Sam Field, located in northern Alaska, is jointly owned by Smith Company (60%

WI) and Joyner Company (40% WI). Smith, which is the operator, estimates that gross gas production during July will be 40,000 Mcf. Smith Company makes confirmed nominations of 30,000 Mcf, and Joyner Company makes confirmed nominations of 10,000 Mcf to a pipeline company. Actual July production totals 50,000 Mcf. Assume that the appropriate price is $10.80/Mcf.

REQUIRED: Determine the number of Mcfs of actual production to be allocated to each party, along with each producer’s resulting overdeliveries and underdeliveries to the pipeline, using the following:

a. The confirmed nominations method

b. The entitlement method