Two companies, X and Y, each have net operating income, being revenue less production costs, of $40 million before exploration expenses. During the year, each company drills 10 wells at a cost of $5,000,000 each. Company X has three successful wells and discovers 30 million barrels of oil. Company Y has only one successful well but discovers 60 million barrels.

You are required to:
Calculate the profit/(loss) for the year for Company X and Company Y using both the successful efforts and full cost methods.

Answer rating: 100% (QA)

To calculate the profitloss for Company X and Company Y we will use both the successful efforts and ... View the full answer