Bolton Oil Ltd has just completed the successful testing of a recovery site and as a result determined that 800,000 barrels of oil should be classified as proved developed reserves. However, 130,000 barrels will be produced only after significate future development costs are incurred.

Required:

Calculate DD&A for Bolton Oils wells and equipment assuming net capitalized drilling and equipment costs of $1,200,000 and production of 40,000 barrels