Mabel Oil Company owns 100% of the working interest in a lease that has a 1/7 royalty
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Mabel Oil Company owns 100% of the working interest in a lease that has a 1/7 royalty interest. The royalty interest owner is Mr. Kyle. Needing additional funds to develop the property, Mabel sold Pitt Company 60,000 barrels of oil for a consideration of
\($800,000\). The oil is to be paid out of the first 20% of the working interest’s share of production. During the first four years of production, 140,000 barrels are produced each year. How many barrels of oil does each interest receive in each of the first four years?
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Related Book For
Fundamentals Of Oil And Gas Accounting
ISBN: 9781593701376
5th Edition
Authors: Charlotte J. Wright, Rebecca A. Gallun
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