Drilling and Development Costs Under SE 7. Near the end of 2007, King Oil Company drilled an exploratory well that found oil, but not in commercially producible quantities unless the price of oil went up from $25 per barrel to $30 per barrel. King decided to defer classification of the well for up to one year because its financial advisors felt that there was a high probability that oil prices would go up during the next year. Please comment. 8. a. Aggie Oil Company drills an exploratory well during 2006 that finds oil, but not in commercially producible quantities at current oil prices. Since proved reserves are not found, Aggie expenses the cost of the well in 2006. Early in the next year, but after Aggie's financial statements have been published, the price of oil goes up so that the reserves found by the exploratory well during 2006 become commercially producible. Should the costs of the well be reinstated? b. Assume the same situation except that the price of oil goes up early that next year before Aggie's financial statements are published. Should the costs of the well be reinstated in this case? 9. Tiger Oil Company had an exploratory well in progress at the end of 2008 . Total costs incurred by 12/31/08 were $300,000. During January of 2009 , drilling was continued and costs of $200,000 were incurred. Total depth was reached and the well was determined to be dry by the end of January. Assuming Tiger's financial statements are not published until early February, what costs, if any, should be expensed for 2008 and for 2009