WellLiberty Well 124-Hr Test (bbl)Days Produced2030Freedom Well A-13526Dyson Powell5024Total Production Sold2,900 measured at pointof deliveryAssume the data above for the following wells commingled production in Tank Battery on the Premise Lease located inFayette County, Texas. Cameron Oil Company (70% WI) and Garcia Company (30% WI) own a joint working interest inthe Dowling Field. The expected selling price was $60/bbl. The royalty interest is 1/5 and the severance tax rate is 10%.What amount of gross revenue, royalty, severance taxes, and net revenue should Cameron Oil Company recordfor each well (Liberty Well 1, Freedom Well A-1, and Dyson Powell)?Focus

Step 1: Calculate the total revenue from the oil sold. Given that the total production sold is 2,900…

Answered: Well Liberty Well 1 24-Hr Test (bbl)…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PB: Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are...

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In this assignment you will need to perform an analysis on a hypothetical discovery based on the following information: Field Size 1.4 Tcf Production/Reserve Ratio 7% of the original field size starting producing year 3 Gas Price $3.5/Mcf CapEx $1/Mcf capitalized in 5 years, straight-line depreciation Operating Cost $0.8/Mcf Royalty 10% Government Take 40% Cost recovery limit 60% of gross revenue Discount Rate 10% Income Tax Rate 33% Allow cost recovery carry forward 1. Evaluate the discovery – you need to calculate the total worth, worth to the company, government take, value in terms of entitlement interest and working interest. 2. Evaluate the producing gas reserve – total worth, worth to the company, government take, value in terms of entitlement interest and working interest.
An oil company using the successful-efforts method drilled two wells. The first, a dry hole, costP50,000. The second cost P100,000 and had estimated recoverable reserves of 25,000 barrels, ofwhich 10,000 were sold this year. What will be the total expense for the year related to theexploration and production from these two wells? a. P40,000 b. P60,000 c. P 90,000 d. P150,000
Texas Oil Company (TOC) paid $3,000,000 for an oil reserve estimated to hold 50,000 barrels ofoil. Oil production is expected to be 10,000 barrels in year 1, 30,000 barrels in year 2, and 10,000barrels in year 3. TOC expects to begin selling barrels from its oil inventory in year 4.Required:Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulateddepletion, and oil inventory accounts in each of the three years. What effect does this yearly depletion have on the income statement?
what is the 0.46 means? Why 15m need to times the 0.46? What is the answer means? What is the 552 means? Why it need to times the 6.9m with 8%?
The Manguino Oil Company incurred exploration costs in 2018 searching and drilling for oil as follows:Well 101 $ 50,000Well 102 60,000Well 103 80,000Wells 104–108 260,000Total $450,000It was determined that Wells 104–108 were dry holes and were abandoned. Wells 101, 102, and 103 weredetermined to have sufficient oil reserves to be commercially successful.Required:1. Prepare a summary journal entry to record the indicated costs assuming that the company uses the full-costmethod of accounting for exploration costs. All of the exploration costs were paid in cash.2. Prepare a summary journal entry to record the indicated costs assuming that the company uses the successfulefforts method of accounting for exploration costs. All of the exploration costs were paid in cash.
of equipment have an initial investment of $728,831. The net cash flows estimated for the two proposals are as follows: Net Cash Flow Net Cash Flow Year Diamond Core Drill Hydraulic Excavator 1 $233,000 $291,000 23 4569 207,000 270,000 207,000 249,000 165,000 256,000 126,000 7 8 105,000 91,000 91,000 The estimated residual value of the diamond core drill at the end of Year 4 is $290,000. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 -0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 7 45 65 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 12%. Use the present value table appearing above. Diamond Core Drill Hydraulic…
Required information. [The following information applies to the questions displayed below.) Last Chance Mine (LCM) purchased a coal deposit for $2,305,050. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.18 million, $4.5 million, and $3.3 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($11,500), $737,500, and $647,500, respectively. In years 1-3, LCM extracted 19,150 tons of coal as follows: (1) Tons of Coal (2) Banis $2,305,050 Depletion (2)/(1) Rate $127.00 Tons Extracted per Year Year 1 2,300 Year 2 11,350 Year 3 5,500 18.150 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Answer is complete but not entirely…
Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $2,088,450. It estimated it would extract 17,550 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.15 million, $4.35 million, and $3.1 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($15,400), $667,500, and $662,500, respectively. In years 1-3, LCM extracted 18,550 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal 17,550 (2) Basis $2,088,450 Depletion (2)/(1) Rate $119.00 Year 1 2,400 Tons Extracted per Year Year 2 11,450 Year 3 4,700 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Depletion Expense Year 1 Year 2 $…
Manashukh
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Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,667,600. It estimated it would extract 18,950 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.32 million, $5 million, and $4.1 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($17,500), $702,500, and $695,000, respectively. In years 1-3, LCM extracted 19,950 tons of coal as follows: (1) Tons of Coal 18,950 Depletion (2) Basis (2)+(1) Rate $1,667,600 $88.00 Year 3 Year 1 4,800 6,000 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Tons Extracted per Year Year 2 9,150 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)? Year 1 Year 2 Year 3 Percentage Depletion
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