Cottonwood Oil Company entered into a production sharing arrangement in Country X.The agreement provides that Cottonwood will have a 49% WI and the Ntional Oil Company of X Country (NOCX) will have a 51% WI.The operating agreement calls for the annual production to be shared as follows:

1.VAT of 6% of annual production.

2.Royalty of 10% to Country X.

3.Cost oil limited to 60% of annual production and recovered as follows:

(a)Operating costs (shared 51% NOCX and 49% Cottonwood)

(b)Exploration costs (all paid by Cottonwood)

(c)Development costs (shared 51% NOCX and 49% Cottonwood)

4.Profit oil is split as follows:

(a)15% to Country X

(b)51% of 85% to NOCX

(c)49% of 85% to Cottonwood

During 20X1:

Recoverable operating costs equal $3 million

Inrecovered exploration costs of Cottonwood is $60 million

Unrecovered development costs equal $120 million

Gross production for 20X1 is 2.5 million barrels

Agreed upon price is $50 per barrel

draw table that allocates the 2.5 million barrels to Country X, NOCX, and Cottonwood.