Miller Oil Company has the following data in connection with Lease A:

Miller Oil Company is sole owner of the working interest.
If reserves are determined to be 20,000 barrels, is the well profitable? Would the well be profitable if reserves are 30,000 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 per bbl Estimated lifting costs per bbl. State severance tax rate. Royalty interest .. $ 40,000 200,000 150,000 22 6 5% 3/16