Sunrise Oil owns a 100% working interest in an oil and gas lease. The Royalty on the lease is 12.5%, which is owned by the Whittenburg Family Trust. Sunrise sells 100% of its interest to Beltway Oil & Gas reserving 1/8 interest but will pay none of the operating expenses. In March 2022 Beltway Oil & Gas produces 1,500 barrels (BBLS) of oil and sell 975 BBLs of oil at $88 per BBL. Beltway Oil incurs $37,000 in lease operating
Sunrise Oil owns a 100% working interest in an oil and gas lease. The Royalty on the lease is 12.5%, which is owned by the Whittenburg Family Trust. Sunrise sells 100% of its interest to Beltway Oil & Gas reserving 1/8 interest but will pay none of the operating expenses. In March 2022 Beltway Oil & Gas produces 1,500 barrels (BBLS) of oil and sell 975 BBLs of oil at $88 per BBL. Beltway Oil incurs $37,000 in lease operating
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Sunrise Oil owns a 100% working interest in an
oil and gas lease. The Royalty on the lease is
12.5%, which is owned by the Whittenburg Family
Trust. Sunrise sells 100% of its interest to Beltway
Oil & Gas reserving 1/8 interest but will pay none
of the operating expenses. In March 2022
Beltway Oil & Gas produces 1,500 barrels (BBLS)
of oil and sell 975 BBLs of oil at $88 per BBL.
Beltway Oil incurs $37,000 in lease operating
expenses.
What is the gross revenue to the working interest
owner?
What portion of the lease operating expenses
will Beltway Oil & Gas Pay?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0382fe4d-d815-47c3-bbf1-203204795026%2F1ba82d0d-3523-435d-ba0a-02e4a450cb64%2Fn8vhw2s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sunrise Oil owns a 100% working interest in an
oil and gas lease. The Royalty on the lease is
12.5%, which is owned by the Whittenburg Family
Trust. Sunrise sells 100% of its interest to Beltway
Oil & Gas reserving 1/8 interest but will pay none
of the operating expenses. In March 2022
Beltway Oil & Gas produces 1,500 barrels (BBLS)
of oil and sell 975 BBLs of oil at $88 per BBL.
Beltway Oil incurs $37,000 in lease operating
expenses.
What is the gross revenue to the working interest
owner?
What portion of the lease operating expenses
will Beltway Oil & Gas Pay?
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