Texas Oil Company has the following data in connection with Lease A as follows: Property Cost...
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Texas Oil Company has the following data in connection with Lease A as follows: Property Cost $ 70,000 Drilling Cost (one Well) 240,000 Estimated completion cost 400,000 Estimated Selling price/bbl 50 Estimated lifting costs/bbl 10 Severance Tax 5% Royalty Interest 15% Required: 1. Ignoring income taxes, what will Texas's estimated net cash flow to the WI owner be if the estimated recoverable reserves are 20,000 bbl? (show work for credit) 2. Should the well be completed based on the given estimated recoverable reserves? Texas Oil Company has the following data in connection with Lease A as follows: Property Cost $ 70,000 Drilling Cost (one Well) 240,000 Estimated completion cost 400,000 Estimated Selling price/bbl 50 Estimated lifting costs/bbl 10 Severance Tax 5% Royalty Interest 15% Required: 1. Ignoring income taxes, what will Texas's estimated net cash flow to the WI owner be if the estimated recoverable reserves are 20,000 bbl? (show work for credit) 2. Should the well be completed based on the given estimated recoverable reserves?
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In Extimated Selling Ricelbbl 50 E Estimated diftiy contalbld 10 Royaldy mtent soX ... View the full answer
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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