Lincoln Petroleum has the following data in connection with Lease A:

REQUIRED: Lincoln Petroleum is sole owner of the working interest. If reserves are determined to be 11,000 barrels, is the well profitable? Would the well be profitable if reserves are 16,500 barrels? How many barrels of total production would it take to recover drilling and completion costs?

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Proved property cost Drilling cost.. Estimated completion cost. Estimated selling price ($/bbl). Estimated lifting cost ($/bbl). State severance tax rate Royalty interest * $ 40,000 400,000 250,000 100 23 5% 3/16th