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B, C, and D please and thanks! 5. LEX Gas Company owns a 75% WI and Fani Company owns a 25% WI in a gas
B, C, and D please and thanks!
5. LEX Gas Company owns a 75% WI and Fani Company owns a 25% WI in a gas field. There is a 1/10 RI on the property. Fani's purchaser will take the gas in January and LEX's purchaser will take the gas in February. Gas allocations will be production balanced between WI producers in March. The purchaser pays (5%) severance taxes and remits remaining payment to whichever WI they contracted with. The WI pays royalties for any sales made. Gas production is as follows: Month January February March Production 18,000 mcf 20,000 mcf 36,000 mcf a. (2 pts.) Circle one: In January, Fani is [ overdelivered ] ( underdelivered ). b. (4 pts.) Assume the sales price is $3.00 per mcf in February. What is LEX's gas sales revenue for February (iust $5. not whole journal entry)? C. (4 pts.) What quantity of gas (mcf) will LEX take and sell in March to balance? d. (4 pts.) Assume the January production of 18,000 mcf is measured at 15.025 psia but must be reported to regulators at 14.73 psia. What is the January production quantity (mcf) at 14.73 psia? 5. LEX Gas Company owns a 75% WI and Fani Company owns a 25% WI in a gas field. There is a 1/10 RI on the property. Fani's purchaser will take the gas in January and LEX's purchaser will take the gas in February. Gas allocations will be production balanced between WI producers in March. The purchaser pays (5%) severance taxes and remits remaining payment to whichever WI they contracted with. The WI pays royalties for any sales made. Gas production is as follows: Month January February March Production 18,000 mcf 20,000 mcf 36,000 mcf a. (2 pts.) Circle one: In January, Fani is [ overdelivered ] ( underdelivered ). b. (4 pts.) Assume the sales price is $3.00 per mcf in February. What is LEX's gas sales revenue for February (iust $5. not whole journal entry)? C. (4 pts.) What quantity of gas (mcf) will LEX take and sell in March to balance? d. (4 pts.) Assume the January production of 18,000 mcf is measured at 15.025 psia but must be reported to regulators at 14.73 psia. What is the January production quantity (mcf) at 14.73 psiaStep by Step Solution
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