Core Petroleum is considering drilling one well on either the Rago lease or the Bennett lease in Texas. Core does not have sufficient funds to drill both wells and must decide which of the two wells to drill. Information relating to each of the wells follows:

REQUIRED: Using the payback method, determine which well Core should drill.

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Rago well Bennett well Drilling cost Completion cost $450,000 $325,000 500,000 525,000 Selling price per bbl 60 60 Lifting cost per bbl 24 24 State severance tax 6% 6% Royalty interest percentage 12% 12% Estimated monthly production 2,000 bbl 1,500 bbl