Question
Balance sheet data for Mars Petroleum as of 12/31/10 is as follows for Lease G: Leasehold costs $275,000 Less: Accumulated DD&A ($80,000) Net leasehold costs
Balance sheet data for Mars Petroleum as of 12/31/10 is as follows for Lease G:
Leasehold costs | $275,000 |
Less: Accumulated DD&A | ($80,000) |
Net leasehold costs | $195,000 |
Wells and related E&F—IDC | $1,700,000 |
Less: Accumulated DD&A—IDC | ($600,000) |
Net wells and related E&F—IDC | $1,100,000 |
Wells and related E&F—L&WE | $1,000,000 |
Less: Accumulated DD&A—L&WE | ($110,000) |
Net wells and related E&F—L&WE | $890,000 |
Mars’ activities during 2011 related to Lease G were as follows:
Exploratory dry hole drilled | $425,000 |
Development dry hole drilled | $450,000 |
Tanks, separators, etc., installed | $180,000 |
Production | 170,000 bbl |
Proved reserves, 12/31/11 | 1,700,000 bbl |
Proved developed reserves, 12/31/11 | 1,400,000 bbl |
Requirement:
Calculate the Development Costs for 2011.
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