 4,800 30,000 20,000 500 3,000 10,000 Sessions Petroleum hires a drilling contractor to drill a well. The contract specified that the well was to be drilled to a depth of 10,000 feet at a cost of $400,000. The $400,000 cost includes $50,000 for surface casing. Any drilling to be completed after reaching the 10,000-foot depth is to be paid at a day rate of $3,000 per day. The 10,000-foot depth is reached on September 14, 2017, and the additional drilling to 12,000 feet is completed on October 27, 2017. Sessions incurred additional costs as shown on the attached schedule. REQUIRED: Complete the schedule showing whether the cost is IDC or L&WE. Description Amount IDC L&WE $ 1. Rig drilling-turnkey contract. 2. Rig drilling-day rate.... 3. Location and road preparation 4. Drilling water.. 5. G&G-select drillsite. 6. Electric logging.. 7. Bits ..... 8. Surface damages.. 15. Separators.. 16. Cement .. 9. Mud (after 8,000 ft.)... 10. Production casing 11. Cementing services. 12. Casing crews... 13. Tank battery 14. Flow lines and connections.. ... .. ... ... .. 8,000 7,500 22,400 1,200 13,000 6,300 40,000 35,000 11,000 5,500 11,500 5,000 7,000 48,000 17. Installing separators .... 18. Tubing... 19. Christmas tree. ... 20. Measuring equipment.... 21. Installing Christmas tree. 22. Equipment rental, drilling. *To be determined from the information given in the problem statement. .. .. 4,800 30,000 20,000 500 3,000 10,000

Answer rating: 100% (QA)

1 Rig drilling turnkey contract Contract was for 400000 to drill to 10000 feet 50000 of this was spe... View the full answer