7. Both oil and gas are produced from Inferno Company?s lease in Texas.

Additional information, 1/1/07:

Unrecovered IDC -$900,000

Proved Property costs -100,000

L&W equipment, gross 300,000

Accumulated DD&A (beginning of 2006)50,000

Estimated Proved Reserves 12/31/07

Oil200,000 bbl

Gas1,000,000 Mcf

Production during 2007

Oil10,000 bbl

Gas-300,000 Mcf

Assuming the lease is fully developed compute the amortization

1.Using a common unit of measure based on BOE.