A field has recently been brought into production. 14 development wells have already been

drilled but a further 7 development wells have yet to be drilled. Depreciation is based only on

those reserves that are proved and developed.

Capitalised exploration and appraisal costs $62,000,000

Capitalised development costs - facilities $706,000,000

Capitalised development costs wells $168,000,000

7 further development wells $84,000,000

Total proved reserves 326,000,000 barrels

Proved developed reserves 214,000,000 barrels

Production in period 21,000,000 barrels

Required:

Calculate DD&A charge for the accounting period using the prospective method. Assume the

total number of wells to be drilled has not changed.