Jaimson Energy operates a lease in Hutchinson County, Texas. The lease is burdened with a 1/8 royalty interest held by the Burnett Family Trust. Prior to the first sale of oil Jaimson Energy assigns an overriding royalty interest of 6.25% of its 87.5% net revenue interest to Sunset Oil. Following the assignment, Jaimson Energy produces 1,500 barrels of oil in March 2022 and sells 975 barrels. The severance tax is 5%, lease operating expenses totaled $35,000 and price per BBL is $99. Record the sale for the Burnett Family Trust. How much of the lease operating expenses does Sunset Oil pay?
Jaimson Energy operates a lease in Hutchinson County, Texas. The lease is burdened with a 1/8 royalty interest held by the Burnett Family Trust. Prior to the first sale of oil Jaimson Energy assigns an overriding royalty interest of 6.25% of its 87.5% net revenue interest to Sunset Oil. Following the assignment, Jaimson Energy produces 1,500 barrels of oil in March 2022 and sells 975 barrels. The severance tax is 5%, lease operating expenses totaled $35,000 and price per BBL is $99. Record the sale for the Burnett Family Trust. How much of the lease operating expenses does Sunset Oil pay?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jaimson Energy operates a lease in Hutchinson County, Texas. The lease is burdened with a 1/8 royalty interest held by the Burnett Family Trust. Prior to the first sale of oil Jaimson Energy assigns an overriding royalty interest of 6.25% of its 87.5% net revenue interest to Sunset Oil. Following the assignment, Jaimson Energy produces 1,500 barrels of oil in March 2022 and sells 975 barrels. The severance tax is 5%, lease operating expenses totaled $35,000 and price per BBL is $99.
Record the sale for the Burnett Family Trust.
How much of the lease operating expenses does Sunset Oil pay?
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