Optimistic Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A:

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Optimistic Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A: image text in transcribed

Would the investment be profitable if proved reserves are:

a. 20,000 barrels?

b. 30,000 barrels?

c. 40,000 barrels?

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Fundamentals Of Oil And Gas Accounting

ISBN: 9781593701376

5th Edition

Authors: Charlotte J. Wright, Rebecca A. Gallun

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Question Posted: May 31, 2024 10:15 AM

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Optimistic Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A:

Question:

Acquisition costs $75,000 Drilling and completion costs. 600,000 Selling price of oil. . . 60/bbl Lifting costs... 25/bbl State severance tax rate. 5% Royalty interest. 20%

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Fundamentals Of Oil And Gas Accounting

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