Question
Balance sheet data for Asteroid Oil as of 12/31/26 is as follows for Lease W: Leasehold costs $675,000 Less: Accumulated DD&A ($240,000) Net leasehold costs
Balance sheet data for Asteroid Oil as of 12/31/26 is as follows for Lease W:
Leasehold costs | $675,000 |
Less: Accumulated DD&A | ($240,000) |
Net leasehold costs | $435,000 |
Wells and related E&F—IDC | $3,300,000 |
Less: Accumulated DD&A—IDC | ($1,400,000) |
Net wells and related E&F—IDC | $1,900,000 |
Wells and related E&F—L&WE | $1,850,000 |
Less: Accumulated DD&A—L&WE | ($270,000) |
Net wells and related E&F—L&WE | $1,580,000 |
Asteroid’s activities during 2027 related to Lease W were as follows:
Exploratory dry hole drilled | $825,000 |
Development dry hole drilled | $890,000 |
Tanks, separators, etc., installed | $340,000 |
Production | 330,000 bbl |
Proved reserves, 12/31/27 | 3,300,000 bbl |
Proved developed reserves, 12/31/27 | 3,000,000 bbl |
Requirement:
Calculate the Debt to Equity Ratio for 2027.
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